The United Way

The United Way of America, based in Alexandria, Virginia, is a non-profit organization that works with more than 1,200 local United Way offices throughout the country in a coalition of charitable organizations to pool efforts in fundraising and support. The focus of United Way is identifying and resolving pressing community issues, as well as making measurable changes in the communities through partnerships with schools, government agencies, businesses, organized labor, financial institutions, community development corporations, voluntary and neighborhood associations, the faith community, and others. The issues United Way offices focus on are determined locally because of the diversity of the communities served. However, the main focus areas include education, income and health. A charity organization needs internal control to ensure that all the resources are properly utilized to achieve organization goals and varies projects. In order to reduce financial risk such as theft, internal control plays an important role. According to the case, the business process of nonprofit organizations is usually not well regulated. There is always room for errors in my opinion; a nonprofit organization can implement the following controls to ensure transparency and accountability in its operations. The staffs that take money out of the United Way of America have served in a position for both authorization and recording. In general, what they did was to write checks to themselves and then adjust the financial records. Segregation of duties is the economic and efficient way to against those types of fraud. No single individual should be allowed to both authorize and record. All transactions, especially financial transactions, have to be recorded properly with all the supplemental documents. Nonprofit organizations should not only record any changes to their business process but also document the reason behind those changes. Policy enforcement is needed for this not to happen