How Nonprofit Fraud Really Happens and What Boards Can Do to Stop It

Fraud does not just happen in big corporations. It happens in nonprofits too, often quietly and over time. In this episode, CPA and nonprofit practice leader Brian Carter joins the show to explain how fraud and abuse actually occur inside nonprofit organizations. Using real examples from a major health foundation and a local Little League, Brian breaks down why audits do not always catch fraud, how weak internal controls create opportunity, and what board members should realistically be doing to protect the mission and the money. If you serve on a nonprofit board or work closely with one, this conversation offers practical guidance on governance, fiduciary responsibility, and how to spot problems before they spiral.

Timestamps:

(00:00) Introducing Brian Carter, CPA, Nonprofit Practice Leader & Partner, Mauldin & Jenkins

(02:00) How can a board mitigate fraud? Jackson Health Foundation Fraud case

(03:00) What financial controls should be in place?

(06:35) Controls with electronic signatures

(11:05) Should this have been caught?

(13:15) Why would an audit not find this?

(16:00) Sarasota Little League scenario

(22:00) How do you ensure continuity of controls for a high turnover organization?

(25:40) Final advice

(26:55) Recapping with Read

Join us every other week as we release a new podcast with information about how you can be the best board member and provide great service to your organization.

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