Fraud risk is nothing new to tribal governments, but in these challenging economic times, the risk of fraud has increased. Tribal government fraud is a significant issue that affects both tribes and their members. Like all organizations, tribal governments must be prepared to manage these risks and their potential impact.
First, let’s look at some of the facts surrounding fraud. According to the Association of Certified Fraud Examiners’ (ACFE) 2014 Report to the Nations on Occupational Fraud and Abuse:
• A typical organization loses 5 percent of its revenue each year to fraud.
• Fraud among governmental entities accounted for 10.3 percent of all fraud—the second-highest rate for all industries.
• The median loss caused by misappropriation-of-assets fraud is $130,000.
• The typical amount of time between the onset of a fraud and its detection is 18 months.
• Organizations with a fraud hotline were able to detect fraud 50 percent faster than those without.
• Only 3 percent of fraud instances are detected by an organization’s annual audit, making this among the least effective antifraud controls.
In a recent case of fraud perpetrated against a large tribe, the opportunity for fraud was present—and it allegedly allowed the executive director of construction to lead an effort to defraud the tribe of $7 million. This tribe’s lax tone at the top and its lack of effective internal controls and proper procedures cost the organization dearly, and not only in money. But the story doesn’t need to end this way. Preventative measures can save your tribe time, money, and heartache.
Let’s look at the top five tips that can help your tribal government in the prevention and detection of fraud.
STRONG TONE AT THE TOP
Intolerance of fraud by your governing body is a strong deterrent. Elected officials must be required to hold themselves to the highest standards of ethics and integrity—which should be outlined in a clear code of conduct—and deal with fraudsters swiftly and fairly. When the governing body walks the talk, so to speak, those who might consider committing fraud will think long and hard about the consequences of their actions. Conversely, without a strong tone at the top, individuals may feel they have nothing to lose by trying to defraud the tribe.
EFFECTIVE INTERNAL CONTROLS AND POLICIES
Prevention is the most effective fraud-fighting measure. Approach it proactively, starting with a fraud risk assessment, which can then be used to implement control activities that mitigate any risks it identifies. Both preventive and detective controls should be implemented, especially in any area that’s been identified as posing a higher risk of fraudulent activity. Antifraud controls include a large range of activities, including:
• Multiple levels of approvals
• An audit committee composed of council members and others but not the CFO or others in executive management
• Job rotation or mandatory vacations
• Timely account reconciliations (at least monthly)
• Segregation of duties
• Physical security of assets
• Background investigations on prospective employees
• Antifraud training
• An effective, well-trained internal audit function
The ACFE offers a free fraud-prevention check-up test on its Web site to help entities test their fraud health and identify major control gaps. Taking this test can help you address issues before it’s too late.
Safety is the main reason why some people invest in commercial property since it's the main interest of many. Based on recent reviews, commercial property will still perform for you even if the economy slows down, unlike in residential property. And when the economy is strong, commercial property increases its value and gives you a stable income.
But if you're still in doubt or just planning to start out in this venture, Bacall Development explains the benefits you can gain from investing in commercial property through the following paragraphs to help you make up your mind. The firm is a full-service commercial real estate company that has been involved in this field for decades.
Strong returns are not a surprise to some when it comes to commercial property. You can gain both income and capital growth in a commercial property since it provides strong and reliable returns. However, making a quick gain shouldn't be your only objective because this endeavor requires great effort and patience. You should take advantage of a growing investment over time where you can get a return consistently above inflation.
Aside from higher returns, commercial property is oftentimes more secure - a crucial point to others that can result in a steady income. Leasing commercial real estate usually ranges from three to ten years as opposed to short-term leases of residential properties.
Because of the mentioned benefits above, reviews state that the risk is lesser if you invest in commercial property than in residential property or the stock market. This data is based on overall analysis of both properties.
According to Bacall Development and its associates, commercial property can catch the attention of different sectors in the economy. Because of the dependence of retail property on consumer spending trends, it has the highest direct relationship to the economy, along with industrial properties. Office buildings are most likely to perform depending on long-term supply and demand. Exposure to various sectors can deliver great benefits to you and to avoid fraud as well.
Acquiring tax benefits is imaginable with a commercial property. Most commercial properties attract handy building allowances as well as depreciation allowances on plant equipment within the building.
Protection against inflation is also one of the benefits of investing in commercial property. Reviews reveal that commercial property has been considered as a good protection against inflation over the years. It has a good record of outpacing inflation over a long period of time.
Investment control? Yes, it's possible. You have a significant level of control over your investment in case you're an owner of a direct property. You have control on various areas such as change of use for the property, disposal, redevelopment, renovations, the terms of the lease, the type of tenant, and upgrading.
Furthermore, you have the ability to add value in a commercial property investment through improvement of the appearance, renovation, lease restructure, subdivision or enlargement, and upgrade. You can further leverage your commercial investments as you improve the property and it grows in value. By borrowing more against your improved equity, you can quickly be in a position to control a sizeable portfolio of properties.
However, Bacall Development needs you to know that there are still disadvantages in owning commercial properties. What are mentioned above could be the total opposite to others based on their individual experience. The firm suggests that you must choose the right commercial property to have a strong capital growth and gain a great rental return. You must know what makes a good commercial property.
Data protection is a growing concern for many businesses and if this is something you have not given much thought to, it may cause you some issues in the future. Most businesses will hold personal data on people, whether they are employees, customers or clients and so you must ensure that your business complies with the Data Protection Act 1988.
The Data Protection Act does exactly what it says it does, it protects personal data. As a business, there are two ways in which you will use and keep personal data. One is as a data controller and the other is as a data processor.
To ensure that your business is protected you need to be clear whether you are a data controller or a data processor. You are a data controller if you keep data about living people within your business, whether they are clients or customers. The only exception to this. This is where you hold and use personal information, but another company is responsible for what happens to it, for example if you provide payroll or HR services for another company. This makes you a data processor. Although a company may be a data processor when providing payroll services for others, they will be a data processor for their own staff and also for their own clients too.
A data controller has a legal responsibility to ensure that the data they hold is protected and there are eight principles under the Data Protection Act, which must be followed in order to meet this legal responsibility.
These eight principles are:
1. you must obtain the data fairly and process it fairly too
2. you must only keep it for one or more specified purposes
3. you must only process it in ways and for the purpose for which it was provided
4. you must keep it secure and safe
5. keep it up to date and accurate
6. you must make sure it is relevant and not excessive
7. you should not keep it for longer than you need it
8. you must provide a copy of all data held if someone requests it
If your business does not follow these eight rules, then you will be in breach of the Data Protection Act. The Data Protection Commissioner offers clear guidance on how this legislation applies to your business and even breaks down the act into sections, such as marketing data, employee data, education or school data and medical data. It is important to look at these areas in relation to your business as there may be differences.
You may also be required to register with the Data Protection Commissioner. This depends on the type of business you are running. You should check whether you need to register. Data protection is a serious issue in business and you should ensure that you and your business are protected.