Net Assets Magazine | John Buckley, CPA, Partner, advises national, NBOA-member private schools to evaluate the intrinsic risks embedded in the potential rewards of technologies.
From online tuition systems to point-of-sale credit card readers, established and emerging financial technologies foster greater efficiency for independent schools, along with superior convenience for vendors, parents, students and supporters. At the same time, they open up easier and faster ways to commit fraud and can offer false reassurance when it comes to safeguarding a school’s financial assets, ultimately undermining diligence and vigilance.
The true impact of fraud can be disastrous and far-reaching, including financial loss, diminished productivity, legal problems and tarnished reputations. Independent schools’ communities of lenders, donors, board members and parents expect high ethical behavior and effective internal controls. In fact, technology often presents an enormous dilemma, in that efficiency and effectiveness can be competing imperatives affecting internal controls.
Schools large and small must evaluate the intrinsic risks embedded in the potential rewards of technologies. Every school must find the right balance between its tolerance for risk and its ability to allocate sufficient resources to achieve internal controls.
Here’s a look at a few common technologies, their potential for fraud and the kinds of controls and practices that can mitigate or neutralize these risks (some of which your bank may already require).
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Reprinted with permission. This article appeared in the March/April 2016 issue of Net Assets Magazine, a publication of the National Business Officers Association (NBOA).