Pay closer attention

Charities and not-for-profit societies need to revisit policies on accounting procedures and handling money. First, an epilogue. The vast majority, 99 per cent at least, of volunteers are decent, honest individuals and communities all benefit from their dedication. This editorial not aimed at them.

An ugly side of societies and non-profits which people don't realize is the many groups that experience “financial irregularities.”

In Kelowna, money has been reported missing from the hospice society. In Penticton, $330,000 vanished from minor hockey; police are investigating “financial irregularities” with the Downtown Penticton Association. The Legion and ANAVETs have both had money problems in recent years.

There could be more because quite often organizations fear negative publicity and quietly look after the problem in-house. Very few of these cases are ever prosecuted because police or the Crown will say it’s too difficult to prove.

The dishonest volunteers justify theft in their own minds believing they should be paid for their work. The board or society would be unable to operate without their volunteerism.

By contrast, a business or large public employer has accountants, employees, a system of checks and balances, surveillance, and employees are less likely to steal for fear of losing their jobs.

Irregular bookkeeping often goes unnoticed because very few people understand accounting.

It’s not that tough to rectify. Each non-profit needs to be doing the following:

• Board members must step up when they take a directorship and just not be a passive member there for a free lunch and group photo. Don’t be afraid to ask hard questions, it's not questioning anyone’s honesty or integrity.

• The treasurer needs to be someone with some financial acumen and not a person who accepts the position because nobody else would do the job.

• More than one signing officer is required and the second or third person needs to be assertive and never sign a bunch of blank cheques because “it saves time.”

• Board members need monthly statements of income and expenses and they need to review them. This could go as far as having sources of income and sources of expenses stated.

• Good purchasing rules must be required. Anything over a certain amount must be approved by the board.

• Cash can be tricky but point of sales need to be explored. A series of people need to be handling cash and if there’s only two, they should not be married or personal friends.

This may sound disrespectful to our many not-for-profits but the problem is greater than people might realize.

—James Miller, Valley Editor

Directors need to keep closer eye on the finances