Monthly Archives

January 2017

How Severe Weather Relates to Fraud

By | Accounting, Fraud, Nonprofit | No Comments

Severe weather alerts are loud, obnoxious and clearly intended to get our attention. They come in the form of ear-piercing beeps on the TV screen interrupting regular programming to display radars and “watch” and “warning” areas where people need to remain alert. Or, even scarier, they’re blaring beeps on the radio that overtake the station telling us to take shelter. These alerts serve a purpose, and for years they triggered my wildest fear.

Suppose as a child you hated “bad” weather; didn’t like dark clouds, heavy winds, or the clap of thunder, and hid under your covers until the storms passed. As an adult,, when you  had lived through enough crazy weather, you realized you could listen to warnings and take action to keep yourself and others safe in the event of an approaching severe storm.

How helpful would it be to have these types of alerts for the real life “bad” – might I say “severe” – things that happen in our workplaces? For example, the perfect storm for fraud (pretty much the worst of the “bad” things that can happen) may very possibly be brewing right this minute in our workplaces. Just imagine if a jarring bell sounded when there was some warning sign that a volunteer was feeling mounting financial pressures at home, or a fictitious vendor was making her way through your financial system, or a hacker was perusing your donor data.

We don’t have these audible warnings. Instead we, as employees, managers, and board members, often find out too late, when the money or information is already gone, or when we’re left trying to make sense of how someone we trusted perpetrated fraud.

The “ASAP” Call

As a consultant, I oftentimes get calls from board members who says they need help ASAP,:i.e.,, “We found out something unbelievably bad happened, here’s what we’ve done so far,, so, now, what should we do?”

These calls are hard to receive, and even harder to make for those dedicated employees serving mission-driven nonprofit organizations. The management team or board members are giving their time, talent, and treasures to organizations with a mission, about which they’re passionate. They have trust in their co-workers and vendors and don’t want to believe, or even plan for, bad things happening. And, fraud – an intentional diversion of funds from the mission, perpetrated by someone inside or outside the organization – is oftentimes the furthest thing from their mind. So, when fraud strikes, panic often ensues.

How to Prepare

The only way to respond efficiently  to something unexpected is to institute prevention measures to avoid these pitfalls and be prepared with a plan of action, which you formulated in advance, rather than reacting emotionally to an emergency situation. I’ve narrowed down the top three things I think we can learn from those weather alerts when it comes to fraud preparedness:

  • Fraud Awareness is key. Just like meteorologists look at models, forecasts, and radars, nonprofit management and board members should always have their radars up and remain alert. It is essential to understand the pressures, incentives, and opportunities real-life humans face that might lead them to do things you’d never think they could do. And, you can’t raise awareness without open lines of communication.
  • Fraud is not a forbidden four letter word. What I mean here, is talk about fraud. Use the word in meetings, talk about how it’s showing up in the news, and how others are dealing with it. Make it part of your organization’s dialogue. We might not want to talk about hurricanes, tornadoes, or flash floods, but they are real and by talking about fraud and how to prepare and plan for survival, everyone knows the organization is on the alert for fraud, the fear of talking about fraud is reduced and the power of a well-laid plan takes over.
  • Create and practice a fraud drill. If we know and practice tornado drills, why wouldn’t we have a plan in place that we practiced in the event of fraud? Crisis management, including disaster recovery, should encompass who, what, when, where, and how to deal with this situation. Create a plan, share your plan, and even practice it to create comfort in the process and find ways to improve it.

We all will continue to wish for blue skies and sunny days, just like we hope that fraud doesn’t hit us and our organization. But, the reality is that none of us have that control. So, instead, I strongly encourage you to act by raising your own awareness, opening dialogue, and creating and practicing what you’d do if fraud ever struck your organization.

At Welter Consulting we are committed to finding you the most affordable technology, the most powerful solution, and providing expert support. Welter Consulting partners with each nonprofit and is committed to providing solutions that preserve time and resources, by leveraging technology and superior reporting that allows organizations to focus on impacting their communities. We e passionate professionals who choose to work in the nonprofit sector for the same reason you do – helping others. Please give us a call at (206) 605-3113.


Getting Your Staff Ready for the Annual Audit

By | Accounting, Audit, CPA, Nonprofit | No Comments

As the manager of a nonprofit organization, you’re probably all-too familiar with the paperwork aspect of the annual nonprofit audit. Documents must be managed, maintained, and updated, and everything prepared for the auditors.

There’s a second part of managing the audit process that’s equally as important: managing the people who are part of the audit. To help you with this aspect of auditing, we’ve put together the following tips.


  • Make sure you schedule the audit well in advance of any deadlines. Be sure to set aside enough time for your staff so that they can be available to assist the auditors in any way necessary.
  • Contact the auditing firm and confirm that the dates for the audit are available. Auditors’ schedules may be booked months in advance. Be sure to confirm again the week prior to the scheduled audit to ensure nothing has slipped through the cracks.
  • When scheduling your audit, offer three days and times that work for all. Allow the auditors to choose the one that works best for them.
  • Clear calendars to make sure no offsite or other meetings will interfere with the audit schedule.


  • Provide a clean, private, well-lit workspace for the auditors to use while they are at your company.
  • Create the necessary computer and WIFI access in advance so it is ready for the auditors immediately.
  • Ensure that a telephone line is also available for the auditors.
  • If parking spaces are reserved at your building, make sure you take the necessary steps to secure parking spots for the auditors.
  • Provide them with directions on how to get to your building.


  • Inform the internal staff that an audit is taking place. Reassure them that it is both a necessary and beneficial aspect of nonprofit management – it’s not like a personal IRS audit, but more of a consultation to ensure that your nonprofit is operating correctly.
  • Make sure that staff understands they can’t use conference rooms or other workspaces that the auditors are using during the week.
  • Ask staff not to interrupt the auditors while they are working.

Following Up on the Audit

Once the audit is over, it will take your firm several weeks to prepare the materials and provide them to you. Take time to review them and discuss the findings with the auditors. The final report can then be presented to your Board of Directors.

As a final step, share the audit with your entire team. Although not required as part of a nonprofit audit, the more information that you can share with your staff, the better they will understand what’s going on within the organization as a whole. They’ll feel invested in the outcomes and better informed about the financial aspects of the organization. The more information they have, the better they can do their jobs.

Preparing for an audit can be stressful, but if you’re organized and take the appropriate steps, you can ensure that the entire audit process from start to finish goes smoothly. Both your auditors and your Board will thank you for the extra effort made to ensure a streamlined process.

Welter Consulting offers auditing as one of our core services for nonprofits. Our experience encompasses audits, consulting, software selection and more for the nonprofit industry. Please contact Welter Consulting at 206-605-3113 for an appointment.

What CPAs Can Learn from the Government’s 10-K

By | CPA, Government, Nonprofit | No Comments

Business entities must provide 10-Ks to their shareholders to report income and losses. Why not the federal government? The government does indeed provide an annual 10K to their shareholders – we, the people of the United States, whose taxes fund the government. The annual 10K of the United States is called the Financial Report of the United States, and while it’s a lengthy tome, it’s filled with useful information.

The primary focus of the report is on the government’s spending patterns for the year, but it also provides insights about trends that potentially affect the nation’s future. CPAs play an important role in establishing the policies of their companies, as well as within their communities. Understanding the trends and other information from the federal government can help you predict and respond to potential trends to protect the best interests of your clients and others.

The report contains findings from 150 departments within the Federal government, excluding the Federal Reserve System, which produces reports separately. The U.S. Government Office of Accountability and the Treasury typically release their findings within five months of the conclusion and release of this report.

Within the report, CPAs can find typical accrual-based reporting of financial statements with supporting information as well as nontraditional sustainability financial statement. Traditional accrual reports will seem familiar to most accountants since this is the typical reporting style used by companies. The outlier is the nontraditional reports, which is a unique feature of the federal government’s reporting system. These reports contain information, projections, and a discussion of the program in question.

Balance sheets, financial statements, total spending, and other documents will be very familiar to accountants and easy to understand. Learning the specific language of unique federal documents can be time-consuming, but the government produces an eight-page Citizens Guide along with the document that includes highlights in layman’s language. Although your specialized knowledge and training will help you decipher the 200+ reports in the document, the Citizen’s Guide may come in handy.

Another publication that you may find useful is called What’s at Stake? The CPA Profession on Fiscal Responsibility. This publication also includes information on how the federal document impacts CPAs.

So what might a CPA glean from these lengthy documents? Look for the following information to help you in your quest to manage your organization’s finances:

  • Spending trends, either up or down, in departments that impact your organization directly or peripherally.
  • Historic and current spending, and how it may affect the overall economy. An economic slowdown will impact your business in one way, improved productivity in another. Trend graphs make this section easy to understand.
  • How federal spending may impact the unique industry that your business or organization works in.

CPAs can be the translator for complex federal language to help those within their organizations understand the big picture of national finance. With so much taxpayer money at stake, it pays to be cognizant of federal spending and its impact upon your industry.

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. Your accounting software is an important component of the changeover from the older 1993 regulations to the new rollout. We can help you with the change and more.

Please contact Welter Consulting at 206-605-3113.

Creating an Ethical Framework for Data Usage

By | Data, Nonprofit | No Comments

As with many new and evolving technologies, regulation lags behind innovation in the collection, use, and storage of data. With so many businesses today collecting customer data, guidelines that fame how data can be used and shared are a necessity. Without them, companies can make mistakes in how data is stored, used and shared, costly mistakes that can wreak havoc with customer information and goodwill. Developing an ethical framework to guide decisions involving data is a ‘must’ for today’s business

Five Questions to Ask to Build Your Ethical Guidelines

Although many industries have governing bodies that guide them in how they use data, others do not. For those that lack such guidance, developing your own rubric is essential. The Journal of Accountancy suggests six questions, which we’ve distilled down to the five most pertinent ones for businesses. Asking and thoughtfully answering these questions can help you develop your own ethical guidelines for your company’s data policies.

  1. Do you have a privacy policy in place? Clearly defined privacy policies written in plain language can help your users understand which data is collected, how it is used, and how they may opt out of data collection. You can develop your own privacy policies modeled on companies within a similar industry or use privacy policy generators You may wish to have your lawyer or corporate counsel review them, too.
  2. Do you assess and understand the risks of data collection? Not every piece of data is useful or relevant to your company’s mission, vision or goals. Understanding why you want to collect data and the risks of collecting specific data is important.
  3. What safeguards are in place to minimize data risks? With any data collection comes risks of data breaches. What safeguards are you willing to put into place to minimize risks? What security measures do you have now to keep customer data from falling into the wrong hands? Make a list of the methods you are using to keep data safe. You may wish to share this list with an internet security expert to see how well you are using all the tools available to you to minimize risk.
  4. What due diligence do you use if sharing data? If you share data with third party companies, what due diligence methods and systems do you use to safeguard your data? For example, do you send your company’s email list to a vendor to send newsletters out? If so, what checks and safeguards do you have in place with your vendor to ensure the list is kept safe?
  5. Why do you collect data in the first place? Understanding your company’s rationale for collecting and using third-party data is truly the most important point. Companies sometimes fall into the trap of collecting data simply because it might prove useful someday. Even if you aren’t currently using the data that you’ve collected, you still must keep it safe.

Website Security Tips

With the growing awareness of hacking and data theft, it’s important for companies to take added precautions with data sent over their websites. Not only is it important for keeping your customer data secure, it can also prevent infection from spreading through your website and wreaking havoc with site visitors’ computers

  • Keep your computer systems up to date. Download critical updates, patches, and repairs. Software vendors are constantly updating their code to prevent problems. Outdated software is an open invitation for hackers.
  • Add SSL or security certificates to your site.
  • Avoid allowing customers to upload files to your site.
  • Change passwords frequently and use strong passwords with upper and lower case, symbols, and numbers. Don’t use personally identifiable information in your password.

The business world is constantly using and harnessing data. The more data you collect, the more important it is to keep data secure. With these questions, you can build your own guidelines for the ethical storage and use of data within your company.

If you need assistance with data usage or policies Welter Consulting can help. We bridge people and technology together for effective solutions for nonprofit organizations. Your accounting software is an important component of the changeover from the older 1993 regulations to the new rollout. We can help you with the change and more.

Please contact Welter Consulting at 206-605-3113.