Clubs and societies are essentially social, sporting or cultural organisations, whose members come to together for a common purpose and whose office holders are volunteers. Unless these organisations become very large, they generally have no paid staff and rely on the volunteer efforts of the members to raise money to fund the social, sporting or cultural purpose of the club.

The turnover of the club can vary from several thousand dollars a year to many hundreds of thousands.

However the main criteria when considering fraud in a club is that the team organising events and handling financial transactions is small. The checks and balances used in a larger organisation are simply not available to a club where there are volunteers and often where there are no business premises where work is done and records are kept. The main areas where fraud is most likely:

Most fraud is not particularly sophisticated. The fraud however usually relies on the fraudster being trusted by the club members and other people being kept away from cash handling and other bookkeeping processes. The fraudster is equally likely to be a recent or long standing member.

Theft of cash from sales

In most clubs either all or a significant amount of sales are in cash. Whether fund raising is several large occasions or from regular activities, the events often take place where there is no cash register or the use of the cash register is easily avoided. The normal controls over cash collections and banking are as follows:

The main risk with cash is that some or all of a day’s takings are not banked. Consideration should be given to accepting EFTPOS payments from customers, as these can now be done by mobile EFTPOS units.