How can ministries reduce the opportunity side of the fraud triangle?

Previous posts here and here discussed the opportunity to carry out a fraud.  Opportunity means the door is open for a person to do something wrong.  What can a ministry or church to manage or reduce the opportunity to commit fraud? 

 Opportunity can be drastically reduced by setting up proper internal controls.  Good procedures can create major obstacles to wrongdoing.  Separating responsibilities makes it very difficult for one person to get to the money and get it out and hide having done so.

Time is tight and we are all busy.  I know that.  Use your limited time to split out responsibilities that just do not go together.  Don’t let your bookkeeper sign checks.  Look at the bank recs.  Have appropriate program managers approve disbursements for their area.  Hit all the basics.

Pay attention when your CPA says you missed something big.  If your CPA works with lots of other NPOs, he or she gets to see lots of different settings.  Take advantage of that knowledge.

NPOs have lots of ways to control the risk of the opportunities to commit fraud.  I think this area is the biggest opportunity for ministries to break up the fraud triangle.

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