EDITORIALS Charities need good accounting
The draining of the Keating Elementary School parent advisory committee’s bank account is more than a monetary loss — trust and confidence have also been stolen, and the efforts of hardworking community volunteers have been erased. It’s a lesson to all nonprofit groups to ensure procedures and rules are in place to prevent misuse or theft of funds.
Keven Elder, Saanich superintendent of schools, informed parents this week that $40,000 belonging to the Keating Home and School Association was gone, that the group’s bank account was reduced to nothing.
An investigation began in July, he said, and police are investigating the actions of a former member of the executive and “no one else is under suspicion.” Other details as to how and when the money went missing have not been revealed.
The money had been collected through fundraising and was earmarked for new playground equipment. We’ll wait for the police and other officials to sort out what happened, but suffice it to say, if the money has been stolen, it is a theft of the lowest order. People gave from their wallets and their hearts to provide children opportunities for safe and enjoyable play.
Such misfortunes occur to nonprofit groups from time to time, but they are relatively easy to prevent. The fact that police are investigating only one person indicates that one person had the ability to get access to the group’s bank account.
Standard procedure is to require the authorization of at least two people before funds can be transferred. The second signature should be more than a rubber-stamp, but should ensure a second set of eyes examines the transaction to ensure it complies with the group’s guidelines.
Fraud often happens when need and opportunity meet. Proper procedures limit the opportunity for theft and reduce the temptation for someone who might be vulnerable or in a desperate situation.
Police checks, while not foolproof, can help weed out people who have shown a prior propensity for theft or fraud.
Such measures might seem to create an atmosphere of mistrust, but they are standard practice for many charities. Not only do proper procedures protect the organization against unscrupulous persons, they protect honest people from false or mistaken accusations.
When business is conducted in the open and according to sound rules, the possibility that things can go wrong is greatly reduced.
The Keating group is headed in that direction. Elder has told parents the school board and district administration will work with the parents’ association to establish clear guidelines and protocols to prevent future losses.
The loss of funds is unquestionably a blow to the parents’ association, but not a fatal one. Communities tend to be resilient; people tend to rally when troubles hit.
In 2012, just as its annual Red Kettle campaign was beginning, the Salvation Army in Ontario got a double whammy — audits revealed the theft of $2 million worth of toys from a Toronto warehouse and the theft of $240,000 in cash donations from an Ottawa facility. Executive directors at both locations were fired.
Rather than putting a crimp on the Salvation Army’s Christmas season, the news of the thefts sparked overwhelming support from people and organizations.
The good side of human nature will triumph over the darker aspects — and that will likely be proven by the Keating community — but that doesn’t negate the need for good accounting practices.