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GRC Professional : GRC Winter 2012
11 relating to misappropriation of funds, according to Shaheen Evans, chief risk officer of Villa Maria, a large NFP within the hospitals and healthcare industry. Any financial controls put in place should be tailored to the nature of the business. Shaheen says the level of compliance required in the heath care industry in particular is significant because those organisations are dealing with sensitive issues relating to people’s health and welfare. Accounting matters Financial accounting and tracking processes within the organisation ensure timely and accurate identification, mon itor ing, eva luation, m an agement a nd repor ting of misappropriation risks. “For us, and I would say for many NFPs, it is standard practice to continually review the organisation’s financial r isk policies, to ensure author isation, monitoring and acquittal of financial transactions are appropriately addressed,” Shaheen say s. Also, he says, it’s important appropriate education and training is provided to all staff on such issues, and that organisations work closely with the insurer to suppor t the procedures the organisation has in place. Whistleblower policy BDO’s Williams says appropriate whistleblower facilities s hould always be implemented to help st akeholder s r epor t fraud. According to the BDO sur vey, only 11 per cent of r espondents have implemented a whistleblower policy despite tip-of fs being one of the most effective ways to discover f r aud (34 per cent). Certainly, in the case of NFPs, many frauds can go unrepor ted, Mills Oakley’s Visevic says. “I’ll always advise the organisation to go to the police but I’ve seen [not reporting the fraud] happen in the amount of tens or even hundreds of thousands of dollar s because smaller NFPs either don’t have the resources to follow it up or they are too afraid of tarnishing their reputation in the community,” Visevic says. ••• 1. Includes all types of types of cash theft and the misappropriation of cash by deception (for example larceny and embezzlement). 2. Includes all electronic fund transfers and online banking. 2012 2011 Figure 1: Types of fraud cash ThefT1 payroll fraUd crediT card fraUd oTher eXpense accoUnT fraUd ThefT of asseTs cheQUe forGery kickBacks & BriBery online paymenTs2 ThefT of invenTory Brand fraUd daTaBase fraUd financial sTaTemenT fraUd inTellecTUal properTy loTTery prize fraUd advocacy relaTed fraUd 40% 14% 10% 8% 5% 4% 4% 4% 4% 3% 1% 1% 1% 1% 24% 7% 0% 20% 10% 7% 2% 7% 2% 12% 0% 0% 0% 0% 0% 5% 2% 2% Source: BDONot-For-Profit Fraud Survey 2012
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