Dive Brief:
- Higher ed had the fifth highest frequency of fraud based in a 2014 study of 23 types of organizations by the Association of Certified Fraud Examiners, and experts say college campuses operate with a trusting, collegial spirit that might hurt them.
- University Business reports that transactional analysis software that detects unusual patterns in financial transactions has long helped the corporate world, and internal financial controls are critical, including surprise audits, secure software, and separation of staff duties so the person depositing money, for example, isn’t also responsible for reconciling accounts.
- Making anti-fraud efforts highly visible on campus can act as a deterrent, and serious investigations of every case of suspected fraud also helps, perhaps using an outside forensics team to do the initial investigation.
Dive Insight:
Just in the last couple of years, there have been cases of fraud on college and university campuses that have uncovered embezzlement of hundreds of thousands of dollars. University Business reports an administrative assistant at Emory University collected more than $300,000 in tuition she directed to a private PayPal account. And an IT specialist at Lander University in South Carolina stole more than $400,000 in computer equipment and software that he then sold online for his own profit.
While many campuses appreciate the collegial atmosphere of a trusting nonprofit, putting security measures in place for times of trouble is critical. Even if the deterrence factor doesn’t prevent fraud, catching it can be its own form of deterrence for future employees.