If you suspect fraud in your ministry, get help early

If you come across some things that make you think there are some shenanigans going on, your first reaction will be to look at it some more. 

While you will obviously want to look at something so you can understand it, don’t get too far into an investigation.  If you think you’re looking at actual fraud, you need help.  Someone trained in investigations.

Talking to your CPA would be a good start.  Most CPAs have some familiarity with fraud concepts. You could quickly get some feedback on your concerns.  A CPA could help you sort out whether it sounds like this is an okay situation,  just a typical bookkeeping mess, something you need to look at more, or whether you have a full-blown disaster on your hands. 

Perhaps, if it really is a fraud, your CPA can give you assistance.  A good CPA will know when to refer the fiasco to a trained investigator.

If it really is an honest-to-goodness fraud, you need to get some serious help. There are trained professionals that can assist you.

Why get professional help to conduct a fraud investigation?

People who don’t know how to conduct a proper investigation can really mess things up.  Not only can you destroy the evidence to pursue the bad guy, you could expose yourself to defamation claims.  In addition, you can tie up a lot of time that you really need to spend running your ministry.

Tracy Coenen has a great post explaining why you should get help: Got Fraud? Don’t Try a Do-It-Yourself Investigation.

A few reasons she mentions:

Company personnel sometimes inadvertently destroy or damage evidence during their investigation,

I can think of a few illustrations:

  • Merely turning on a computer can change files in the boot-up routine.  If any of those files are key to the investigation, you just lost your court case.  Pros have technology to make a copy of a hard drive without changing anything on the drive.
  • Poking around in various Word and Excel documents means you will be accused of making or changing the documents that otherwise would prove fraud.
  • You can scare off the suspected bad guy. As she explains:

There is often only one chance to interview the suspect, so it’s important to gather as much information as possible during that interview.

That initial confrontation is key. If done right, it will gain critical information and often can result in a confession.

  • Don’t forget the distraction.  A serious fraud investigation is going to take a lot of time.  What happens to your ministry programs while you are sorting through documents and bank statements?  The amount of time it would take you to sort through and organize things will be a multiple of how long it takes a trained, experienced investigator.

Ms. Coenen’s closing comment:

While it may be expensive to bring in a fraud investigation expert, that’s usually the best course of action when a company has evidence of fraud. Find a highly-experienced and qualified fraud investigator to handle the situation, and let owners and management get back to the business of doing business.

Who do you look for?  Find someone with the credential of Certified Fraud Examiner.  Call your CPA for referrals.  There are many CPA firms who have a staff person who has gone through the CFE training. Or go to the web site of the Association of Certified Fraud Examiners.

If you have a serious mess, get help.  If you are thinking of running an investigation yourself, check out Ms. Coenen’s post first.

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