Fraud Prevention and Financial Controls
Every nonprofit is at risk of fraud. Just like all businesses, it is possible for people to take advantage of weaknesses within the organizational financial management policies, procedures and systems. For nonprofits, however, the consequences can be even more dire than they are in general. For starters, nonprofits hold the public trust - they are designed to return benefits to society instead of to stakeholders. So, if you really think about it, nonprofit fraud is perpetrated against the public at large, and harms more people than just those with a financial interest in the organization. Not to mention, losing the public's confidence by allowing fraud to occur can permanently damage the reputation of an organization, leading to decreased public involvement and lower fundraising results.
If you care about preventing fraud (and you freaking should), take a look at this presentation I prepared for the University of Oregon Nonprofit Clinic. It's designed for students who conduct an in-depth assessment of an organization's governance capacity and performance, so this does address that to some degree. However, the bulk of it covers the importance of fraud prevention, what fraud looks like, and how it can be prevented by implementing financial controls. At the end, there are some great resources for further study and investigation if your organization needs to up their game on this front.