The internal audit function is vital to the health of any nonprofit, regardless of mission or scope. The audit committee and its individual members are crucial partners in safeguarding the integrity, purpose, and, ultimately, the success of organizations. They often face challenges navigating a strained regulatory environment, all while trying to do more with less.
Two leaders of BDO’s Nonprofit & Education Advisory Services practice, Ken Eye and Andrea Wilson, recently provided a list of “top 10 challenges keeping internal auditors up at night, and possible remedies to help continue the critical work.” The list and subsequent remedies was published in the Nonprofit Times.
The top 10 challenges include:
1. CHANGES TO OPERATIONS OR STRATEGY
2. ORGANIZATIONAL CULTURE
3. NEW TECHNOLOGY
4. CYBERSECURITY
5. COMPLIANCE WITH FUNDER REQUIREMENTS
6. FINANCIAL CONTROLS
7. RELIANCE ON THIRD PARTIES
8. PROCUREMENT PROCEDURES
9. TRANSPORTATION AND DISTRIBUTION
10. FRAUD AND CORRUPTION
The list includes many of the same risks and concerns that for-profit internal audit executives say they fret over and work overtime to address. A recent research report, conducted by the Chartered Institute of Internal Auditors and based on responses from more than 300 chief audit executives working at organizations across Europe, found that cybersecurity ranks as the biggest risk those companies face. The second most concerning risk, according to respondents, was compliance, followed by data security and human resources and people risk. 
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