Fraud 2.0 February 2016 All rights reserved Web: www ...€¦ · • Non-Cash 15.0 • ... Fraud...

Fraud 2.0 February 2016

All rights reserved Web: www.TeamNFP.com Toll-Free: 866-748-2933

Welcome to “Fraud 2.0”

February 16, 2016

Sponsored by TeamNFP & Your MIP Business Partner Host: Q Johnson, Managing Member, TeamNFP Software

Moderator: Jan Triplett, Marketing Director, TeamNFP Software

Housekeeping Items

  Please mute yourself

  Use the “Chat” window if you have a question or technical issue

  CPE’s & Certificates — please provide your info

  Recording & Slides will be available — send request   Short demos after the session   Feedback survey emailed after the session

Fraud Spotlight

http://blog.abila.com/check-fraud-prevention-ten-steps-to-implement-now/ http://blog.abila.com/aicpa-2014-five-takeaways-to-help-your-organization-prevent-fraud/ http://blog.abila.com/embezzlement-and-fraud-how-secure-is-your-association/ http://blog.abila.com/association-security-continued-what-you-need-to-know-about-audits/ https://www.washingtonpost.com/investigations/inside-the-hidden-world-of-thefts-scams-and-phantom-purchases-at-the-nations-nonprofits/2013/10/26/825a82ca-0c26-11e3-9941-6711ed662e71_story.html (2013) http://associationsnow.com/2014/04/audits-might-think/ (fraud and audits) http://blog.abila.com/five-simple-ways-for-nonprofits-to-leverage-technology-to-detect-and-deter-fraud/   Future reading material.   Now, our expert, Bryant Truitt, will present actions to take TODAY!

5

TeamNFP Software Presents

Fraud 2.0: Fraud Assessment for CFO’s

Speaker: Bryant Truitt, MBA, CCS, CFE Brytan & Associates, Inc.

February 18, 2016

6

Disclaimer

For general information and educational purposes only—the presenter and sponsors

are not engaged in rendering accounting and/or legal advice.

Brytan & Associates, Inc.

© 2016 Brytan & Associates, Inc., Kerrville, TX

About the Presenter Bryant Truitt, MBA, CFE, CCS

•  Founder & CEO Brytan & Associates

•  Found over $9.1 Million in losses due to fraud & embezzlement

•  Brought criminals to justice working with Federal, State & Local government agencies

7



Median Losses Due to Financial Crimes in Nonprofits

•  Financial Statement Fraud: $1,000,000

•  Asset Misappropriation: $130,000

Source: ACFE Report to the Nation 2014

8



9

Where Fraud, Embezzlement, Waste and Abuse Happen Most

• ASSET MISAPPROPRIATION • CORRUPTION • FINANCIAL STATEMENT FRAUD



Major Areas of Asset Misappropriation in Nonprofits

•  Check Tampering 35.0% •  Billing 32.5 •  Expense Reimbursements 32.5 •  Corruption 30.0 •  Payroll 20.0 •  Non-Cash 15.0 •  Skimming (before entry) 12.5 Source: ACFE Report to the Nation 2014

10



Agenda

•  Definitions •  The Embezzler’s Viewpoint •  Profile of a Criminal •  Assessing Your Risk & Recommendations

•  Culture •  Hiring •  Employee Duties & Tasks •  Handling Money (Vendors, Checks, Payroll)

11



2 Financial Crimes – NOT the Same

Fraud All about Documents and Conduct! A false representation of a matter of fact whether by

words, numbers or conduct. Deception!

Embezzlement All about Money &/or Property! The appropriation of property or money by a person to whom it has been entrusted, or to whose hands it has lawfully come. It’s Theirs!

Is it fraud, embezzlement, waste or abuse?

12



13

Embezzler’s View of Nonprofit

§  Easy pickings §  Smarter than the CFO! §  Opportunity! §  Rationalization of need; others do it §  Will receive light punishment if caught



14

What Do Criminals Look Like? Brytan & Associates, Inc.


Your Team!

15

Profile of an Embezzler •  Cause Committed Team Member or

Volunteer – “Family Philosophy” •  Believable, Convincing, Intelligent •  Impeccable Past •  Any Age, Gender or Nationality •  Tireless Team Member or Volunteer



TRUST BUT VERIFY


Profile of an Embezzler

§  Takes authority & responsibility §  Vast knowledge of computers §  Knows non-profits operationally §  Secretive – wants private office §  Dislikes change they can’t control §  Wants to do the CFO’s private &

personal business §  Seasoned – prior history §  Has No Remorse!


16

17

Warning Signs . . .

§  No Vacations §  Lifestyle Changes §  Family Crises §  Empire Builder &

Indispensable §  Against Change §  Requires Authority

& Responsibility §  Secretive

§  Computer control §  Your nonprofit or

theirs? §  Willing to work dawn to

dusk §  Wants to do their own

hiring §  Does anything,

anytime



18

What is the #1 reason for embezzlement?

A hidden and pressing financial need!



Culture

•  RISK ASSESSMENT •  Impacts ability to get donors, funding, and

volunteers •  Affects morale & productivity •  Loses public trust; hurts brand and image

•  RECOMMENDATIONS •  “Trust but Verify” Techniques

•  Zero Tolerance = Compliance & Security •  Different Password & Security Level for every

server and change regularly •  Train all staff & volunteers – TIPS Brigade! •  Put policies in Employee Manual — get sign off

19



HIRING —Team and Executives

•  RISKS •  Failure to achieve Mission •  Compliance problems •  Grants in jeopardy •  Hiring incompetence or thief(s)

•  RECOMMENDATIONS •  Background checks on ALL — Even C Level •  Get bonded — Low cost $25-$2500 •  Consistently monitor remote access •  Cover fraud & misappropriation of assets in

training at all levels and employee manual

20



21

Employee & Board Duties & Tasks Brytan & Associates, Inc.


•  RISKS •  Fraud, embezzlement, waste or abuse •  Security clearance breach •  Risk to donors, funding sources, etc. if

data stolen or ID Theft

•  RECOMMENDATIONS •  Segregation of duties •  Change Passwords & Security Levels

•  ASAP if Employee Leaves •  Use Job Title ONLY — NEVER NAME

22

$ Handling Money $ §  Vendors

§  RISKS — Ghost Vendors, Refunds §  RECOMMENDATIONS

§  Clean list §  Electronic purchase orders §  Cross-training

§  Payroll §  RISKS — Ghosts (Pay, Benefits, OT,

Increases, Advances) §  RECOMMENDATIONS

§  Delegate duties §  Keep payroll list off site §  Payroll service



23

$ Handling Money $ § Checks/Credit Cards (CC’s)

§  RISKS §  Fraud, Embezzlement, Waste & Abuse §  Padded expense account — major area of

loss in nonprofits §  Misuse of CC’s, ID Theft §  International fraud

§  RECOMMENDATIONS §  Positive Pay system §  Check Clearing System/ shredding system §  Review paperwork of checks > 60 days §  International Wire transfer system §  Shorten time checks are negotiable §  Control ordering, purchase & printing of

checks & ordering of CC’s



24

What to Do Next?

1.  Review Risks from TOP down & Bottom up – surprises await

2.  Develop Action Plan – Involvement 3.  Communicate 4.  Training 5.  “Living” – follow-up, feed, benefit! 6.  Goal: Mission Fulfillment



25

Q & A

To discuss your situation in private, call (210) 241-6329

or email [email protected]



26

Certificates/CPEs

All attendees will get a certificate from TeamNFP, but we must have your email in order to send it. To get, CPE Credit, provide your email so we can send you the test. Take and return. Then we will submit your name to secure the CPE credit for one hour.



27

TeamNFP Software and Brytan & Associates

Thank You! It has been a honor and pleasure

to be with you.

  Provide your information if you want CPE credit

  Ask your TeamNFP Business Partner about our specially priced bank fraud prevention software bundle (Positive Pay & Check Clearing TM8)

  Remember, any 2 TeamNFP software products bought together ALWAYS earn you a 10% discount!

3 Action Items

  Special thanks to our expert Bryant Truitt our expert & Jan Triplett for moderating.

  Thanks to our TeamNFP Business Partners who helped get the word out. They sell and work hard to help you make the most of Abila’s MIP and TeamNFP software.   Hope to see you at AUDC in March. Stop by & say hello Booth #406.

  Next Webinar: “What Nonprofits Need to Know about ACA , Tuesday, May 17, at 3:00 CDT.

Thanks & Next TeamNFP/Partner Webinar

Fraud Prevention & Productivity Improvement Software for MIP from Abila

Web: www.TeamNFP.com Toll-Free: 866-748-2933

Thank you for joining us!

Fraud 2.0 February 2016 All rights reserved Web: www ...€¦ · • Non-Cash 15.0 • ... Fraud...

Documents

Transcript of Fraud 2.0 February 2016 All rights reserved Web: www ...€¦ · • Non-Cash 15.0 • ... Fraud...