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$73K over 2 yrs embezzled from scout troop


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http://www.ksee24.com/news/local/Man-Arrested-for-Embezzling-from-Boy-Scouts-142123683.html

 

Hard to believe

1. This went unnoticed by Troop Committee for two years, should have been caught within three months with financial report at Committee meetings. Does your Treasurer show the real bank statement or just a homemade Excel spreadsheet that could be erroneous?

2. Troop had that much dough.

 

Wonder how much money was lost from "Scout Accounts"? I see a "Money Protection" program coming...money should never be left alone with one person, three deep,..

 

My $0.02,(This message has been edited by RememberSchiff)

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In my experience, most units are sloppy accounting for cash in particular, and money in general. It's mostly an act of faith.

 

In my view, two simple practices would improve things a good deal:

 

 

1) Have the monthly checking statement sent to a reliable person other than the treasurer. That allows an independent person to look over deposits and checks written, and the statement can then be sent on to the tresurer.

 

2) Use a three part receipt book to document payments made to the unit, especially cash payments.

 

One copy is given to the person making the payment. The second copy is sent to the treasurer. The third copy stays in the receipt book as the record of the person who takes the payment.

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I'm also amazed that "The troops new treasurer confirms that all of the embezzled funds have been repaid" - how does that happen? If you have a gambling problem bad enough that you embezzle $73K from the Scouts, how is it that you have enough money to pay that back?

 

I think it would be good to have the treasurer show the actual bank account statement. We have the statement sent to the CO and they put it in the Scout mailbox, so we do have the opportunity to look at it, but I don't think that we always do.

 

I think the difficulty with the BSA requiring a fiscal audit is that the program really belongs to the CO and there are lots of ways that they could set up the finances. Because the program belongs to the CO, it's not really the BSA's purview to do anything with managing unit finances.

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I have long had a business plan on my computer for an online system for tracking and integrating financial reports for neighborhood style non-profits like a BSA Troop, Little League, AYSO. It would have a a simple interface and would integrate with the bank account.

 

Might need to dust it off again and go find a programmer or 3.

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For Scout troops operating on military posts overseas, we need to have a yearly audit to satisfy the DoD. There's no reason BSA can't ask that the CO confirm a yearly audit has been performed when the CO Agreement is signed.

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A troop that I was involved with had $14K taken by the Treasurer. It never showed in committee reports because the treasurer generated the reports and was the only person receiving the bank statements. The Troop's fix was to have the monthly bank statements sent to the commmittee chair and the Charter Organization. They eventually got all of their funds repaid.

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Hmmm.

 

this sort of things have been brought up here. In the past, I pointed out the basic practices that most other organizations follow the help avoid this. Of course, it seems most scout leaders scoff at following them.

 

Here are how most groups handle this.

 

* bank account requiring 2 signatures on checks.

 

* receipt book is also a good idea.

 

* ANY payments made must be approve by the organization, and recorded in the meeting minutes. Even for routine items.

 

* Treasurer presents a monthly report, stating where the money is coming and going. these are kept.

 

* an annual audit is conducted. This does NOT need to be done by a CPA (nice, if you can do so for free). It should be done by 3 people, NONE of whom should be the treasurer. They review the treasurers monthly reports AND the bank statements. Their job is to ensure everything is ok. This audit should be done before a new treasurer (appointed or elected annual) take on the office.

 

When there is no oversight, things can go wrong.

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Non profits are particularly susceptible to this sort of thing. The largest amount I had heard of being embezzled prior to this story was $40K+ being swiped from a high school band booster club several years ago.

 

The story is very short on details. I suspect that $73K is a cumulative total over a long period of time. It is also possible that the alleged thief did repay this gradually over an extended period of time. If repayment has already been made and can be shown to have been repaid, much of the criminal case goes away.

 

Another thing that units should do is have the treasurer be from a different household than either the CC or SM.

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When I first joined our Troop the Committee Chair and Treasurer refused to disclose the amount in the Troop account to anyone, and had hid part of the money in a separate account. They were confident that the CO, at some point in the near future, would take our funds - especially if they thought we have more than we needed to operate the Troop. They were steadfast in their refusal to disclose the amount or location of the funds, but let on that it was quite a lot of money. After the old guys retired and new blood came on the Committee, including a new Treasurer, we discovered that the secret amount was $1K! Which is about our annual operating budget. We now have total transparency so we can all see what is in the budget. And the CO has never indicated they have any interest in our budget. But I cannot imagine having $73K! Wow!! If we have a good fund raising season and end up with $2K in the bank, we feel incredibly rich!

 

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The part of the Lord's Prayer that resonates most strongly with me is "lead me not into temptation, but deliver me from evil."

 

To me that means not putting temptation in front of people. If you do that too often people will be weak and take advantage of a situation when they wouldn't if reasonable protections were in place.

 

So while it's very common for small organizations to ignore the risks just as described by Eagledad above, it's important to take precautions despite that.

 

emb21 describes a number of protections. Personally I'm not in favor of requiring two signatures on checks, it's too burdensome for my taste.

 

Ditto for requiring that all payments be approved in advance, for the same reason.

 

Sending the checking account statement to an independent person for review is the single best protection I think. That person can then raise any issues with spending with the Treasurer or at the next committee meeting.

 

When I was a homeowner's association treasurer I sent monthly reports to board members that were mostly easily generated Quicken reports. That was easy to do, but few board members were interested in reading them, or at least they were never a subject for discussion.

 

 

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IMHO, two signatures on every check is never really that great of protection.

 

In our units, the protections are #1 someone other than the treasurer gets the bank statements; #2 we email a PDF of the bank statements to four or more different families and #3 the PDF bank statements include an image over every check written.

 

PDF bank statements with check images is a service by our bank. We love it. Strongly recommend it.

 

I hope everyone reads it. but even if they don't, at least there is transparancy if someone starts questionioning what's going on.

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