You’re on the council, audit committee or the board for a government entity. Do you know what the position’s expectations and responsibilities are.
Sharing your time and talents isn’t all recognition and roses. There’s also a level of personal liability. Ignorance to fraud risks without action can include removal from the position and damage to a reputation. In some circumstances, there may be civil damages for negligence. Sometimes the nicest people who appear to live for the organization create unimaginable havoc, and you can’t turn a blind eye.
These positions typically include a duty of care regarding oversight for the government’s operations, understanding the fraud risk and establishing committees with responsibilities for managing fraud risk. These duties become even more all-encompassing if you find yourself on the audit committee. Then your responsibilities can include such roles as overseeing audit functions, monitoring internal controls, code of conduct compliance, investigating/initiating the investigation of allegations of fraud and monitoring adequacy of insurance protection.
Governments can be highly susceptible to fraud for many reasons. One example is that segregating duties with smaller governments is more difficult (if not impossible). There might not be enough people cross-trained to fill in and cover positions, in addition to completing regular review procedures. Another factor is that there can be a lot of cash—physical cash—coming through the door. Physical cash can be hard to secure even with strong internal controls.
If you find yourself on the council, audit committee or government board, what can you do to proactively prevent fraud and protect yourself? Here are five fraud prevention tips to consider:
Should you have any questions regarding fraud prevention, don’t hesitate to reach out to your Eide Bailly professional. We will be happy to discuss and determine what the best components of a fraud prevention program are for your organization, regardless of size.