It is generally offered by consultants like myself that a nonprofit Board should be involved in at least three activities to execute its fiduciary duties: planning, policy making and evaluation. Boards also hire and oversee an exec and may be involved in raising funds or at least representing the organization to members' respective networks.
It's a rare opportunity when there is a story about what can happen when nonprofit boards fail to implement policies that support mission and provide for adequate oversight. The Inland Regional Center, which is now responsible for the repayment of nearly $10 million to the State of CA, has provided us with just such an opporutnity and serves as a good example of the type of policy making that falls within the fiduciary duty of care purview of the board.
A hint to the kind of policy that should have been in place was provided by the State's audit findings. According to the Press Enterprise (Corona, California), the State's report:
...found that the center had circumvented a freeze on vendor rates, violated purchase-of-service rules, and that employees still feared retaliation for reporting improprieties. It also concluded that the center improperly spent $3.2 million in purchase-of-service money for housing.
Tsk, tsk, tsk...but thanks for the bad behavior - it provides a lesson to us all.
Thanks for the heads-up Dr. Eugene Fram!
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