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For further information on fraud prevention, or to obtain a copy of our fraud prevention checklist, sample policy or procedure, contact the Risk Management Helpdesk on 1300 660 827.
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Taking a Risk Management Approach to Fraud Prevention
Risk Assessment
The first and perhaps most important step in the fraud prevention process is to conduct a risk assessment. This process, although seemingly daunting and complex, need not be a difficult task to manage effectively. The search for potential risks may entail:
- interviewing staff;
- brainstorming ideas;
- analysing previous losses;
- reviewing previous audit recommendations and
- conducting a gap analysis of your existing systems.
Potential Risk Exposures
Fraud related risk exposures often faced by religious organisations include, but are not necessarily limited to:
- Credit card/cheque fraud;
- Falsification of expenses;
- Misappropriation of funds, stationary or other church assets; and
- Identity fraud.
Controls
Once the organisation has identified and prioritised their risks, they then need to implement risk controls. Some risk controls that religious organisations can apply to help prevent fraudulent activities within their organisation include:
- Implementing a Fraud Prevention policy and supporting procedures.
- Implementing a Whistle Blower policy and supporting procedures to safeguard individuals who speak out against fraudulent behaviour.
- Communicating Fraud Prevention and Whistle Blower policies and procedures to employees, volunteers and contractors.
- Instituting formal reporting procedures.
- Ensuring that volunteers and staff have a police check conducted prior to employment.
- Ensuring that end of day banking is counted by two staff members and then checked and signed off by a Senior Manager/responsible person within the organisation.
- Segregating cash handling and banking duties and ensuring that all financial records and processes are overseen by the Senior Manager/responsible person within the organisation.
- Educating staff and volunteers in expected behaviours and promoting a culture of ethical conduct.
- Instituting a reporting, investigation and remedying mechanism to treat suspected fraudulent activities.
- Conducting internal audits at regular intervals and external audits annually.
- Ensuring that fraud controls are regularly monitored for effectiveness and amended if deemed inadequate.
- Monitoring employee behaviour. An early warning sign to be wary of is possessiveness of workplace records and a reluctance to share tasks.
Fraud prevention doesn’t have to be a complicated task. One of the most effective risk controls an organisation can put in place is to simply keep financial and personal information under lock and key at all times.
By being mindful of the potential risks, vigilant and discerning in your employment practices and implementing some simple risk control strategies, catholic organisations can greatly reduce the risk of fraud occurring in their workplace.
For further information on fraud prevention, or to obtain a copy of our fraud prevention checklist, sample policy or procedure, please contact the Risk Management Helpdesk on 1300 660 827.
For information on Fidelity Guarantee Insurance or to obtain a policy, please contact your Account Executive on 1800 011 028. Fidelity Guarantee Insurance provides cover for money, negotiable instruments, goods and/or other property against theft, embezzlement or misappropriation by your employees. The definition of employees extends to include your directors or trustees and any authorised voluntary worker while engaged in the performance of honorary duties on your behalf.
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