Nonprofit board knowledge about facts and figures is essential to a board's fulfilling its fiduciary duty of care. When it comes to understanding the finances, boards are very dependent on what their execs tell them. So it's probably not surprising that boards don't always know whether the financial statements are accurate, until at least when the annual audit occurs, presuming they understand what is reported.
The following Philadelphia Inquirer story tells of a woman who managed to steal $50k a year for 12 years. The nonprofit in question has annual revenues of about $12 million so the question: how responsible is a board when it "misses" the redirection of $50k a year and what should it have done different. I don't have all the answers especially given the approach the manager used in redirecting funds.
Ex-manager accused of bilking $600K from Philly nonprofit for troubled children
Updated: SEPTEMBER 29, 2016 — 1:08 AM EDT
by Jeremy Roebuck, Staff Writer
A former manager at a Northwest Philadelphia mental-health treatment facility was accused Tuesday of embezzling more than a half-million dollars in public funds meant to help children suffering from trauma and behavioral disorders.
Police seek Suburban Station flasher
Federal prosecutors say Sonja McQuillar, the former director of health and information management at Northern Children's Services, issued checks through her job to family, friends, and agency contractors for work they did not perform.
She allegedly forged signatures to cash the checks and pocket the money herself. Authorities estimate she bilked more than $600,000 from the agency between 2002 and 2014 as a result of her purported scheme.
McQuillar, 50, of New Castle, Del., could not be reached for comment Wednesday. It was not clear from court records whether she had retained an lawyer.
She first came to the attention of federal authorities through a tip to the Philadelphia Office of the Inspector General.
From its Ridge Avenue campus in Wissahickon, Northern Children's Services offers residential and outpatient programs that serve thousands of low-income children and families. The agency, founded in 1853 as the Northern Home for Friendless Children, is a regular recipient of federal grant funds awarded by the city and the Philadelphia School District.
"Every nonprofit that receives taxpayer funding accepts a responsibility to give charitably with integrity," Inspector General Amy L. Kurland said in a statement. "These funds were designated to help some of Philadelphia's children who are most in need."
McQuillar has not entered a plea to charges of theft and making false statements to authorities.