Using Conflict as a Catalyst for Change: month 2
We have produced a comprehensive report, Using Conflict as a Catalyst for Change, which is a guide to help you embrace, manage and mitigate conflict within your charity. In month two we look at conflicting roles within your charity.
Too little monitoring can lead to fraud
Trustees delegate the day-to-day running of the charity to its employees and management team. Of course, the trustees have first ensured that the charity has systems and controls which are designed to mitigate the risk of fraud from occurring.
The board (or the treasurer) should regularly check and test controls to ensure that they are being operated as designed and documented. But who relies on auditors to do this?
In fact, detailed review and checking of controls are not one of the auditor’s functions. It’s a board function to ensure that systems and controls are robust, have a good chance at preventing and detecting fraud and error, and operate as the control is documented and designed to.
What can you do to safeguard against fraud?
Trustees must ensure that they either themselves carry out regular testing of controls, or they employ an internal auditor to do so on their behalf.
It is essential that the board:
- Regularly checks key approval processes (e.g. payroll, large expenditure payments and capital projects etc)
- Have an open channel for all staff members to approach them directly
- Encourages a culture of openness
- Empowers staff to be vigilant and report suspicious activity
Of course, if you yourself have any suspicions, the key is to take action rather than ‘delegate’ it to another employee. Get in touch with the board,
they are responsible, so it is their call to make. Then as required, take specialist advice, quickly, before dismissing or alerting the accused!
Next month we will be focusing on the conflict between the needs of today with the demands of tomorrow.