Fraud Prevention Programs, part 2

Our Fraud Awareness in the Church series continues with part 2 on Fraud Prevention Programs – Fraud Reporting. We asked churches to respond to this statement:

“Our church has established appropriate channels for reporting and resolving sensitive issues like fraud and illegal acts. (Examples include establishing an anonymous fraud hotline, posting notices, etc.)”

Survey Results: Only 40% of the respondents have established any form of fraud reporting mechanism.

KEY: Key Point: Statistics make it clear that the most common method of fraud detection is anonymous tips!

Few churches have the stomach or the nerve to do what businesses and local governments are increasingly doing.  For example, A “Report Fraud” link on a school district’s or city’s website gives comfort to most taxpayers.  But, the same people would choke if they saw a fraud tip hotline on their church’s website!

One solution I have seen:

A church contracted with an HR services firm to take care of all of their payroll compliance issues such as wage and hour laws, discrimination, workmen’s comp, immigration, etc.  The HR company also drafted the church’s personnel manual which included an 800 number hotline.  The HR professionals maintain the hotline assuring that all fraud reporting remains confidential.

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