الثلاثاء، 30 يناير 2018

Employee theft ‘shockingly common’ at nonprofits

A board member for the Somerville Homeless Coalition was reviewing the nonprofit’s annual financial documents in 2015 when he spotted something odd. The forms said the chief operating officer, the No. 2 executive, earned $12,000 more than the organization’s top executive the previous year. Could that really be correct, he asked?

Turns out it wasn’t a typo. It was theft.

Somerville Homeless soon discovered that the COO — who handled all the finances — allegedly embezzled approximately $108,000 over 18 months. The charity said he brazenly added some of the money directly into his paycheck — where it showed up on the group’s annual financial forms — used the organization’s credit card for personal expenses, and added his middle-aged son to the group’s health insurance.

“The whole thing has been a nightmare,” said Mark Alston-Follansbee, executive director of the Somerville nonprofit, which provides food, shelter, and other assistance to about 2,000 people annually. “The money he stole from us could have prevented 100 families from going homeless.”

More than 1,100 tax-exempt organizations nationwide have reported theft, embezzlement, or other major diversions of assets over the past seven years, according to electronic filings with the Internal Revenue Service. And experts say the total number of thefts is almost certainly far higher, because most cases of fraud are either never detected or reported in the digital filings.

“It’s shockingly common,” said Gerry Zack, a certified fraud examiner who recently was named incoming chief executive of the Society of Corporate Compliance and Ethics, a Minneapolis-based organization.

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