Sports and Rorts

It must be the nature of nonprofits that they are susceptible to being ripped off, and sporting organisations seem to be the most often targeted. Perhaps its the amount of money that flows through them or, similar to unions, the cash flowing through is made up of thousands of small amounts. In these cases, it is hard for members or other stakeholders to imagine how much is actually involved in aggregate, and if the board isn't sufficiently informed or paying attention, then the scams can go on for some time and may never be uncovered.

The recent case of skimming small amounts of PAYG tax from payroll services illustrates how easy it can be to disguise theft when the takings are large numbers of small amounts.

 Whether they don't invest enough in policies and procedures, or internal controls, or whether they are seen as easy targets, there are a disturbing number of incidents where people are alleged to rip off nonprofits. Of course not all allegations are proved, but the risk to reputation and the loss of confidence by members of the management of their funds is sufficient to damage 'the brand' of the organisation.

The nonprofit board must ensure that there is external and internal control over the finance system, and be aware that nonprofit organisations are more at risk because of the high levels of trust which exists amongst the board, staff and members. Until that trust is betrayed.

This week alone we have:

An allegation of fraudulently obtaining $465,000 through a loan while acting as the president of the local sporting governing body.

A former senior Queensland racing bureaucrat faced court over allegations he was involved in the fraudulent awarding of contracts.

Police charge Steelers general manager with fraud.