Eyeglasses for the Poor’s Internal Controls
It is mandatory for every serious organization to have internal control policies and procedures written down to safeguard the organizations interest. Internal controls are well-stated financial management practices which organizations use to prevent misuse and misappropriation of its assets which may occur through theft or embezzlement. Eyeglasses for the poor should put in place a policy that requires more than one person to sign for the receivables from the donors; this will make it very difficult to steal from the organization because if a loss occurs then the signatories will be held accountable. It is also essential to conduct fixed asset inventory annually so as to reconcile the assets on the ground and those in the books which is a good way to keep track of the inventory moving in and those moving out (Finkler et al., 2013).
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Management should encourage reporting of any suspected wrongdoing by ensuring that they protect whistleblowers by bringing in legal counsel from outside the organization. There are other employees who will not feel comfortable doing so if they feel that their job will be at risk so it’s the duty of the management to put an anonymous report system to encourage that. A compliance program is another way to prevent theft and embezzlement, having a code of ethics governing the organization and communicate the same to the employees. Having an idea of what is allowed and what is not allowed is a good start for employee’s discipline. Detecting fraud is not an easy task and often entails bringing in experts to do a forensic audit on a regular basis to identify loop holes that might be used to embezzle the organization’s funds (Finkler et al., 2013). The auditors will also educate both the employees and the management on the best internal control methods. However there are still instances when theft and embezzlement might occur but the above methods will greatly reduce the chances of them happening.
Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.