Potential for Fraud

As clubs continue to prosper, committees and managers need to be ever vigilant that they have effective tools in place to minimise the risk of fraud occurring.

Committees need to ensure that fraud prevention strategies are covered in their risk management strategy, which should be sighted and signed off on an annual basis. Should an incidence of fraud occur at your club, it has the potential to impair the club’s ability to achieve its goals, deliver member services and to damage the club’s reputation – damage that can impact your relationship with sponsors and government funding sources.

It is common for committees to underplay the likelihood of risk, noting the trustworthy staff and good club culture as reasons why it would never happen. That was probably what the 12% of not-for- profits* thought before they suffered fraud in the past two years.

The main factors contributing to fraud in the sector are:

• the overriding of existing controls
• breaches of trust
• poor internal controls
• lack of accountability within the club.

Fraud happens in a variety of ways including cash theft, payroll fraud, credit card fraud, theft of assets and inventory, cheque forgery and online payments.

Protect your club by continuous monitoring and improvement of prevention and detection processes. Processes should include good club governance, strong financial controls including segregation of duties, staff training and awareness and creation of a whistleblower program.

If fraud is suspected, care and caution are needed to make certain that a proper and fair investigation can be undertaken. We suggest you contact CCV to discuss an appropriate course of action for your club.