Authorities say embezzlement at nonprofits not all that uncommon
The arrest of two former employees of the Central New York SPCA for allegedly stealing funds from the animal shelter shines a light on the issue of embezzlement at nonprofits.
It’s an issue that’s not that uncommon. Just this year in central New York, there have been accusations of a woman stealing from a nonprofit that works with people with mental illness and substance abuse. There have been two stories of accusations of embezzlement in a couple of Pop Warner football organizations. And a Syracuse couple two years ago admitted to swindling a Manlius church out of almost a half million dollars. What do these cases all have in common?
“The common denominator is invariably, a long-time employee, that everybody knows, and everybody trusts,” said Onondaga County District Attorney Bill Fitzpatrick.
Fitzpatrick says that was the case with the SPCA. The former director and an associate are accused of stealing nearly $700,000 over five years, by writing checks to themselves from the animal shelter’s general fund. Ex-executive Director Paul Morgan had worked there for about 20 years, and Fitzpatrick says there’s an easy answer to avoiding this kind of theft for any nonprofit.
“Don’t trust anybody,” he said.
And that means having rules in place, where there are checks and balances when it concerns money.
“You’ve got to have a system where multiple people review accounts, checks,” he said. “You can’t have one person with check-writing authority. All checks need to be countersigned by at least two people. And there have to be periodic audits by outside agencies.”
Fitzpatrick says anyone interested in more information on this can contact the Rackets Bureau in his office. As for the SPCA, the animal shelter has changed the way money is handled. And interim director Nick Pirro says it can be a lesson for all.
“When you ask about not-for-profits, the fact that everything was in the hands of one person was a huge mistake. And that’s what happens,” said Pirro.