The risk is that an employee or volunteer either does not pay for or pays undervalue for an item that has been donated to the organisation for the purpose of sale so as to raise funds for the organisation.
Methods to Mitigate the Risk
To reduce the likelihood of this occurring, the following steps could be taken:
Have all donations of jewelry and other small valuable items sent directly to a valuer or auctioneer rather than to your organisation’s office. The valuer or auctioneer can catalogue items which provides independent verification that the items have been received and the value of those items;
Set a policy that states one of the following:
- Employees / volunteers and their immediate families cannot purchase these types of donations in any circumstances;
- Employees / volunteers cannot purchase these types of donations unless it is at auction; or
- Employees / volunteers can purchase these types of donations before auction but only at the valuation / reserve price set by the valuer.