Recently, I met a senior leader from one of the major banks. She informed me that charities are the top source of cheque fraud and wire transfer fraud. She noted that because charities are often thinly staffed and rely on old technology, we are particularly vulnerable to these problems. 

If you operate under the illusion that anyone who works for a charity as an employee or volunteer is a good person who would never steal, consider this a timely heads up. Sadly, even charity employees steal. Your optimism is a perfect chance for a charity thief.

What can you do? A few good steps are:

• Ensure that your Board has a chartered accountant as a Board member.
• Contact the Charter Professional Accountants and double check that your Auditor is an actual member in good standing.
• Give the Executive Director and Board Chair electronic access to the bank accounts and have them do unannounced spot checks periodically of the accounts.
• Always have at least two people handle cash - this is particularly important for things like fundraising events.

You can't always prevent fraud but you can certainly keep a watchful eye. The first step is recognizing that charity fraud does exist and taking action.

Ann Rosenfield, MBA, CFRE is the editor of Hilborn Charity eNews and Principal for Charitably Speaking.

Author's note

Thanks to Roland Cinco who provided some tips for this article.