And other gems from the 2014 Board Leadership Forum, submitted by Laura Boyer.
The Get on Board committee is made up of a handful of talented people who are passionate about our community.
Non-profit fraud – A forensic accountant showed board members why it was necessary to review the organization’s finances.
He told the story of one chief technology officer who bilked 100s of thousands of dollars out of a nonprofit. The trusted officer created a fake company to bill for computer equipment the nonprofit never received.
The scheme was huge – if the nonprofit had all of the servers it had paid for, it would have had more server capacity than the Chicago division of Google.
The officer fled to his homeland of Russia before he could be caught and now owns an amusement park probably purchased with the nonprofit’s funds.
It is always the nice, hardworking person who is the last one anyone would suspect of fraud. That officer was always working late to install equipment himself. He couldn’t be a thief because he worked so hard!
Main takeaway: “trust is not a control.” Nonprofits must have the same controls that for-profit corporations have – verifying invoices with packing slips, etc. Board members should ask about what controls are in place and demand action if the organization has none.
Submitted by Laura Boyer
More gems from Laura’s BLF14 experience will post soon – watch for them! Other sessions topics will be:
Legal issues for Nonprofit Board members – Two lawyers who specialized in assisting nonprofits with their business posed questions based on actual cases. The stories seemed so outlandish that they could not have possibly happened.
Consensus-based Leadership – I have experience with collective decision-making, so I was excited to hear more about it from consultants who train people in the process. They demonstrated the benefits of their process visually by lining us up in different formations that represented different forms of hierarchies.