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191 Cases: Fraud in Nonprofits

The document discusses fraud risks at nonprofit organizations. It notes that nonprofits have fewer resources to prevent and recover from fraud and lack certain internal controls, making them more vulnerable to fraud. The top fraud schemes at nonprofits are corruption, billing fraud, and expense reimbursement fraud. Owners and executives commit 39% of nonprofit fraud cases, with median losses of $250,000, while employees commit 23% of cases, with median losses of $21,000. The top three control weaknesses at nonprofits are the lack of internal controls, lack of management review, and override of existing controls.

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99 views2 pages

191 Cases: Fraud in Nonprofits

The document discusses fraud risks at nonprofit organizations. It notes that nonprofits have fewer resources to prevent and recover from fraud and lack certain internal controls, making them more vulnerable to fraud. The top fraud schemes at nonprofits are corruption, billing fraud, and expense reimbursement fraud. Owners and executives commit 39% of nonprofit fraud cases, with median losses of $250,000, while employees commit 23% of cases, with median losses of $21,000. The top three control weaknesses at nonprofits are the lack of internal controls, lack of management review, and override of existing controls.

Uploaded by

Yus Ceballos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Nonprofit organizations can be more susceptible to fraud

Fraud in Nonprofits due to having fewer resources available to help prevent and
recover from a fraud loss. This sector is particularly vulnerable
because of less oversight and lack of certain internal controls.

Nonprofit schemes Percent of cases

Corruption 41%
191
NONPROFIT
Billing 30%

CASES Expense reimbursements


Cash on hand
23%
17%
Noncash 16%
Skimming 15%
MEDIAN LOSS AVERAGE LOSS
Check and payment tampering 14%
$75,000 $639,000
Cash larceny 12%
Payroll 12%
Financial statement fraud 11%
Register disbursements 3%

Owner/executive
39%
of cases
MEDIAN
LOSS $250,000
Perpetrators
AT NONPROFITS

Manager/supervisor
35%
of cases
MEDIAN
LOSS $95,000

Employee
23%
of cases
MEDIAN
LOSS $21,000
REPORT TO THE NATIONS 2020 GLOBAL STUDY ON OCCUPATIONAL FRAUD AND ABUSE © 2020 Association of Certified Fraud Examiners, Inc.
Nonprofit TOP 3 CONTROL WEAKNESSES
organizations have
fewer anti-fraud 35% LACK OF INTERNAL CONTROLS
controls in place,
leaving them
19% LACK OF MANAGEMENT REVIEW

MORE
vulnerable
14% OVERRIDE OF EXISTING
INTERNAL CONTROLS

to fraud
76%
68%
57%

43% 44% Nonprofit


40% organizations
Other
24% organizations
21%

Surprise audits Formal fraud risk Management review Internal audit


assessments department
CONTROLS

Detection AT NONPROFITS

TIP OR INTERNAL MANAGEMENT BY EXAMINATION


COMPLAINT AUDIT REVIEW ACCIDENT OF DOCUMENTS

40% 17% 13% 7% 6%

REPORT TO THE NATIONS 2020 GLOBAL STUDY ON OCCUPATIONAL FRAUD AND ABUSE © 2020 Association of Certified Fraud Examiners, Inc.

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