Fall 2015 Issue of Horizons

Review To ensure the not-for-profit’s policies, procedures and code of conduct are both relevant and up-to-date in this changing environment, perform an annual review of these documents and document this review and approval in the board minutes. Significant due diligence should also be applied when selecting talented personnel for your organization. The organization’s culture should be a motivating factor in every potential candidate’s decision as to whether to accept a position. Likewise, an interviewer should be abundantly clear that ethical behavior is expected. While there is some cost attached to background checks, such checks remain a best practice. A significant finding in social psychology is that social forces will outweigh personal integrity. To address this pressure, an organization’s management must ensure, to the best of its ability, that every employee hired exhibits

ethical behavior and integrity. Consider providing an annual ethics training course for both employees and volunteers, and include this training in the on-boarding of employees. This is most important, because tips received from employees are the leading initial detection method of fraud. Without annual training and raising awareness of ethical behavior, employees may be reluctant to report perceived instances of fraud or may be uncertain as to what types of actions should be reported. One of the easiest methods for employees to report possible fraud is via an anonymous hotline. Remember though, the hotline is only as good as the adequate vetting and follow up of reported possible instances of fraud. Example Finally, there is simply no substitute for leading by example and for strong internal controls and oversight surrounding your organization’s assets.

RubinBrown’s Not-For-Profit Services Group As a recognized leader in the not-for-profit sector, we have the resources essential to serve arts and cultural organizations, foundations, private schools, religious organizations, social service agencies and trade and membership associations.

Judy Murphy, CPA, CGMA — St. Louis Partner-In-Charge Not-For-Profit Services Group 314.290.3496 judy.murphy@rubinbrown.com

Sharon Latimer, CPA — Kansas City Partner & Vice Chair Not-For-Profit Services Group 913.499.4407 sharon.latimer@rubinbrown.com

Amy Altholz, CPA, CGMA — St. Louis Partner & Vice Chair Not-For-Profit Services Group 314.290.3369 amy.altholz@rubinbrown.com

Kim Ryan, CPA — Denver Manager Not-For-Profit Services Group 303.952.1208 kim.ryan@rubinbrown.com

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