There are several risks to your organisation’s finances that the treasurer is responsible for taking reasonable steps to anticipate, prevent, detect and/or report.

One of the most common types of risk you should take steps to prevent is the loss or unauthorised disclosure of sensitive data. For example, account information and other financial data, as well as demographic or confidential personal information, can all be easily by physical stolen or lost in other ways, if you don’t take steps to anticipate how the loss might occur and take steps to prevent it.

In addition to physical theft, a loss can occur due to computer errors, or deliberate cyber-attack. Fires, and weather-related events such as floods, earthquakes and other phenomena can also lead to a loss. What steps are you and your board taking to reduce your nonprofit’s risk of loss? The following strategies can help you assess your risks and reduce the chance that your organisation will experience a loss.

Establish Internal Controls

Establishing procedures that allow you to monitor and control the flow of information and other assets in your organisation will go a long way to reducing the chance of loss. A few steps to consider taking include establishing practices that will segregate cash handling and similar duties.

Follow best practices when it comes to using logins and passwords, going online and sending or receiving emails. Make sure that everyone in your organisation knows the basics of securing their workstations and laptops to reduce the risk of infecting their devices with malware and other digital viruses that can slow down processing and compromise the security of your information and other assets.

Control who has physical possession of blank checks, and whose signature is required before they can be issued and cashed. Ensure that the person who reconciles the bank statements isn’t the same person counting the cash and signing the checks.

For your organisation as a whole, keep a record of which person is assigned which duties and what each person is responsible for. Not only will this help you and your board hold others accountable, but a thorough job description will also help to clarify for the holder of the position what is expected of them. This way they will know exactly what their role is, and what duties they must perform.

Simplify and Clarify Processes

The more complex your bookkeeping and other processes are, the more likely they are to get out of hand. Update your bookkeeping software to one that is automated, and in the cloud, to increase the security of your information as well as enable you to run reports in real time so that you always know where your organisation stands for any point.

Admin Bandit’s software suite is especially suited to this task, as it allows you to run an operations report that will show dates and amounts of transactions, the dates it is entered and when the account was last reconciled. Information like this can give you a heads-up about potential trouble looming on the horizon so that you know if you need to follow up by further investigating unusual amounts and other details that look out of place.

Whether or not you detect irregularities in a report, it’s also a good idea to conduct your own internal audits periodically to help you determine if everyone is following your organisation’s standard protocols and internal controls. This will also enable you to find areas where practices and procedures need to be improved.

Increase Transparency

Fraud and other forms of theft tend to occur in those areas that are typically hidden or otherwise overlooked. Shine a spotlight on your organisation’s finances and other activities by taking steps to increase transparency and accountability. Post your board’s major decisions, as well as your budget and annual financial results online so that your donors and other interested parties will see how their contributions are being used to support the cause.

Allowing the public to access this information makes it more likely that any wrongdoing will be discovered, and, encourages everyone in your organisation to operate in a more open, honest and ethical manner knowing that their actions are subject to external, public review.

Establish Policies that Protect Whistleblowers

Most of the time, fraud and other risks are uncovered not by an internal review, but when someone in your organisation notices something is amiss and comes forward. Unfortunately, theft often goes unreported because the person that observes the fraud occurring is fearful of retaliation either by the perpetrator or the organisation. Work with your board to establish a whistleblower protection policy so that everyone connected to your nonprofit will feel safe and feel free to take action and report the theft, harassment, potential hazards and other risks in your workplace.