Too many hands in the cookie jar
We echo the sentiments of Northampton County Judge Emil Giordano when he sentenced the 53-year-old former treasurer of a Moore Township nonprofit for embezzlement.
A frustrated Giordano said it's like an epidemic, something he never thought he would see in his lifetime. Every time he picks up the paper, he said, it seems as if there has been an embezzlement of a civic group.What's going on?Cheryl Ritter, 53, of Bath, was treasurer of the Moore Township Athletic Association and admitted that she embezzled more than $15,000 of the organization's funds. According to an association official, the thefts nearly caused the group to fold.These types of crime are all the more despicable, because they stab a dagger into the spirit of volunteerism. On top of that, the perpetrator is often a trusted member of the organization, a neighbor, a friend.All across Pennsylvania, including our area, you will find incident after incident of this type of malfeasance. A recent Washington Post analysis of more than 1,000 Internal Revenue Service filings for nonprofits nationwide found that 61 charities in Pennsylvania reported that they were the victims of employee/volunteer theft or similar issues.The Association of Certified Fraud Examiners says that a typical organization could lose up to 5 percent of its revenue from illegal activity such as embezzlement.Last year, Amanda Devine of White Haven, the wife of the Kidder Township Fire Chief, pleaded guilty to stealing nearly $33,000 from the Kidder Township Volunteer Fire Co. Police say she admitted writing out checks to herself for personal business.The president of the Sharon Little League in Mercer County was charged with stealing $5,000 to pay gambling debts. An accountant swindled $57,000 from the Lower Gwynedd Little League in Montgomery County, funds that were to be used to purchase new uniforms; he spent them at strip clubs.The treasurer of the Conemaugh Township, Somerset County, Youth League embezzled nearly $20,000 over a two-year span. Sheri Lopez of Wind Gap, who worked for the Lehigh County Conference of Churches, was accused of taking more than $300,000 from the nonprofit's clients.State Rep. Ryan MacKenzie, R-Lehigh, proposed a bill to strengthen prison terms for those convicted of stealing from charities and government entities. House Bill 1863 was approved unanimously in the lower chamber but died in the Senate.It would have provided a sentence of up to 10 years for thefts of more than $100,000, and up to 20 years if the embezzlement was for more than $500,000.We believe a stronger bill of this nature is long overdue and would cause money-handlers from these organizations to think twice about the consequences they are going to face if they embezzle funds and are caught.Thefts from nonprofits cast a shadow over the organization. Donations may begin to shrink due to a perception that the group is reckless and fails to institute proper controls.According to certified public accountants, the most important thing for organizations to do is to set the control environment.Too often, the top person sets a sloppy and unethical tone for the organizations prompting others to feel that they don't have to follow procedures or tempts them to cut corners.Here are some common-sense rules money-handlers in these organizations should follow:• Define who is responsible for which areas and hold him or her accountable.• Lock up important papers and equipment and use individual and unique passwords for computers.• If cash is involved, have at least two people count the cash together.• Have a second person reconcile bank accounts.Let everyone from the top down know that there are policies in place, and everyone must follow them, or else …By Bruce Frassinelli |