CFO Studio Magazine - CFO Innovation Award Winners

40 WWW.CFOSTUDIO.COM 2nd QUARTER 2015 I f you loved The Untouchables , you’re in the right profession: Ultimately, it is members of the C-suite who are responsible for protecting their organization from both internal and external corporate crime. The “CFO” is the Chief Fraud Obstructer. The challenge is that fraud gets a foothold in a company much lower down the organizational ladder. “It can start small, with an accounting estimate, then get bigger with a revenue recognition issue,” says TimAnglim, founder and president of YesCFO, who moderated a CFO Innovation Panel, “Crime Doesn’t Pay!” A veteran of more than two decades in the trenches of investigating organizational malfeasance, Anglim explains that the primary way fraud gets caught is through a tip from an outsider or an employee. The second most common way is internal control, when an auditor spots something off. For these reasons, he urges any organizations that have not already done so to set up a hotline that allows for anonymous tips from employees as well as vendors and customers. “It tells your people that the executive suite and the board are serious about preventing fraud at any level of the company,” says Anglim. But he adds that these reports must be consistently reviewed by an independent point-person in the company to ensure that reports of fraud occurring lower in the organization reach the top. “Track and measure —metrics matter here.” C Not-for-Profits Must and Can Make Money R obert Barry, CFO of Community FoodBank of New Jersey, is surprised how often others, even finance executives, misunderstand his work. “With not-for-profits, there is a connotation that it’s not about making money,” he says. “But you have to run a not-for-profit as a for-profit.” Whether the task is requesting grants or forecasting expenses, a not- for-profit, like its for-profit cousin, must work to reduce costs and bolster revenues. “You have to get the biggest bang for your buck,” says Barry. So study your data. The FoodBank might pull 7 million pounds of food in its retail store pickup program, with 20 percent being discarded as waste, and spending $800,000 on expenses. “We would break that down to say ‘it is costing 17 cents per pound of food — is this worth the expense?’” says Barry. Barry, who has worked in the nonprofit sector since 1986, acknowledges that there are some challenges that are particular to nonprofits. For example, salaries and benefits tend to make up around 70 percent of the budget, and donations make up for about 80 percent of organizational revenue, so external circumstances can have a big impact. Close to the end of the fiscal year ( June 30), Barry creates what he calls an “A” and “B” list of cuts that can be made if revenue fails tomeet the organization’s targets by Dec. 31. Why so early? “That way it’s done in an objective fashion when not under duress.” C “YOU HAVE TO GET THE BIGGEST BANG FOR YOUR BUCK” Spotting Corporate Crime KNOWLEDGE TRANSFER KEY TOPICS FROM THE CFO INNOVATION CONFERENCE & AWARDS