Steps To Prevent Cash Donations From Skimming
Written exclusively for My Community Workplace for Not-For-Profits Organizations
A Florida woman surrendered to police after authorities charged her with seven counts of wire fraud in connection with her scheme to embezzle funds from a nonprofit.
The woman worked as a volunteer executive director for a nonprofit pageant scholarship organization. According to authorities, the woman created a "dummy" corporation with a name similar to the nonprofit's, but controlled solely by her. Over several years, she deposited a portion of incoming donations into this fraudulent corporate account.
Local authorities, who began their investigation when others within the nonprofit noticed missing funds, believe the woman stole close to $100,000 and used the funds for personal purchases and expenses. They also found evidence that she defrauded two other local nonprofits and a business with ties to the state pageant program. "Ex-Miss Florida Scholarship Director Accused of Stealing Program Donations" www.nbcmiami.com (Feb. 23, 2022).
- Make sure your procedures for collection of cash donations involve multiple individuals.
- Provide a safe storage location, and require the cash be deposited with a bank in a timely manner.
- Assign someone not involved with collection to reconcile receipts of cash donations with bank deposit records.
- Provide donors with receipts at the time of donation, as well as a "year-end" donation summary that communicates a method for reporting discrepancies.
- Record all donations received and review donation totals on a monthly basis, looking for unusual drops in receipts.
- Train employees and volunteers on embezzlement risk and what it can look like, and create a safe and easy method for them to report suspicious conduct or violations of your financial control measures.
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