Should I Report Fraud In My Nonprofit?

This week I caught this podcast from Church Law with the results from a nationwide survey of 700 churches.  The presentation slides are available here.   The results apply to all nonprofits and are captured in the title:

         Fraud in Church: It Can Happen to You!

.....And it has happened to me!!! 

This conversation was unique due to the conversation about reporting!  There are so many cases of fraud in nonprofits, and yet most are not reported. I know this tension – the first time it happened to me, I did not report it. And I grew to regret that.  The second time I did report it!

I love the truth magnified in this podcast.  Failure to report it not only compounds the problem, but it also poor stewardship of Kingdom resources! They are not “our” resources.  And the statistics reveal that the person is likely to go somewhere else and do it again.  We have been poor stewards of Kingdom resources when we fail to report it and therefore let it happen elsewhere.  Reporting it, helps us to protect other organizations and protect that person by preventing them from being placed in a position where they can do it again. 

Vonna Laue, CPA and Erika A. Cole, Attorney offer great wisdom – decide what you will do before something happens to your organization!  This makes it about a principle not about a person.  Also, they remind us that what the investigators do with it is not our responsibility.  Any criminal charges are not filed by the nonprofit, they are filed by the authority.

Heavy stuff.  But real world.  I offer a FREE Fraud Factor Assessment on my website as one way to bring awareness to the risks that may exist in your organization.  Check it out here.