We want to believe people are inherently honest, especially if they’re working or volunteering at a nonprofit organization. We get involved with these organizations for the right reasons, don’t we?

However, even for people with the best intentions, the temptation to steal can sometimes be too much. And if your group relies on charitable donations, the damage to your group’s reputation is much worse than the actual financial loss.

If your organization has effective fraud and theft prevention systems, everyone can relax, and concentrate on the good work that nonprofits do.

Sara Brainard, a CPA and Senior Associate in the Audit Department, with Ketel Thorstenson’s Rapid City office, works with a lot of nonprofit organizations to set up systems and policies to prevent fraud and theft. Internal controls, segregation of duties, monitoring and review policies do not require a big staff or a lot of extra time and effort, she said.

“First of all, try to separate duties between who controls the asset or function (cash, inventory, writing checks), who records and reconciles the information, and who is reviewing accounting records, financial statements, and bank activity,” Brainard explained in the Fall KT Addition newsletter.

“Internal controls are needed for all sizes of organizations, can always be improved, and are only as good as the people implementing the controls,” she said. Even in small organizations, there’s usually a board member or volunteer who can assist with the review of financial transactions, she added.