By Kelvin Tambulukani
Did you know that ZGF has a Whistle-blower Policy to protect persons who report suspected fraud? Email [email protected] to anonymously report suspected fraud concerning ZGF activities.
4
The “F” word every organisation should flee from
FRAUD is one cancer which when it rears its ugly face in an organisation, the ramifications are far reaching as they go beyond the perpetrators to the rest of the staff, and all the way to the families represented. Donors will withdraw funding from the organisation, causing the organisation to most likely lay off staff due to the loss of funding, and the staff will not be able to support their families due to loss of income. All this will be as a result of one or two selfish employees who involve themselves in fraud. Like one single matchstick which is capable of burning down to ashes an entire forest, a single staff involved in fraud can bring down an entire organisation. The individuals involved in fraud are usually fully aware of the wrong things they are doing and might even go unnoticed for a very long time.
So what is fraud? An academic definition is that ‘fraud is an illegal act characterised by deceit, concealment or violation of trust.’ This illegal act can be perpetrated by one individual, a group of individuals or even by organisations (a) to obtain money, property or services (b) to avoid payment or loss of services or (c) to secure personal or business advantage.
Signs could be there that fraud might be happening in an organisation but for one reason or another it is either ignored, overlooked or the perpetrator is simply the last person anyone can suspect. Hence it goes on. Here are a few fraud indicators which should not be ignored. When you see these signs open your eyes as an organisation and look closer.
- Employee lifestyle changes: expensive cars, jewelry, homes, clothes
-Significant personal debt and credit problems
-High employee turnover, especially in those areas which are more vulnerable to fraud like finance and procurement.
-Refusal to take vacation or sick leave
-Lack of segregation of duties
-Original supporting documents for transactions or activities are not available
-Photocopies are used to support transactions.
Fraud is intentional and not accidental and those involved are selfish individuals who are only concerned about enriching themselves at the expense of other innocent staff and ultimately the beneficiaries in the community for whom those funds are intended. Prevention is better than cure. Fraud can be prevented by strengthening internal controls within the organisation. Early detection of fraud can also help save the organisation from expensive investigations, legal costs, reputational damage or loss of funding from donors.
Any organisation can fall victim to fraud. Bad elements commit fraud while good people who see the bad choose to keep quiet thereby allowing the vice to continue. Report suspected fraud whenever it is observed to maintain the integrity of your organisation and its work.