Successful Strategies for Improving Financial Accountability in a NonProfit Museum: A Case Study

Abstract

A lack of effective fund reconciliation strategies to improve financial accountability can negatively impact nonprofit (NP) organizations. Using a qualitative, single-case study, the financial management of a northeastern NP museum was explored to identify fraud prevention strategies. The study was needed based on known issues regarding fraud in NP organizations, and was grounded in Greenleaf’s servant leadership and Cressey’s fraud triangle theories. Four nonprofit financial managers of a large NP museum in the northeast United States were interviewed. Their management strategies and the organization’s procedural documentation were explored to answer one central research question: How do NP leaders improve financial accountability and maintain effectiveness in their museum? Using Yin’s 5-step thematic analysis process and NVivo’s powerful data analysis tools, four themes emerged regarding how successful NP financial managers avoid fraud. These themes included that successful NP financial managers (a) use a collaborative and growth-oriented approach, enhancing an ethical and trusting environment; (b) monitor financial transactions consistently and have established effective internal and external control systems in their departments and organizations; (c) communicate and enforce nonprofit and federal policies, procedures, and regulations; and (d) use training and development methods to equip and engage staff. A key recommendation was for NPO leaders to establish the implementation of high ethical values. The implications for positive social change included the potential for better fiscal management of donations and federal funds, resulting in improved educational and scientific programs.