We CPA's and Attorneys are always thinking about and focusing on the potential for financial frauds at your Club. During our annual financial audits and consulting engagements, we are generally not charged with finding frauds, but if a potential is identified, we will clearly bring it to Club Management's attention.
Supply Closets at Private Clubs can be very tempting to employees. Often these closets are not secure and there are some extremely valuable and useful products located there. Whether it is in the maintenance facility, kitchen, bar area or, office supply storage area, employees may be taking advantage of the Club Members. Does your Club take petty theft seriously? These small amounts can quickly add up to thousands of dollars in losses every month. Do your employees have a way to anonymously report when they witness someone that is not displaying or reflecting the values of your Club?
Below are a couple of the latest reports of financial frauds perpetrated against Clubs:
How Club Audit Committees Can Help Deter Fraud
(adapted from Journal of Accountancy, May 2016 article of the same name.)
For audit committees to do their pivotal role justice, Members need to embrace fraud deterrence by:
- Ensuring Club Management performs robust annual reviews of the Club's compliance programs and reporting systems.
- Requesting periodic updates on the external enforcement environment and the Club's fraud training and prevention program.
- Being familiar with the requirements for ethical conduct programs that comply with the laws such as the Dodd-Frank whistleblower rules.
- Understanding the nature and volume of allegations reported to the Club's whistleblower hotline.
- Requesting periodic updates from Management about reported allegations.
- Understanding the Club's response to whistleblower laws and whether additional measures should be taken.
Is your Club an annual subscriber to
Club Fraud Hotline, a toll free hotline that a
llows your employees and Members to anonymously report any of the 24 types of incidents (from theft and fraud to sexual harassment) the hotline covers? This an important tool for your whistleblower policy required of Not-For-Profit Clubs.
- NOTE: No calls have been received on the Club Fraud Hotline this past quarter. Either no frauds existed, nobody at the Club reported seeing anything unusual, or the Club Fraud Hotline's mere existence deterred employees from considering and/or committing a fraud.
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Interested in one of our products?
- Club Tax Book - Annual subscription based publication, updated quarterly, that addresses federal tax issues pertaining to Private Clubs.
- Club Sales & Use Tax Book - Florida - Annual subscription based publication, updated every December 31, that addresses Florida sales and use tax issues pertaining to Private Clubs.
- Club "It's All About Golf" Book - Musing of a tax guy with a passion for golf and ideas for growing your Club Membership.
- Club Litigation Book - Keeping Private Clubs out of court co-authored with attorney Michelle Tanzer.
- Club Fraud Hotline - Annual subscription based whistleblower hotline; keeping the employee or Member anonymous.
- Club Capital Planners - Asset replacement reserve studies conducted by our associate Paul Mueller.
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