Construction contracts are especially vulnerable to fraud. According to a global study from the Association of Certified Fraud Examiners, the median loss in over 40 construction fraud cases was about $245,000. For small or mid-sized companies, that amount is staggering. What’s more, small organizations report more instances of fraud than their larger counterparts.
I’m sure you are one of those people who still trust the physical element of using paper-based purchase orders. Its tangibility dupes you into believing that you’ve got all your company’s purchases under control. But nothing could be further from the truth!
An upsurge in fraud has left company owners and social entrepreneurs feeling uneasy. This is not a new trend. Organizations have been plagued by fraud for years and it has threatened the existence of well-established charities like Oxfam and The Cancer Fund of America.
“There are three things in the world that deserve no mercy: hypocrisy, fraud, and tyranny.” Frederick William Robertson
What makes a good person commit fraud?
Most of us are brought up in good environments with a decent measure of morality etched within us. But have you ever thought that one day you might land in an unusual situation where your bills are more than your income and you are faced with a decision between doing the right thing or lowering your moral standards for just a moment and committing fraud to make ends meet?
Most times, charity funds get wasted in the purchase process. The most common examples of waste, in this case, are two people in the organization buying the same thing, or when an invoice comes in and an item costs more than was initially quoted so your organization ends up paying more than budgeted. The worst scenario is when suppliers collaborate with your employees to submit a fraudulent invoice. Continue Reading
In today’s tough economic conditions, spending responsibly has become a must for nonprofits. It goes without saying that organizations which spend within budget are more likely to succeed than those that do not. A challenge has always been: how do organizations report on higher fundraising rate without spending more funds. Continue Reading
Nonprofits organizations continue to suffer loss as a result of fraud. Fraudsters capitalize on every opportunity to steal funds. Millions of dollars are defrauded mainly by those in leadership.
Control measures such as double checking signatures have since proven not to be preventive enough. There are several examples that can illustrate this better. The Washington Post reported the following incidents, all happened between 2007 and 2013: