NonprofitEye

We've talked about the scary repercussions of trying to reach unrealistically high performance measures before.... I just came across an article that's apparently been around since 2003, How I Cooked the Books and Why . Written under the pseudonym "Phil Anthrop" (which is funny by itself), Phil tells the harrowing tale of good values going horribly wrong. I highly recommend this article to anyone managing nonprofit service contracts. Maybe when our funders ask us to meet some unreasonable metrics we should all just quote Nancy Reagan and "just say no." After all the same contracts require compliance with the Drug Free Workplace Act (product from the same administration). The article comes from a back issue of the Nonprofit Quarterly (which I am obliged to plug once again). Please be assured that no payment has been received for this nod (and I have no financial interest, etc)! I just love and admire that rag. Further reading from the " Eye ": ...

Nonprofit Image Problem? by pam ashlund Life has a way of being just plain embarrassing sometimes. I've been in accounting since the '80's. As a manager I take my job and it's concomitant responsibilities very seriously. I work hard to achieve due diligence, as any good financial manager would. Along those lines, I keep up on the body of work on the subject of Fraud Detection. Here's the rub: Call it vanity, call it a mid-life crisis, call it treating myself to one big splurge.. I bought a sports car this summer. Oh the shame. I love this car so much true, but how embarrassing in the nonprofit world. I know I should be driving a Prius d--n it. I document my love-hate relationship with this car on my blog: Boxster Heaven How do these two topics converge? The IT Compliance Institute (the self-proclaimed "Global Authority for IT Compliance Information") has a great article called Best Practices: Ten Tips for Fighting Corporate Fraud. And #7 on that list is: ...

Are nonprofits just sitting ducks? Is it easier to steal from a nonprofit? or is it a limit of imagination...our hearts are in the right place so much so that we can't conceive of someone setting out to take advantage... Still every month (even every week at times), another story of a nonprofit fraud. NOTE : these are not charities who have defrauded the public, but rather charities who have been the victims of fraud. SEPTEMBER 29, 2006 METHUEN, Mass. A Methuen woman faces two dozen felony charges for allegedly stealing from the Children's Glaucoma Foundation . ...45-year-old Karen Sicher stole more than half a million dollars from the Boston-based nonprofit organization.... SEPTEMBER 24, 2006 Elaine Bernard and Carol Dela Torre (launched) Genesis in 1987, eventually turning the Fresno group home and foster-care business into an $8 million annual enterprise caring for neglected, abused and abandoned children...Now the sisters...are accused of using the nonprofit's credit...

The Hazards of Revenue Recognition for Non-profits by pam ashlund "New" nonprofit rules for recognizing revenue were established by the Financial Accounting Standards Board back in 1993 (FASB 116), links summarized in a previous post . Then why now is the subject of Revenue Recognition suddenly so important? File it under “Blame it on Enron”. When this infamous company decided to recognize revenue based on their projection of future sales (NOT completed sales), they opened the door to a previously unimaginable new chapter in the ongoing novel of Fictional Accounting. The guys who came up with this scam were known as " The Smartest Men in the Room ". Were they? The answer is yes (and no) and yes. Madness in the Method? Even though their method was clearly preposterous, the lesson we can learn from their sad example is that accounting is mostly, but not ALL hard science. Many accounting decisions involve significant “management discretion”. Any area of accounting that...

A Nonprofit Closes after being labeled High Risk: SAS 99 - A Nonprofit Case Study by pam ashlund “The worst lies are the lies we tell ourselves” Richard Bach Looking for how auditors assess risk? On July 31, 2006, The Washington Times reported that the Arlington Community Action Program (ACAP) was shutting its doors . Community Action Agencies have been providing poverty prevention programs since 1964 and Arlington was no exception, having just celebrated it's 40th anniversary and being awarded a commendation from Congress. What do we feel when one of our fellow nonprofits goes down? Worried that the situation will cast its dark shadow upon us? Sad that maybe it was unfair; or that they did good work; or that they didn’t know any better? In the end the best we can do is a careful post-mortem and then…learn from their mistakes…and hope that history won’t repeat itself. What happened at ACAP? First ask yourself “ what makes you feel safe ”? How about “ We’ve been in business for ove...