Preventing Acts of Dishonesty from Volunteer Workers

Preventing Acts of Dishonesty from Volunteer Workers

Many organizations rely on a trusted group of employees and do not consider the need for stronger means to protect the organization’s financial assets. Unfortunately, employee theft is a risk that cannot be ignored, as it accounts for roughly 30 to 50 percent of business failures. The importance of volunteer and employee dishonesty insurance can not be stressed enough, as it can truly protect your organization. That coverage is available through Volunteers Insurance Service Association.

There are many warning signs to watch for, and practical steps you can take, that still allows for a trusting process but also verifies safe operations in your organization. 

How to Prevent Acts of Dishonestly 

Be sure to always check the credit card itemized bill before payment. Be aware of how many cards have been issued and who has them. It is in your best interest to do an annual verification of this information with your bank. 

Require that your auditors check all credit card bills. The executive director and at least one board member should meet with the auditor without other staff present, to discuss the quality of financial handlers and operations. 

Hiring and Training

Carefully screen and select volunteers by reviewing background and work experience, and checking references. Ask former employers, “Would you rehire this person to handle money?” Taking note of unspoken reservations. You will also want to verify credit references.

Require all employees to take periodic vacations, and be certain that no employee or volunteer is indispensable by implementing cross-training from the very beginning of onboarding so at least two people know how to do each job. 

Check Handling 

Segregate accounts-receivable duties. Ideally, one person opens the mail, while another prepares deposit slips, and another posts payments, and so on. No one person should be handling everything by themselves.

List all checks received and make deposits daily, and issue pre-numbered receipts for all cash received. Control who is able to sign checks; when preparing checks for signature, attach invoices and other documentation and don’t allow signature stamps. Consider requiring two signatures for checks above a certain amount. The person authorized to sign checks should be able to identify payees that might not be legitimate. 

It is smart to reconcile statements immediately. The executive director, chairman, or other person authorized by the board should receive the bank statement each month unopened, open it, and quickly review canceled checks for signature, payee, and endorsement.

Nonprofit organizations seek to perform good work, and dishonest volunteers can completely undermine these efforts. Are you interested in learning more about screening and other methods of preventing volunteer dishonesty? For just $25 per year, joining VIS will offer you complete access to our VIS Vault of resources on volunteer dishonesty, risk management, and more. You also will be eligible for substantial discounts on background screening services through VIS’s partner Sterling Volunteers. Join today!

About VIS

Volunteers Insurance Service Association, Inc. (VIS) was established in 1972 for the purpose of providing insurance and risk management services for volunteer-based organizations. In addition to still providing these insurance services today on a nationwide scale, we have expanded to provide noninsurance resources for members to manage their risks and improve their operations. By transferring the volunteer risk exposure to our program, we can help you protect your organization. Contact us today at (800) 222-8920 for more information on our programs and services.