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Let\u2019s say that one of your not-for-profit\u2019s employees makes significant personal purchases on a credit card you\u2019ve provided for work-related expenses. You may think the outcome is relatively straightforward: The individual is fired and referred to law enforcement for prosecution, and you recover the\u00a0funds.<\/p>\n
Unfortunately, obtaining a criminal conviction may be difficult. Plus, you might not want the negative publicity. Your credit card issuer is unlikely to credit you for the unauthorized charges unless you can prove the card was actually stolen, and your insurance may or may not cover the loss. The best way to prevent this situation is to craft and enforce a clearly worded credit card\u00a0policy.<\/p>\n
Who needs a card?<\/strong><\/p>\n Your policy should start with who is authorized to have or use a card. Nonprofits commonly issue cards to their executive directors, program directors and office managers. Before issuing one to an employee \u2014 or temporarily handing one to other staffers \u2014 consider whether that person really needs\u00a0it.<\/p>\n Most people can pay out of pocket and submit reimbursement requests. However, if employees travel or entertain donors regularly on your nonprofit\u2019s behalf, giving them cards may make\u00a0sense.<\/p>\n Rules for use<\/strong><\/p>\n It\u2019s also important to clearly communicate the rules for credit card use. Explicitly state in writing that cardholders can\u2019t use the card for personal expenses, and list other prohibited uses such as cash advances, electronic cash transfers and charges over a specified amount.<\/p>\n State that reimbursement for returns of goods or services must be credited directly to the card account. Employees should never accept cash or refunds directly.<\/p>\n Supervisor and staffer responsibilities<\/strong><\/p>\n Manager involvement is essential to helping prevent credit card abuse. Require employees to seek preapproval for any credit card charge and provide documentation, such as itemized receipts, to their authorizing supervisor for review. State that unauthorized purchases (and any related late fees and interest) will become the employee\u2019s responsibility.<\/p>\n Supervisors need to indicate their approval of the charges by a signature and date on the receipts or a standardized expense form. Your accounting department should reconcile monthly credit card statements, and an executive or board member should review the statements.<\/p>\n Employers often terminate and sometimes pursue criminal prosecution against staffers who misuse credit cards. Make sure your policies are clear and that every employee understands the potential repercussions. At the same time, let employees know they should talk to you if they\u2019re in financial\u00a0straits.<\/p>\n Resist your initial impulse<\/strong><\/p>\n If a staffer makes an unauthorized charge to your organization\u2019s credit card, your first impulse may be to deduct the amount from that person\u2019s paycheck. But be careful: Federal and state labor and wage laws generally prohibit making such deductions. Instead, ask the employee to repay the amount, arranging for a repayment plan if necessary. Discuss such actions, and other potential responses, with legal counsel and financial advisors.<\/p>\n \u00a9 2024<\/em><\/p>\n <\/body> Let\u2019s say that one of your not-for-profit\u2019s employees makes significant personal purchases on a credit card you\u2019ve provided for work-related expenses. You may think the outcome is relatively straightforward: The individual is fired and referred to law enforcement for prosecution, and you recover the\u00a0funds. Unfortunately, obtaining a criminal conviction may be difficult. Plus, you might […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,10,15],"tags":[8,11,12],"class_list":["post-17038","post","type-post","status-publish","format-standard","hentry","category-articles","category-news","category-not-for-profit","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17038","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=17038"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17038\/revisions"}],"predecessor-version":[{"id":17039,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17038\/revisions\/17039"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=17038"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=17038"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=17038"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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