Sounding the alarm: Occurrences of fraud in nonprofit community sport organizations

Abstract

This study examines the prevalence of fraud occurrences in community sport organizations (CSOs) and compares the organizational characteristics of CSOs that have and have not experienced fraud. The empirical analysis relies on online survey data gathered in Canada, the United States, Australia, and Germany (n = 1256). Respondents were asked if organizational fraud had occurred in their CSO in the last ten years. In the full sample, 12.2% of organizations had experienced some type of fraud. The results showed occurrences of fraud were significantly higher among organizations that support the local community, have a high annual budget, possess grant income, and perform large and complex financial transactions and among those who lacked policies for handling assets and cash. In contrast, occurrences of fraud were significantly lower in organizations with a relatively small annual budget, a plan for the education and professional development of board members, and at least two individuals handling cash or checks. The analyses of geographic subsamples not only partially echoes the results for the full sample, but also shows further significant differences. The findings reveal that fraud occurrence across subsamples does not follow a clear pattern, demonstrating that prevention measures should be tailored based on geographic and organizational context.