Forensic Accounting Experts Support Nonprofit Organizations

Helping to preserve your charity’s resources and its good name

Fraud happens everywhere, but nowhere is it more despicable than within and against charitable organizations. Nonprofit corporations are established to do good for society, so it takes a particularly cynical type of scammer to rip them off. However, much of the blame must go to nonprofit leaders, who are often far too trusting, which creates a lax atmosphere where fraudsters can flourish. At North American Forensic Accounting, we help nonprofits recover from fraud that damages their mission and their image. If you are the leader of a nonprofit organization, you owe it to your donors and the beneficiaries of your services to combat fraud and hold wrongdoers fully accountable. When donors know that a nonprofit is vigilant about fraud control, and the charity’s records show negligible losses from waste and corruption, potential donors are more likely to view the organization as worthy of support. The certified forensic experts at NAFA can show you how to increase donor support and better fulfill your mission..

Litigation support when misconduct has damaged your reputation for integrity

Nonprofit organizations reflect some of the best aspects of American culture, especially our generosity and desire to improve society for all. But nonprofits rarely reflect the best practices of a business. This is unfortunate, because the more ethical and efficient a charity is, the more confidence donors have in it, and the more willing they are to support it. In the worst cases, officers of a nonprofit have enriched themselves at the expense of the charity’s mission and reputation.

When misconduct in your organization creates scandal, you must take decisive action to show your donors you intend to right the ship. NAFA can provide a full spectrum of services to assist your recovery, including:

  • Thorough investigation of embezzlement and misappropriation of assets
  • Review of client use of funds compared to budgeted amounts and other financial records
  • Performing loss calculations, taking into consideration all relevant factors
  • Assessing the impact of events upon the organization’s image and donor confidence.
  • If needed, we can further support your litigation by serving as expert witnesses at trial.

The quicker and more forthrightly you restore confidence, the better for the health and viability of your organization.

Where fraud commonly occurs in nonprofit organizations

Nonprofits are attractive targets for fraudsters because the people running them are often naïve about the risks. They’re in business to do good and readily trust that employees and volunteers assisting their work share their scruples about altruistic service. And while that might be true for the majority of your professional and volunteer staff, three factors can change their mind:

  • Temptation — Even the most upstanding individual who handles other people’s cash and property is tempted to help himself. What keeps them in line, besides a well-formed conscience, is the belief that someone will find out. When it becomes clear that no one will find out, the temptation can become overwhelming.
  • Disillusionment — People come to nonprofits with the best of intentions. But they can be frustrated: in the way the organization is run, in how they are personally treated, or in seeing others advance professionally over them. Resentment against the organization makes it easier to give into temptation.
  • Financial stress — People under pressure make poor decisions. When someone is financially strapped and they’re working for an organization that helps the needy, it’s easy for them to rationalize theft through their own financial struggles.

When these three factors coalesce, you can expect to see fraud in various aspects of your operations. Here are some categories and examples:

  • Billing — Paying invoices for goods and services never received.
  • Disbursement — If your organization awards grants or scholarships, or presents awards for contests, you must guard against conflicts of interest among your decision makers.
  • Noncash assets — From office supplies to promotional items to computers, if an item can be converted for cash, there is a chance it will vanish.
  • Payroll — Workers padding their hours and claiming overtime they didn’t work. Payments for contractors who don’t really exist.
  • Expense reimbursement — Employees purchasing personal items on expense accounts.
  • Corruption — No-bid contracts for goods or services with illicit benefits to an officer misusing authority. Bribes taken to authorize transactions.

Your organization needs effective controls to catch this type of activity, so you can stop fraud now and deter it in the future.

Contact North American Forensic Accounting to deter fraud in your nonprofit organization

North American Forensic Accounting helps nonprofits throughout the United States detect fraud and assess losses due to internal misconduct. NAFA serves clients from offices throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area. Call us at 347-286-4860 or contact one of our offices online to schedule an appointment.