In the following video excerpt from the 2023 BMWL National Nonprofit Conference, senior members of the BMWL Audit & Assurance Services team, Mike Lee, Danny Johnson, Dale Houser, and Steve Cardwell, provide an Internal Control Update. During this Internal Control Update, a lot of ground is covered. For those of you who are audit clients of our firm, some of this material may be familiar as it closely aligns with the topics we discuss during a financial statement audit. The discussion also includes some new material.

There is one topic in particular that we’d like to call your attention to from this video.  Fraudsters have gotten very good at using emails and other methods to deceive employees of organizations and cause them to improperly change the electronic payment account information for vendors, employees, or grant recipients.  The deceived employees then send money from their organizations, intended for a legitimate vendor, employee, or grant recipient, to an account controlled by the fraudsters.

An example might be when a fraudster sends your accounts payable clerk an email that looks very much like it came from your construction contractor.  The fraudster, pretending to be your construction contractor, tells your accounts payable clerk that the construction company has changed banks and that all future electronic construction draw payments should go to a new bank account.  The fraudster provides the "new" payment account information.  Your accounts payable clerk makes that change, and your next construction draw payment goes to the fraudster instead of to your contractor.

This is an example of a very real thing happening more and more.  Given the increasing frequency and effectiveness of this criminal activity, we thought long and hard about how we can help nonprofits avoid being deceived in this way.  We decided to create a jingle to help you and your colleagues remember this very important rule…Anytime anyone asks you to make a change to the electronic payment account for any vendor, any employee, any grant recipient, or anyone else that your organization sends money to, remember these words:

Change to a pay account, verify!

You may click here to download the audio file of this jingle, and we expect that you will play it, if not once, at least twice a day for all of your finance and accounting team members so that it is indelibly implanted at the forefront of their minds!

You can also access the supplemental material that accompanies the following Internal Control Update video by clicking here.