Alleged Embezzlement Sets Off Review of Financial Procedures

February 7, 2012 Posted by The Law Firm for Non-Profits, P.C. in Accountability, Board, Director Duties, News

How closely does your nonprofit’s board supervise financial transactions?

Last week, a woman who handled financial transactions for the Roman Catholic Archdiocese of New York was charged with embezzling more than $1 million over 7 years. She allegedly issued hundreds of checks in small amounts to her son under the guise of paying bills to legitimate vendors. Would your nonprofit have caught it?

The embezzlement has set off an additional review of financial procedures and oversight at the archdiocese. Although no disciplinary action is being considered against any of the archdiocese’s superiors at this time, it’s a good reminder that your organization needs to have reasonable and prudent procedures in place to provide appropriate financial oversight.

Talk to your legal and accounting advisors about whether your organization needs more than just the minimum and mandatory financial reviews. Remember, each director owes fiduciary duties to the organization that go beyond attendance at board meetings.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506


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