Sunday, January 24, 2010

Does Your Board Hinder Your Fraud Prevention?

I am often asked the question of how does the person charged with fraud prevention in an organisation, get buy in from the board and in some instances from management.

There is no easy answer, but the following are some ideas that may help:
  • Remind the board of their duties to the organisation – eg. duty of care;
  • Have the board consider what they organisation could do with an amount that could easily be lost to fraud, say $50,000 (eg. run a specific program, provide a service to 250 clients);
  • Step the board through the true cost of fraud (eg. the loss of funds to the fraud, extra interest on an increased overdraft facility, cost to investigate the fraud, legal costs);
  • Explain that employees and volunteers should not be concerned with the introduction of a fraud control program – the program is important to protect those employees and volunteers that are honest and find those that are not.

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