Episode Transcript
[00:00:01] Speaker A: Hi, it's Steve Indigot, sport law. Leave me a message. I'll get back to you as soon as I can.
[00:00:07] Speaker B: Hey, Steve, it's Dina. You aren't going to believe what just came across my desk. We need to chat. Give me a call.
[00:00:24] Speaker A: Welcome to the latest episode of Sportopia. We're so excited to share our knowledge and have conversations about healthy human sport. Today's episode, we will be talking about understanding workplace fraud and steps you can take to protect your organization.
[00:00:40] Speaker B: We've got two team members with us today to share their experience and recommendations. So, Steve, and maybe before we get started, what's coming across your desk this week?
[00:00:51] Speaker A: You warned me I'm not allowed to talk about bylaws, so I'm not going to do that. But I am going to talk about a portion of bylaws being governance. I met with a client last week to talk about governance reform. I had several conversations with a lot of their board members who felt their governance model didn't work. So I went to meet with them, spent 2 hours with them, and realized that change for them is going to be very difficult, because in order to make that change, people have to be willing to give up power. And I'm not sure those people are interested in doing that, even though they probably recognize they don't have the time, the commitment, and maybe even the skill set or expertise to be a board member of this organization. So at the end of 2 hours, the CEO of the organization said, do you know what to do next? And I said, absolutely not. I don't. And we'll continue having conversations and education and seeking feedback from their members and their participants to see what would hopefully create a good governance model for them.
[00:01:57] Speaker B: I love. Well, you know, usually you say when you don't know what to do next, you're like, let's talk to Dina, because it's really interesting. I mean, you and I have been going back and forth on good governance, better governance, world leading governance, and what does any of that mean anyway? And so one of the things that's coming across my desk that I think nestles nicely with the dilemma, now that you're faced in this impasse, where do we go? How do we move forward? How do we shift people's energy so that they feel comfortable voting themselves off the island? And so what's coming across my desk this week is I'm preparing for a Nova workshop.
I'm heading to meet a client. And I'm so excited, Steve, because I've given a lot of this work to our other integral coaches, leadership coaches, and those in our shop that really enjoy doing the.
So I haven't actually been in the pool, if you will, with people talking shop about the nova and doing the workshop. So I'm very excited about reimmersing myself from a place of understanding our behaviors, our motivations.
How do we show up fully awake and aware as people? And then what are our pressure points? When do we stop listening? When do we start constricting? When do we start getting frustrated? So the Nova, now, I've done well over 600. And as you know, Steve, I'm part of the faculty now. I teach people how to actually be Nova certified. This work is transformational, and I've seen it as a parent, as a spouse, as someone who's brought in to help mitigate or eliminate or prevent conflict.
I'm hoping that maybe there's something from this that can be helpful to people, especially if they're struggling with.
So thanks for asking, Steve. I'm delighted, actually, to invite Robin Whitty and Kathy hare to our conversation.
Know, malpractice, really, about people intentionally setting out to cause harm. And the harm really isn't just about the bottom line, the financial and the impact, reputational impact on the organization. The fraudulent activity can feel like a violation to the soul. So, really delighted to have the two of you join us here today. And before we do, maybe I'll turn to you, Kathy, you can introduce yourself and maybe share what's coming across your desk, and then we'll turn it over to Robin before we dive into all things fraudulent activity.
[00:04:48] Speaker C: Thanks, Dina.
Yeah, really happy to be here. As Dina said, my name is Kathy Hare. I joined sport law.
Geez, I think I'm getting on to ten years. Can't believe it's that long.
[00:05:02] Speaker B: Yeah. You're going to get the pin.
[00:05:03] Speaker C: Oh, do I get the pin? I thought it was a belt buckle, but there.
[00:05:07] Speaker B: Steve, we've got to go get pin.
[00:05:10] Speaker A: The belt buckle has been highly requested and something we have looked into.
[00:05:15] Speaker C: So, yeah, in that time, I've touched on a number of different areas, from governance to strategic planning, now a large part of focus on financial management. So working with a number of nsos around their regular financial management, from budgeting to sport Canada submissions, et cetera, et cetera.
Yeah.
[00:05:43] Speaker D: Having fun.
[00:05:44] Speaker C: So, in keeping with sort of the governance topic, one of the things that's come across my desk this week is I got an email from an individual who didn't specify what club or organization they're from, wanting to talk to me about some support for their annual meeting and some challenges on their board. But the first line of the email was, but I need to make sure there's not a conflict of interest first before we talk.
Which sort of gave me pause, and I thought, well, I don't know what club you're on, so how could I know that there's a conflict of interest? But it does bring up a bigger item for us, which is we have a lot of people within our shop now and a lot of people touching similar, the same clients. And so we regularly have conversations around our internal conflict of interest potential because of the relationships that we have with our clients.
[00:06:41] Speaker D: So we'll see where it goes.
[00:06:43] Speaker C: Talking to them on Thursday. So I have no idea what to expect on this one.
[00:06:48] Speaker B: That's really funny. So I want to know if you have a conflict of interest and then silence. Okay, so you're going to have to help me out here, bud.
What organization or sports, so we can actually verify. And I think what's really interesting, Kathy, because Steve and I, as we've been traveling across the country on the hope tour, this topic of conflict of interest keeps coming up. And what people need to understand, because people tend to get really offended if you call them out or what they feel is being called out. And instead, what we often share with people is sport, especially at the community level, you're going to be conflicted because typically it's where your kids are. Right. But if we can learn how to manage the conflict of interest, like, what are the measures I can take to reduce conflict of interest? And then how do I manage it? And then importantly, how do I communicate this so that people who are looking at the decisions are feeling confident that the organization is being stewarded or directed in a way that's appropriate legally. Sound, right. And in alignment with value. So it's a fun little story, and I think we have to do a lot of work to socialize people about. It's okay, you're likely going to be in conflict at some point, but let's learn how to manage this, right?
[00:08:08] Speaker C: Absolutely.
[00:08:09] Speaker B: Yeah. What about you, Robin? So great to see you this way.
[00:08:13] Speaker D: Yeah. Little different, isn't it? So, in terms of what's coming across my desk, not dissimilar to Kathy, I've been helping one organization that's sort of overcoming a really negative AGM. And then the other thing that I've been involved in quite a lot lately is recruiting. And I think the one directly leads to the know there's a lot of churn in the environment because of what's going on. So that's mostly what I've been dealing with lately, recruitment.
[00:08:38] Speaker A: Robin, tell everybody a little bit more about yourself. How'd you get here? Where'd you come from?
[00:08:43] Speaker D: Well, I started my career in government, and I was there about ten years or so before making the leap over to the sports sector, and I was an executive director at the provincial level, and then I was a director at the Canadian Sport Institute. And in between there, I did a little stint for sport law. And so when, after I finished my career at the Canadian Sport Institute, I dipped my toe for a minute or two in social services and then came back to sport law. I guess I've been here almost three years now.
[00:09:14] Speaker A: What I love, Rob, is you're one of those roles in sport law that we didn't have for a big portion of the existence of sport law. Now that you're here, of course, we don't know how we would do it without you and the things that you do in the background so publicly. Thank you to both you and Kathy for what you do for sport law and our clients.
[00:09:37] Speaker B: Yeah, I love that, Steve. It's like, when was Robin not here? We can't even trace it back because it kind of sort of feels.
Well, you were here way back, and then you left your mark. So delighted that the two of you are here. And. And, Steve, we do have to figure out, are we giving people a pen or a tuke or a belt buckle?
[00:10:02] Speaker A: Oh, after ten years, yeah, we have.
[00:10:05] Speaker C: A few people now, April 2024.
[00:10:09] Speaker A: Just to let us know.
[00:10:11] Speaker C: Just to let you know.
[00:10:13] Speaker B: Okay, amazing. So, Steve, take it away. I know you've got some questions for Kathy.
[00:10:18] Speaker A: Well, maybe I'll start with you. Kathy.
And I know Robin and I have shared a lot of cases as well together in the financial fraudulent oversight aspects, but why do you think financial literacy is so important, and how does the lack thereof possibly lead to fraudulent activities?
[00:10:37] Speaker C: Well, first and foremost, I mean, at the board level, board members have a fiduciary responsibility to the organization. And what that means is that making the comment that, well, I don't understand financial statements is not an okay comment. To make, you need to understand financial statements, you need to have at least some comprehension of what does a balance sheet mean, what does an income statement mean? And you need to be ensuring that as a board member, you're receiving these documents on a regular basis. And one of the first flags for me would be that the financial statements are not being prepared and they're not being given to the board on a regular basis. Now, depending on how often your board meets, this could be quarterly, this could be monthly. But at a minimum, board members should be receiving these on a quarterly basis and reviewing them and asking questions about them to ensure that they understand what the numbers mean. The second piece then would relate to ensuring that a budget is prepared and a budget is followed. One of the fastest ways to see if things are going off the rails is if there's issues with actuals versus budget, and if there's not a valid explanation for some of these things, then that would first and foremost warrant a deeper dive into what are the financial practices of the organization. So there's a whole list of things that go along with financial literacy and at a senior executive level. So at an executive director or a CEO, they need to be financially literate. They don't necessarily need to be doing the financial management, but again, they need to understand what the financial statements mean and be asking questions to the various budget managers on what's this mean? Where's this coming from? That type of thing. So, yeah, it's not okay in this day and age to say, well, I don't know what these statements mean.
[00:12:51] Speaker A: I was going to ask you, Kathy, about some questions that organizations or directors might want to be asking, but I think you answered that. Rob, anything you want to add to what Kathy just alluded to with respect to the importance of financial literature, to be financially literate and then maybe some signs of fraudulent activities.
[00:13:12] Speaker B: Right.
[00:13:12] Speaker D: Well, to Kathy's point about the fiduciary duty, you're responsible for, in most cases government funding for membership money, in some cases donors or sponsorship money, you have a responsibility to make sure that funding is being used as it's intended. So it's important to see those signs. And as Kathy said, when you don't see those controls, a simple thing like a budget or understanding financial statements, fraud goes on. I think there's a tendency to think, well, we have an audit, we have an annual financial audit, so surely the auditors will pick that up. Sure. But according to the association of the certified Fraud Examiners, the average monthly loss is about $8,300. I don't know a lot of nsos or psos that can afford $8,300 a month. So if you're waiting for the annual audit, you've already lost several thousand dollars. So you need those key things in place. And in terms of signs, if we're jumping over to there, what I've seen in my personal experience, professional experience, is that they go a long time without creating those statements. Or they happen to be on vacation when the board meeting is happening, then there's a summer break, and then there may be some other excuse. In pretty much all of the cases that I experienced in my working life, there weren't regular financial statements. The first alarm signal and the second piece was that there was one person responsible for the finances, so they were responsible for doing the deposits. So then there was skimming. Money was disappearing before it even made the bank. There were fraudulent checks, so nobody was checking the signatures, and the statements were going to the same person who prepared. So these aren't sophisticated thefts. We're not talking about some grand scheme for the most part. I mean, that may occur where they're doing false invoices or have some, you know, invoicing your organization. But for the most part, I see Kathy nodding her head. They're straightforward. Skimming fraudulent checks, not depositing funds where there should be. There was no grand scheme because the organization just made it so simple, the checks and balances weren't in place.
[00:15:25] Speaker B: Yeah, I guess it's good to know that there's no ocean eleven here going on in the canadian port system. And yet it's really helpful. I read some of the blogs that we're going to link in our show notes for today. And going back to Rachel's really great blog on the triangle, the fraud triangle, where people internal to the organization, normally they're going to look internally to defraud, to steal from the organization if there's some form of pressure. Right. Either. And we list things like accumulation of debt and or divorce. So it's really helpful to be mindful of that. The second is the opportunity. Does that person have the means to be able to not only commit the fraud, but then conceal it? So an added risk management measure is to ensure that when you do your risk check, are we ensuring higher measures of controls for the people who have not only the opportunity, but the means, right. To conceal. And then the third is the rationalization. And I think as a coach, this is where I think we can't underestimate the sorrow, the shock that can happen. Because if these people are internal to the organization and they've been there a long time, chances are what might have started as a little itty bitty.
I'm just going to do it once, then becomes a habit. And so it could be years right before people are found out. And that can disenfranchise the lowering of trust, the shock and awe. It's almost as if it's a death. Right? Because the person then the legal authorities come in, and I've worked with a client in the restoration, reparation after that, and the culture takes a hit. And I'm not sure a lot of people talk about that. So wanted to add that as, by way of background, and would love to invite the two of you to talk about some classic examples of fraud, things that maybe that you've seen either a profile of a fraudster and or maybe a case study that would be helpful for our listeners to learn from.
[00:17:40] Speaker D: Yeah, well, in terms of a profile, I would just ask everybody listening to take 1 minute to think of. Who do you think of? What picture comes to mind when you're thinking of someone that will commit fraud? Is it male or female? Is it young or old? Is it a volunteer or employee? Is it a new hire? Is it someone who's been there a long time?
Who do you picture?
And I would just say the answer is yes to all of them. Right. It is new hires. It is long term employees, it is volunteers, it is senior management. It is well educated. There's no single profile. And that's why you have to have good fences, make good neighbors. You cannot rely on trust. Because I think, dina, you and I have talked to the same client who had fraud committed by a long term, dear employee, most liked, most diligent. And this happens over and over again because someone will make. In this case, it was an employee. In other cases, it's a volunteer. Someone may recommend, oh, I know them, and they have a bit of a financial background, or they run their own business. Oh, great. Dina knows them. Let's have them come in to do our books. And because they were, one, referred by somebody and two, trusted, they were given free rein. And I've seen that multiple times. And that it's a long term employee. And the damage is greater when it's a long term employee because they have greater access. Usually frontline employees wouldn't have such access to checkbooks and bank deposits and funding. Right. But long term employees do. Senior managers do. And that's why the level of fraud, the damage is greater both to your point, Dina, personally and professionally for your peers, but to the organization financially, because they have access to greater amounts of funds.
It's shocking when it happens. It's devastating because your coworkers or your supervisor put trust in you. And I think it's underreported. We saw that Jamie Strashon had that article out a couple of years ago, talking about, I think, $8 million over the last ten years. And I would say that's a fraction because it's underreported. Because as we mentioned earlier, you're talking about government funding. Nobody wants to go publicly and say we weren't watching properly and we've had thousands of dollars stolen and probably half of it was government funding. Nobody wants to advertise that. So it's underreported and people are not charged. So that's the other thing. When you're thinking about who steals or do they have a criminal background. I'll do a background check. Most aren't charged because most organizations don't come forward. But I can tell you when I've shared in the past, when it's happened to organizations that I've worked for and I confide in peers, everybody's going, oh, yeah, that happened to us over and over. So it's just kind of like the silent crime and the person gets fired, but often not charged. And I don't know if that's your experience, too, Kathy.
[00:20:36] Speaker B: Yeah. It feels like another form of maltreatment, right, where you talked about the blind trust that we give to people. And if in giving people blind trust the way we do, for instance, pilots, right. They've kind of earned our trust. They've got the stripes on their shoulders. So the checks and balances are there. But then we have, in the aviation industry, there are all these additional checks and balances. Like the pilot has someone in the cockpit with them, like they're verified and they're reviewed, and they've got all of these measures in place to ensure their personal accountability so that trust doesn't feel blind trust, it actually feels earned trust and super important because the cost is exponential and can severely hinder not only that organization, but the rippling out when we don't speak up. The silent crimes, as you said, robin, it can create such a residual impression in the culture where everybody's a know on pins and needles. And so it's really important for us as a sector to get our house in order, is what I'm hearing you speak to. And I'm wondering, cassie, what are your impressions?
[00:21:47] Speaker C: Well, I think we need to expand our definition of fraud. Yes, there's financial fraud, but there's also misuse of assets. And those could be physical assets. They also could be human resources. So asking paid employees to do work for your private company that you've got on the side while they're being paid by this organization, it impacts the organization. It reduces the capacity of this person. And for me, those kinds of frauds or misuse of assets really are even more insidious than the actual money out of the bank account kind of thing because they're not seen. It's harder to do a check and balance on something like that. So just having that conversation around, what are other kinds of misappropriations that could be going on? On the financial side, there are some, I'm going to say, fairly easy to implement checks and balances that you can do. The first and foremost one is everything is electronic banking with more than one approver. The way of the check is going the way of the dodo bird. I mean, how many checks have you written in the last month? Zero, probably, right. How much cash do you actually use anymore? Not a whole lot. Everything is credit, debit, online, e transfers, et cetera. And with the banking system now, it is really easy to set up electronic banking that have multiple authorizations required in order for any funds to go out by EFT, by e transfer, by wire, et cetera. So for me, first and foremost, that's the biggest one, reducing the acceptance of cash. I know with smaller clubs and such, when they have events and this type of thing, they, they may still be using cash, which is the weakest link in the whole thing, because like Robin said, well, we got $150 at the front door for registration fees, but, oops, only $100 made it into the bank account. Everybody's using square now.
Again, there's all kinds of different ways where you can have things directly deposited into the bank account. And while we recognize that smaller organizations, there's a limited capacity to be able to delegate because you just don't have the bodies. But to the extent possible, delegating authority, delegating responsibility for key aspects of the accounting process. So it's not, like Robin said, the same person that does every segment of the accounting cycle. There's other people that are involved. So if you get the bank statement and you do the bankweck, somebody else has to sign off on it. So there's more than one set of eyes that are looking at things. So just some thoughts from some simple ways that organizations of any size can start to protect themselves.
[00:24:59] Speaker A: I like that, Kathy. And as you and Robin are speaking, I am thinking about some of the cases that I've been involved with over the last number of years where we see the use of a check stamp, and we had an executive director cutting checks to himself using the president's stamp. We've had organizations where their structure was complicated. They had, we'll call it a head not for profit. Then they had subsidiaries and they were transferring money in between those two, not for profits, and money wouldn't make it from one to the other. And that ended up being hundreds of thousands of dollars. And actually, the individual stealing ended up in prison in that particular case. So there's definitely a lot of examples out there. Why are nonprofits so susceptible? What can we do to help them prevent this? What do they need to do? I know you've talked a lot about some options about moving to electronic banking, but also what I liked about what both of you are saying is starting to ask questions, and it's not necessarily about does the bank statement align with the audit or, sorry, with the budget? And are we on pace? But what about asking questions about the board dinner? That was $3,000. That probably could have been 1000, or depending on the number of people there, or the amount of travel that we're paying or how we're paying for it, or are we room sharing or are we in the penthouse? So I do like extending it beyond just are we on budget?
[00:26:30] Speaker C: Absolutely.
[00:26:31] Speaker D: That's what I was going to add, that board members and board chairs can't underestimate the power of the message from the top. And that message is, we won't tolerate that here. Or that message is, things are loosey goosey here. Like you said, we go out for dinner, and yes, there's alcohol on tab, so it's against the policy or whatever. Don't underestimate the message from the top. When I was talking to Kathy beforehand, I gave this example when I was younger in university and working for provincial parks. The head of the finance department for the Ministry of Natural Resources would dress in civilian clothes and drive out to the provincial park and demand a spot audit. So if you were a gatekeeper at a provincial park where I was, you'd see this little car pull up a civilian car, and this woman was six and a half feet tall, so you knew who she was right away and walk over it, and you knew you were going to get a spot audit right then and there. I mean, you wouldn't even think about committing fraud in that environment. Right. And that was the message from the top. She was the senior financial persons, and she took the time to drive out and do spot audits. This was the type of environment that I experienced in government. And so when that's the tone, I mean, that's the tone from the top. That was the senior manager. It's very powerful. So, yes, there are rules that the chair must have financial literacy.
There should be rules in place or policies in place about who gets the bank statements and who approves things. But just the environment that you create is really important as well, that you set the tone for bigger organization, that you could have a whistleblower in larger organizations that uncovers a lot of fraud around people being inappropriate with expense claims, looking for things like the one that you and I experienced, Steve, the person had no receipts and a lot of zero number expenses. Right. When I went in to help, the first expense claim that I picked up was $900 with no receipt. I probably didn't have $900 worth of expenses the entire time I was there. So there's red flags like that. And are people that are in roles that hold financial roles. Do they get a vacation? Who looks at the books when they're on vacation? I've seen that uncover a lot as well. And one example, again with a volunteer doing the books, and I was meant to take it over as the office administrator, rather. And he was really reluctant to give me the books. And my younger self, I thought, wow, he takes his job so seriously, and I admired him for that. Well, he took it seriously because he was writing checks to himself and he didn't want anybody to find out. So what kind know are you spelling people off on vacation and seeing what's going on while they're away? Are other examples that you can check to see if fraud is going on.
[00:29:11] Speaker A: I met a young lawyer, Rob, recently, and they want to get involved in sport, and I recommended that they get involved on a board. Go volunteer on a board, get some experience as a board member, learn about the organization, the club. And they did find one. And the first thing that the director asked for was the bylaws and the articles and a copy of the financial statements, and they didn't come. So he called me and he said, I'm on this board and I've asked for this information. I want to make sure everything's going well and they're not providing it to me. And my recommendation to this individual very quickly was, get out of there.
[00:29:49] Speaker B: Exactly. Run away.
[00:29:51] Speaker A: Run away. You're a young lawyer and you don't need to be part of a board that you've tried to do the right thing and tried to be a fiduciary, but you weren't being supported by the balance of the board, and he resigned.
Kathy, I'm sure you have several stories you want to share.
[00:30:08] Speaker C: There's a fine line between fulfilling your responsibility as a board member and micromanaging, and seen that many times where there becomes pushback. So a board member is asking for financial information, but perhaps going a little too far down into the weeds and there's pushback from staff. So there does need to be a fine. There is a balance between the two. But for a staff person or whoever is responsible for doing the books, not providing financial information to the board, that's big red flag. Big red flag. And one of the instances that I found, I don't think it had anything to do with fraud, but it was simply the lack of financial literacy on the board didn't catch the fact that the statements didn't balance. And I went, your statements don't balance. I said, this is a first flag for me, like, who's doing your books? That the statements don't even balance. So there's all kinds of different flags or indicators or whatever of not necessarily even fraud, but just poor financial management. And that in and of itself can cost the organization if you don't know where your funds are going. And are they, as Steve was saying and Robin was know, inflated expense claims and policies are great, but they're not worth the paper they're printed on or the disk space they're taking up if they're not enforced. And Robin's comment about creating a culture that starts from the top around requiring strong financial management will go a long way, whether you have the policies or not.
[00:32:00] Speaker B: Yeah, I really appreciate that.
I think we're seeing the same thing around our commitment to maltreatment, to prevent maltreatment and wanting to create safer environments that beyond having policies, we need to ensure that we've got procedures in place and that those procedures are influencing the programs. Right. So that the people. It's all these p's, eh, Steve, that we've talked about, that the people know exactly. They have clarity on what isn't and isn't acceptable, and they have a sense of shared understanding and the procedures to follow. Right. And then we have policies in place to deal with people when they're putting their hands in the cookie jar, when they shouldn't be doing. Right. So, any last minute tips as we wind down our time together with the two of you? Any last minute tips that you want to share to help prevent fraudulent activities and or financial misappropriation?
[00:32:59] Speaker C: I think through this podcast, I know that we've talked about some fairly simple ways. For me, it's maximizing the use of technology that everybody has access to. Now, while I talked about online banking or moving completely to electronic banking, no more checks. The other thing is that many of the accounting software that we now use provides access for read only so somebody can just go in and look, they can't do anything, they can't change anything. But having that other set of eyes where if the CEO or the executive director who's not directly involved in the financial side of things should have access to the accounting data so that they can go in and look, that could be one of the ways that acts as a detriment when you know that there's somebody else that can go in and take a look at what you're posting and how you're posting it. And is the backup there. So, yeah, just maximizing the use of technology.
[00:33:59] Speaker B: Okay, fantastic. What about you, Steve? And then we'll complete with Robin. Any other suggestions from the lawyer to help prevent people behaving badly?
[00:34:09] Speaker A: Yeah, I agree with Kathy. It's really just about consistency. And I use this a lot when I talk about working with boards or again, from a governance structure. People with skill set and expertise, particularly on the financial side, would be a benefit, but a benefit, but also start having standing item agendas on your board meetings, financial review, reconciliation review, budget review. And as Kathy and Robin have alluded to, ask questions, and I always refer to my friend Al. It was his 85th birthday, I think, yesterday. And thank God for Al. He reminds us to always ask why and what and how, and then when he gets his answer, he moves on. And those people, sometimes we are too cautious or hesitant to ask those questions. So I just say ask.
[00:34:57] Speaker B: I love that Steve. And in governance speak, we would say it's really important to have no's in but hands out. Right until you really got to start to dig in there. But the invitation to ask those questions so important from a fiduciary perspective, and executive leadership needs to be accountable to that as well. Final word before we wind down the conversation, Robin goes to you.
[00:35:19] Speaker D: Yes, well, I would say do not rely on trust.
Trust is not a measure that we would recommend. And that that's the tone you set with know good fences, make good neighbors. This is how we operate here. That message from the top. And to Kathy's point, the second thing I would say is segregation of duties. And what we hear a lot in smaller organizations is how do we do that? How do we make different people responsible for different pieces of the financial journey when I've only got two or three people? And to Kathy's point, get on electronic banking and have someone else look at your statements. Like I said, most of the time these aren't sophisticated thefts. And if someone was on the ball, someone else who isn't responsible for creating the financial statements, was actually looking at the bank statements to see the transactions. That only takes one other person. So those are kind of simple measures because they're simple fraud. So it's a simple measure to see what's going on. Do you know that you just had a tournament and usually you get registrations and there should be a bump up of cash being deposited? And did someone see that that happened? It's a simple measure. These aren't really difficult measures to implement to prevent fraud from happening in your organization.
[00:36:35] Speaker B: Yeah, Robin, I'm not a math girl, but I started thinking $8,000 a month times twelve times 34,000 sport organizations, that's a whack of money that we could be using towards greater good, right. In terms of the power of sport. So thank you to the two of you. I just love learning, and I've learned a couple of things. The first is, what is our minimal financial requirements that we must have in place to even meet our responsibility as a not for profit? So really elevating that and may not have the budget to do a big massive audit, but at least have some auditing principles in place, as we've talked about here. The second, and this could be its own podcast, but personal integrity to ensure that. I always liked this idea that what's the right thing to do? The right thing to do is the same right thing to do whether or not people are looking. So ensuring that people. You're encouraging personal integrity in even small things like honor areas. Per diems. So Steve and I had this conversation when our clients give us lunch or we eat dinner on the plane, we're not charging our clients for a per diem when know service, that benefit is already being offered. So the personal integrity starts with, am I operating in alignment with my personal values? And can that be codified and made clear by the organization? Right. And we can give examples like the one we just shared. And then I would say the final thing is education, which is why we launched Sportopia and why the two of you are joining us here today. And in governance essentials, we talk a little bit about the importance of financial literacy. We don't take as deep a dive on fraud, and that to me, is such an important. So what if we don't get our financial health in order, we're going to be at risk of fraud. So with everything that we've covered today, hopefully people walk away wanting to learn a little bit more. In the show notes, we're going to have additional details on blogs that we've written and some go back 1314 years. Right. So, hopefully, thank you to all of our listeners, and we're really grateful to share our vision of sport Topia with you and as we all look to elevate sport. And a special thank you to you, Kathy and Robin, for joining us here today. Over to you, Steve.
[00:39:01] Speaker A: Yes, thank you, Kathy and Robin. That was great. Really just love bantering and sharing valuable information. As always, to have your say in Sportopia, email us at hello at Sportlaw, CA, or on social media at Sportlaw, CA to let us know what you want to hear about next. Please stay tuned for our next episode. And again, thank you, Robin, Kathy, and to you, Dina, as well, for hopefully another great episode.
