It's not uncommon that a nonprofit business organization becomes the target of employee fraud and embezzlement due to lax financial control systems as compared to for-profit companies. It also doesn't help that the board are often too trusting of the people handling their internal affairs and outside transactions. What's worse is that this type of criminal offense is sometimes left unreported because of the steep financial costs the investigation entails and the bad reputation it will place on the nonprofit's image. With competition so fierce and resources so few, some of these organizations simply cannot afford to have their names blemished in the eyes of their funders and donors.
While you can find a notary public California to help you with legalities, here are some ways in which you can prevent your nonprofit business organization from being victims of embezzlement:
The Signatories
For cash disbursements, have two signatories for the authorization of these expenditures. You can always have one of your board officers as the second signatory in implementing this policy.
Furthermore, all disbursements made, be it in the form of cash or checks, must always be justified through the accompaniment of an invoice. Get an apostille California for all documents related to the business if possible.
Never Sign Checks in Advance
This is often done when the nonprofit's director will not be around for a certain period. This can be very tempting and serve as an invitation to abusive employees to do fraudulent activities while the signatory is away. For those organizations using credit cards, do not assign a single person to use and approve it along with the accompanying charges. These statements must consistently be reviewed together with a board officer or director along with the accompanying expenses.
Annual Inventories and Reviews
This is needed in order to make sure that no equipment is missing and everything is accounted for. In doing the inventory, make sure all the serial numbers are listed and have identification marks engraved so tracking can be possible in the event of theft.
Thorough Manpower Screening and Background Checks
No one can be excused from this; all employees have to go through this rigid process for the protection of the organization and to put its best interest at hand. Looks can be deceiving, and even the most well groomed, well mannered, and seemingly well-educated individuals can have undisclosed records pertaining to fraud and embezzlement.
Protect the Whistle-blowers
A whistle-blower program must firmly be put in place and everyone must be aware of this from day one, so that when the time comes that a case needs to be solved, those who are aware of the actual turn of events will not be afraid to come forward and speak out. This can be a challenge if the employee knows that he can lose his job or his superior is involved. The board, therefore, needs to be prepared for such events, to the extent of learning notary basics, and provide their employees with protection and legal counsel if deemed necessary.
When you put all these preventive measures in place for business, you can rest assured it can overcome challenges and obstacles lurking ahead.