One generally sound rule of thumb in the world of nonprofit management: don't keep secrets from your board and funder. A recent story in the New Haven Register highlights the consequence of secrets.
According to the story, the exec and CFO learned of a wire theft of $300K in funds in early December, 2024. They did not notify the board nor the state of ct, their funder about the loss until March 2025.
Finally learning of the situation the board smartly hired an attorney to communicate with the state about what happened and when. Note, the board has stated it does not have insurance for a loss like this.
The consequence: the organization's remaining grant funds have been pulled; almost all 30 employees have been notified they no longer have jobs. Work is being done to discern what the State can do to help and what the nonprofit can do to recover lost monies (unlikely).
Communication is ongoing to understand what can be done.
Obvious lessons: communication with board should have taken place immediately. The board would then communicate with the State and likely, FBI or other police officials. While the exec and CFO are culpable for failing to notify all parties as soon as the situation was known and continued to act as though recovery was essentially a "stones-throw away" it's possible, perhaps, they didn't know better and no consequences should be applied. But really? And no policies, security for technology or insurance: for sure that should be addressed ASAP.
Kudos to the New Haven Register for their fine reporting on this matter.