Why Nonprofit Fraud Goes Undetected and How Boards Can Stop It

Nonprofit fraud is an issue that leaders cannot afford to ignore, even though it is often uncomfortable to discuss. In this episode, Michael speaks with Jeff Limbocker, a longtime healthcare CFO and current COO of Sarasota Memorial Health Care System, about how fraud actually occurs in nonprofit organizations and what can be done to reduce the risk. Drawing on decades of experience, Jeff explains why fraud often begins small, why expense reporting is a common vulnerability, and why auditors do not typically uncover these issues. This conversation offers practical insights for nonprofit board members, executives, and finance leaders who want to strengthen oversight, protect donor trust, and build more effective internal controls. Timestamps: (00:00) Introducing Jeff Limbocker, COO of Sarasota Memorial Health Care System (02:00) Observations of fraud as a COO (03:15) How does fraud start and happen? (08:20) Lack of controls or subverting controls? (09:30) Why don’t auditors find fraud? (12:05) How does the board provide oversight of the CEO/Executive Director? (15:10) Role of the board in smaller organizations (17:20) Preventing fraud in cash-strong organizations (19:00) Shouldn’t fraud be caught sooner? (23:30) Advice for board members (25:15) Red flags to look out for (27:44) Recapping with Read Join us every other week as we release a new podcast with information about how you can be the best board member and provide great service to your organization. Listen to the podcast on any of the following platforms: YouTube Apple Podcasts Spotify Podcasts Amazon iHeartRadio Visit us at: www.thecorleycompany.com/podcast