State police charged a Michigan man with embezzlement from the Fraternal Order of Eagles, a nonprofit for which he served as the hospitality chair.
According to the police, the man failed to deposit $3,000 collected at the organization's summer event. Investigators state the man kept the money, despite a number of the organization's members questioning him about it.
The accused eventually surrendered himself to police. Chris Clor "Grand Traverse Co. Man Charged With Embezzling from Nonprofit" www.9and10news.com (May 21, 2019).
Commentary and Checklist
The theft described above is one that any nonprofit could face and most likely would find difficult to prevent from occurring.
Even if an organization assigns two or more individuals to account for funds collected at a fundraising event, it is not uncommon for just one person to be responsible for depositing that money. Making a policy that two people must go together to deposit funds could make a difference, as well as a procedure to verify the time and date of a deposit.
As a result of the above organization's attempt to get to the bottom of the issue, it was eventually able to discover the theft. The nonprofit's diligence may prevent future fraud. Statistics tell us that successful theft schemes typically encourage the thief to steal again, and usually in larger amounts, so a thwarted attempt is a step in the right direction.
Whether you are collecting cash for a fundraiser or operating a petty cash box for minor purchases, the use of cash will always present an element of risk. There are steps you can take, however, to help reduce the fraud and theft risk associated with cash.
Here are some suggestions for overseeing cash transactions and other financial fraud schemes: