Nonprofit organizations
For nonprofit organizations, accountability is of the utmost importance. Nonprofit organizations often undergo scrutiny by federal, state, and/or local regulators, by government and private rating services. They’re also accountable to Boards of Directors and donors.
CPAs are quite capable of helping nonprofits with their accountability and reporting requirements. They also can help nonprofits cut administrative costs and help ensure that the most money possible goes for programs and services.
When money disappears: Unfortunately, there are other issues with which too many nonprofits find themselves involved: embezzlement and other theft.
Sometimes, embezzlement or other theft is the result of desperation. An employee may have a gambling problem. Or perhaps one of the employee’s parents or children is sick. Often, people who take money from nonprofits plan to pay it back. But they’re caught before they can.
In some cases, however, the reason for embezzlement is simply greed.
Case study: Gifts from the gift shop
We were called in to investigate suspiciously low profits from a Long Island hospital gift shop. The circumstances were particularly sensitive, since one of the two elderly women who ran the gift shop was the wife of a prominent elected official.
We quietly went over the books, all inventory documents, and even receipts. Much to everyone’s shock, the two women had stolen, rather than sold, hundreds of stuffed animals. We never did find out what the women did with the stuffed animals—perhaps opened their own gift shop?
Since that engagement, we’ve created systems of checks and balances to help owners of all businesses—for profit as well as not-for-profit—to detect embezzlement that has taken place in the recent past, or that’s still in progress.
Equally important, we've designed systems to help business owners and executives of for-profit and non-profit organizations prevent embezzlement in the first place.
