Due to the coronavirus pandemic, many nonprofit organizations have been thrown into a full or partial remote work environment with little preparation. Now that working from home looks like a long-term reality, it’s important to adjust your internal controls and take advantage of these opportunities to reduce your risk of fraud, errors, and delays.
Use Digital Authorization Tools
When your key people are stuck at home or rotating through the office on a staggered schedule, digital authorization tools are crucial for preventing delays and mistakes. If a bill arrives on Friday, the mail gets sorted on Wednesday, the bookkeeper is in on Tuesdays, and the only person authorized to sign checks is quarantined at home…is that bill going to get paid on time? Even before the pandemic turned our world upside-down, many organizations with remote workers or staff who travelled frequently understood the benefits of digital authorization systems. Whether you’re approving and paying bills online through Bill.com, previewing payroll reports in Gusto, or digitally signing documents via DocuSign, you can retain your chain of approval and keep your accounting processes moving in a timely manner.
Assess New Risks
Nonprofit organizations should regularly perform risk assessments to detect any weak spots in your internal control procedures. With your usual systems in flux, now it’s more important than ever to review your current policies and identify any new risks that have cropped up in the work-from-home era. Think about how your team is actually working now, and ask yourself what could go wrong with this situation. Updating your risk assessments to reflect your new environment is the best way to get ahead of any potential problems and to develop a plan of action.
Maintain Communication
Whether you’re talking on the phone, video conferencing on Zoom, or chatting on Slack, it’s important to maintain regular communication among your team members while they’re unable to meet in person. From an internal controls perspective, even the perception of detection can reduce the risk of fraud. This means that when someone knows there is a good chance they’ll be caught, they are less likely to cut corners or be tempted into fraudulent activities. Risk assessments, financial statement audits, and fraud hotlines are all ways of creating a perception of detection, but even simple things like consistent oversight and a strong workplace ethics culture can reduce your risk of fraud.