Whistleblower Policy for Your Non-Profit Organization

According to the Association of Certified Fraud Examiners’ (ACFE) 2012 Report to the Nations, only 3% of fraud is detected during an independent audit. This same report found that 34% of workplace fraud is exposed by tips from employees, directors, members and volunteers.

These statistics emphasize the importance of having a formal policy that encourages people in or around the organization to report their concerns without fear of retaliation. This formal policy is referred to as a ‘whistleblower’ policy. Below are several items to consider in the adoption of a whistleblower policy for your non-profit organization.

- Have a policy that clearly communicates that retaliation taken against a whistleblower is not acceptable. The policy should include actions that will be taken in case of retaliatory action against a whistleblower, including termination of the offending employee.

- A whistle-blower policy should designate responsible individuals within the organization to receive and respond to tips. Response to fraud tips should involve both members of management and the governing body.

- The investigation should ensure the fair treatment and anonymity of the whistleblower during the investigation. If necessary, hire an external investigator such as a Certified Fraud Examiner or any other resource deemed necessary to conduct a full and complete investigation of the allegations.

- If a fraud tip is verified via an investigation, the organization should take timely action. Put the responsible individual(s) on leave or terminate them, based on consultation with your attorney. File a report with the local law enforcement agency. Inform oversight agencies for funding sources affected by the fraud.

- A whistleblower policy should require that tips are made in good faith and have reasonable grounds for the accusation. The act of making allegations that prove to be unsubstantiated or are made maliciously should result in disciplinary action up to and including termination of employment.

- While the employee manual is an appropriate method to communicate the policy to employees, ensure other stakeholders are made aware of the policy as well.

- Employees and volunteers are more likely to report a concern in a timely manner if it is easy to report. Organizations can create an anonymous submission form on their website or outsource a hotline service.

Firm Profile:  Hinkle + Landers, CPAs is one of Albuquerque New Mexico’s leading accounting firms.  Hinkle + Landers, CPAs has been operating for over 40 years in Albuquerque as well as all parts of New Mexico.  Hinkle + Landers, CPAs also provides audit, fraud and forensic accounting services as well as tax preparation, bookkeeping and elder care in Albuquerque, New Mexico.

Hinkle + Landers, PC, one of the leading Albuquerque CPAs and accounting firms, stays up-to-date on news that has an impact the accounting industry and our community.  The previous is a blog by Maclen Enriquez, an Audit Manager of Hinkle + Landers, PC on things for non-profit accountants or non-profit organizations to consider when compiling a whistle blower policy.