Since financial statement audits (normally $10-$20K per year) are out of the question for small organizations, what are some measures they can take to prevent theft and ensure accurate reporting?
For starters, the choice of an accounting system can go a long way. Use something with an automatic bank feed/reconciliation like Xero or QuickBooks Online (with classification option). Both platforms also integrate with a host of other apps, like payroll, bill-pay, and employee expense reporting/approval. Be sure that each expense can be categorized to either program-related, management/general, or fundraising. Use your profit-and-loss report to benchmark those ratios against similar non-profits. The smaller the non-profit, the higher than program % of expense should be.
Also, each new vendor should be approved by two people. If you are involved in a non-profit and have questions about improving the safeguarding of your assets and the accuracy of your internal/external reporting, please contact me at (469) 320-1260 or email me at mark@mconnercpa.com.