Tips on how to help prepare for and protect your organization from fraud. Here are five takeaways for your local government:
1. Maintain and update your policies and procedures and make sure they are being reviewed.
Consistent and accurate policies and procedures may save you time and can assist in potentially reducing the fraud risk associated with errors and dishonesty. Be sure to incorporate processes that identify potential risks and provide a way for employees to report potential fraud or error, including a way for employees to report their concerns anonymously.
2. Use a checks and balances system for processes, particularly processes that are at risk of fraud.
Additional security measures can be taken by having more than one person handling money, transactions, and/or banking changes. At North Carolina CLASS, we recommend the following to our Participants:
- Each entity has more than one authorized signer on an account(s).
- Multiple people receive statements and transaction confirmations.
3. Be aware of email spam, phishing scams, and malware.
Make sure your employees receive regular training on the ways to help identify suspicious emails. If something feels wrong, double check with others, including coworkers and vendors, to evaluate whether it is a scam.
4. Each employee should have their own login information. Do not allow employees to share passwords.
When login credentials are shared, it may be difficult to track individual actions and record a clear audit trail. Consider only providing logins or other authorizations to those employees who require them. When possible, using activity logs can aid in monitoring potential inappropriate or unauthorized access. For North Carolina CLASS Participants, the online transaction portal offers multifactor authentication. If a login were to fall into the wrong hands, an added security measure is taken through a code sent via email or text.
5. Use technology to your advantage whenever possible.
It may help to distance your organization from the use of checks. Using positive pay is an option that does not allow for one check to be cashed more than once. Avoiding sending checks via the mail can also assist in risk reduction. Using direct deposit or a similar option may provide a safer means of transacting.
While no organization will ever be completely risk free, taking precautions and preparing your employees can help reduce the opportunity for potential fraud.
The information presented should not be used in making any investment decisions and is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration and involvement with an experienced professional engaged for the specific purpose. All comments and discussion presented are purely based on opinion and assumptions, not fact, and these assumptions may or may not be correct based on foreseen and unforeseen events. North Carolina CLASS is not a bank. An investment in North Carolina CLASS is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the North Carolina CLASS prime-style fund seeks to preserve the value of your investment at $1.00 per share, North Carolina CLASS cannot guarantee it will do so. Past performance is no guarantee of future results. Any financial and/or investment decision may incur losses.