Insight

Protecting youth sports leagues from fraud

Who would defraud a kids’ organization? The answer, unfortunately, is that trusted adults sometimes steal from not-for-profits benefiting children. Youth sports leagues and teams, for example, are ripe for fraud. Cash transactions are common, and coaches and board members usually are volunteers with little accountability.
If you or your children are involved in a youth sports league, here’s what you can do to ensure that its funds support the kids, not thieves.
Segregate duties
By far the most important step leagues can take is to segregate duties. This means that no single individual receives, records and deposits funds coming in, pays bills and reconciles bank statements.
So one person might handle deposits and payments, another would receive and reconcile bank statements and a third would monitor the budget. Also, every payment (or at least payments over a certain threshold) should be signed by two individuals. If your league has credit or debit cards, someone who isn’t an authorized card user should be assigned to review the statements.
Some simple steps
Other procedures can help prevent fraud. For example, if your league still uses paper registrations and accepts payment by cash or check, look into electronic payment options. Cash can be pocketed in the blink of an eye, and checks can be diverted to thieves’ own accounts. But with online registration, payments are deposited directly into the league’s account.
Also, monitor your league’s treasurer. People in this position are the most likely youth sports league officials to commit fraud because they have the easiest access to funds and the ability to cover their tracks. No one person should stay in the treasurer position for more than a couple of years. If funds are available, your league might consider hiring a part-time bookkeeper who will report directly to the board.
The treasurer should submit a report to the board of directors for every board meeting, with bank statements attached. And your board should receive and review financial reports at least quarterly — including when the league isn’t in season.
What fraud perpetrators hope
You may have a hard time believing that anyone in your community would steal from a youth organization. But that’s just what fraud perpetrators hope you’ll think. So put some basic fraud controls in place; then sit back and enjoy the game!
© 2019

Related Insights

Tax-wise ways to take cash from your corporation while avoiding dividend treatment | tax accountants in alexandria | Weyrich, Cronin & Sorra

Management Advisory Services & Business Consulting

Tax-wise ways to take cash from your corporation while avoiding dividend treatment

If you want to withdraw cash from your closely held corporation at a low tax cost, the easiest way is to distribute cash as a dividend. However,…
9 tax considerations if you’re starting a business as a sole proprietor | tax accountants in washington dc | Weyrich, Cronin & Sorra

Management Advisory Services & Business Consulting

9 tax considerations if you’re starting a business as a sole proprietor

When launching a small business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship,…
Plan now to reimburse staffers, board members and volunteers | tax preparation in elkton md | Weyrich, Cronin & Sorra

Tax Prep, Planning & Strategy

Plan now to reimburse staffers, board members and volunteers

Even if your not-for-profit organization rarely needs to reimburse staffers, board members or volunteers, reimbursement requests almost certainly…

Connect with us

Use the form below to send us an email. WCS responds directly to all inquiries and general questions within 24 hours of posting.

This contact form is deactivated because you refused to accept Google reCaptcha service which is necessary to validate any messages sent by the form.