Charity Governance

ACORN: “THIS IS ANOTHER FINE MESS YOU’VE GOTTEN US INTO, OLLIE”

DATELINE: November 16, 2008, Chicago

Last week, the Catholic Campaign for Human Development (CCHD), the national anti-poverty program of the U.S. Conference of Catholic Bishops, cut off its funding for ACORN, the controversial organization that was in the news during this just-completed election season because of allegations over voter registration fraud.  According to a November 13, 2008 press release CCHD cut off funding because of a major case of embezzlement which “raised serious concerns over ACORN’s financial accountability, transparency, governance, and organizational integrity.”  The press release then indicates that the allegations over voter registration fraud intensified CCHD’s concerns over ACORN's activities.  CCHD therefore extended its funding cut-off to any ACORN organizations.  We are not sure what the second cut-off adds to the first.  Maybe the first cut-off was similar to...

HERE WE GO AGAIN: BUSINESS MANAGER CHARGED WITH STEALING $259,000 FROM CHURCH

DATELINE: March 27, 2008, Chicago

Hey, why worry about financial controls? They cost money, they add administrative burden, and you like spending time on mission rather than accounting. The reason can be found in Flossmor, Illinois, a suburb of Chicago. Yesterday, Eric Herman of the Chicago Sun-Times reported that Beverly Houston had been arrested and charged with stealing over...

INSIDE THE CRIMINAL MIND: THE EQUIVALENT OF A LIFE SENTENCE FOR THE FORMER HEAD OF PHILADELPHIA’S SOUTH SEAPORT MUSEUM

DATELINE: November 27, 2007, Chicago

We reported earlier this year on the shenanigans at Philadelphia’s South Seaport Museum.  In a nutshell, its former president, John S. Carter, stole at least $1.5 million in museum money to finance his lifestyle.  Unlike many other judges who excuse thefts from nonprofits by insiders, U.S. District Judge R. Barclay Surrick threw the book at Carter, sentencing the 57-year old to ...

LET US BE THE JUDGE: MORE TRANSPARENCY NEEDED FROM THE MILWAUKEE PUBLIC MUSEUM

DATELINE: November 12, 2007

Last Friday, Milwaukee Journal-Sentinel reporter Steve Schultze reported that Milwaukee Public Museum officials claim that the financial crisis that two years ago brought the once venerable and respected museum to its knees is over. Museum Officials Say Is Over, Nov. 9, 2007. Wasn't it...

BETTER PROCUREMENT PROCEDURES MIGHT HAVE PREVENTED ALLEGED THEFT AT QUEEN’S MEDICAL CENTER

DATELINE: October 23, 2007, Chicago

Jim Dooley of the Honolulu Advertiser reported last week on an interesting fraud allegedly perpetrated by an employee against The Queen's Medical Center. Fraud at Hawaii Hospital Alleged, Oct. 17, 2007. As is all too typical, we aren't talking about nickels and dimes here unless you think...

NETWORK FOR GOOD V. UNITED WAY OF THE BAY AREA: A CASE THAT HOLDS MANY LESSONS FOR CHARITIES AND THEIR BOARDS

DATELINE: October 22, 2007, Chicago

Last Friday (Oct. 19, 2007), the Superior Court for the County of San Francisco issued its tentative findings of fact and conclusions of law in Network for Good v. United Way of the Bay Area. Coming in at 87 pages, the opinion is not only too long, but it is treacherous going, relying on highly technical interpretations of accounting entries and presentations. It would be easy to dismiss this opinion as involving a unique set of facts that are unlikely to repeat themselves. That would be...

TEN FINANCIAL CONTROLS THAT EVERY CHARITY SHOULD PUT IN PLACE

DATELINE: October 16, 2007, Chicago

Yesterday our very own Jack Siegel gave the keynote address at the public session of the National Association of Attorneys General/ National Association of State Charity Officials conference. Jack concluded his remarks by making several observations about financial controls and audits. A number of attendees asked Jack if he might be willing to publish his top ten list. Here it is:

Control 1—Dual Signature. Checking and investment accounts...

THAT RECENT UNPLEASANTNESS: MYTHS PERPETUATED BY THE LUCILE PACKARD FOUNDATION FOR CHILDREN’S HEALTH

DATELINE: October 9, 2007, Chicago

We saw an article several weeks ago reporting that the Lucile Packard Foundation for Children's Health was the victim of a $350,000 employee theft. We wondered whether there was a major internal control failure, and then we moved on. Then we read a fuller account by Andrew Valencia in the Stanford Daily. Worker Steals Funds from Kids Charity, Oct. 2, 2007. Valencia reports that the foundation...

ONCE AGAIN, A MILWAUKEE CHARITY HAS OVERSIGHT AND CONTROL ISSUES: ALLEGED $300,000 THEFT AT SECOND HARVEST

Dateline, April 27, 2007, Chicago

Derrick Nunnally and Alan J. Borsuk are reporting in the Milwaukee Journal-Sentinel that Shuntell Whittaker-Tucker was charged yesterday with the theft of $306,000 in cash from America's Second Harvest of Wisconsin. The alleged thefts occurred over a 7-year period, beginning in 1998. Charity Worker Charged with Theft: Second Harvest Says $306,000 Stolen Over 7 Years, Apr. 26, 2007. According to Nunnally and Borsuk, the criminal complaint ties the alleged theft to a quirk in the software. WRONG…

THE B WORD HAS NOW ENTERED THE MILWAUKEE PUBLIC MUSEUM’S LEXICONN

Dateline, March 23, 2007, Chicago

On January 23, 2004, the committee was briefed on the 2003 financial audit by MPM’s previous outside audit firm. Two observations by the auditors provide early signals of concerns. First, the auditors noted that MPM had experienced net losses for two consecutive years. Second, the firm stated the “liquidity issues and cash flow management has required management’s attention.”  Within two months of this discussion, MPM’s banks were in the process of placing a general lien on all of MPM’s assets.

          From:  Interim Audit conducted by Milwaukee County Department of Audit (June 2005)

We haven’t heard anything about settlement negotiations with former Milwaukee Public Museum CFO Terry Gaouette lately.  There was supposed to be a hearing in the criminal proceedings on March 6, 2007, but nothing was reported by the Milwaukee Journal-Sentinel.  We also haven’t heard much about the much-ballyhooed fundraising campaign that has now been underway for at least a year.  And now we know why.  Apparently...