Does anyone know if the Board was receiving financial statements at all since June? Were they asking? Did they contact the bank if this did not materialize?
Board can't control everyhting, but I am really concerned that this went on for six months w/o more intervention.
Thanks.
Professional Credentials: Director, Volunteer Services and Fund Development
Marcia, in response to your question... I came in as Treasurer in November and can answer your questions.
The board met in June and then in November. Financial statements were to be presented by the ED. They were requested and expected. I observed innumberable errors in the June statements and requested corrections. We were told the system was being revamped and a person trained to solve the problems. The board trusted this information and had assurances that operational expenses and revenues were in line with the established budget. When I was elected, I requested accurate financial statements for all the months to November. Again, they came with errors, were rejected, and the demand made to deliver correct statements was made with a deadline given.
I contacted the auditor with my concerns (who by then was working on the 2004-2005 audited statements sent recently to members) I was given a draft of the management letter citing the concerns, errors and ommissions found in the audit process. The ED was asked to clarify and produce explanations. He passed an set deadline. The Executive Committee had made the decision to terminate based on what we took to be a refusal to comply with the demand to produce accurate financial information for the board (part of the job description).
In short... the board trusted the ED and delegated the operational aspects of the organization's finances. The credentials of the ED were impeccable and the board had no reason for concern in delegating these responsibilities. Indeed, it is a normal delegation made by boards of directors in the nonprofit and profit sectors.
When concerns were expressed, the board followed up immediately and continued to do so. The true situation did not come to light until Nov-Dec 2004 when we uncovered with the help of the auditor, that the association had a shortfall of about $300,000.
