Preventing Booster Club Fraud & Theft

by Jim Connelly, founder of BoosterSpark

Preventing fraud and theft in your booster club is essential to maintain trust, financial stability, and the club's reputation. Here are some steps you can take to help prevent fraud and theft:

1. Establish Strong Internal Controls:
   • Implement clear financial policies and procedures that outline how funds should be handled, recorded, and reported.
   • Segregate duties among multiple individuals to ensure that no single person has control over all financial aspects.
   • Require dual signatures for checks and approvals for financial transactions.
   • Regularly reconcile financial records and bank statements.
2. Transparent Financial Reporting:
   • Provide regular financial reports to members, parents, and stakeholders, so everyone can see how funds are being used.
   • Conduct financial audits or reviews annually or as needed by a qualified, independent auditor.
3. Robust Accounting System:
   • Use accounting software or tools specifically designed for nonprofit organizations to maintain accurate financial records.
   • Ensure all income and expenses are properly documented with receipts and invoices.
4. Secure Banking Practices:
   • Maintain a separate bank account exclusively for the booster club's funds.
   • Limit access to the bank account to authorized individuals.
   • Monitor account activity regularly for any irregularities.
5. Screen and Train Volunteers:
   • Screen volunteers who handle finances and perform background checks when appropriate.
   • Provide training on financial policies and procedures to all individuals involved with financial matters.
6. Require Receipts and Expense Approval:
   • Establish a policy that requires receipts and documentation for all expenses.
   • Implement a process for expense approval by multiple individuals.
7. Whistleblower Protection:
   • Encourage members and volunteers to report any suspected fraudulent activities or theft without fear of retaliation.
   • Establish a confidential reporting mechanism.
8. Annual Budgeting:
   • Develop and adhere to an annual budget that outlines expected income and expenses.
   • Compare actual financial results to the budget regularly to identify discrepancies.
9. Regular Board Oversight:
   • Have a dedicated finance or audit committee within the booster club's board of directors to provide oversight.
   • Hold regular board meetings to review financial reports and discuss any concerns.
10. Insurance Coverage:
    • Consider obtaining insurance coverage to protect against theft and fraud.
    • Review insurance policies to ensure they cover potential financial losses.
11. Legal Compliance:
    • Ensure that your booster club complies with all local, state, and federal laws and regulations related to nonprofit organizations and financial management.
12. Continuous Monitoring:
    • Regularly review and update your fraud prevention measures to adapt to changing circumstances and threats.

By implementing these preventive measures, you can significantly reduce the risk of fraud and theft in your booster club while promoting transparency and accountability among members and volunteers.