The median loss for nonprofits that fell victim to fraud was $60,000, according to the Association of Certified Fraud Examiners’ (ACFE) Occupational Fraud 2022: A Report to the Nations. The average loss for nonprofits was $851,000. Such losses could prove devastating for many organizations. But with strong internal controls to prevent and detect fraudulent activity, organizations can reduce this risk.
The ACFE report found that almost 30% of the victim organizations lacked adequate internal controls to prevent fraud from occurring. In addition to minimizing fraud, comprehensive internal controls also help ensure accurate accounting records and financial statements. And strong internal controls are essential for compliance with relevant laws, regulations and grant requirements.