Discussion on Fiscal Controls
From tt-inc@inetia.com Mailing List

Embezzlement and misappropriation of funds happens all the time. Mostly you don't hear about it as companies hide their dirty laundry. They fire the person, threaten to prosecute unless they pay back, and sometimes the person runs town but rarely are they prosecuted with great fanfare to draw attention to the issue. Companies want to hide these matters from their stockholders.

How to avoid the following situations:

Example: a Treasurer agrees with a grant recipient to overlook lack of receipts for expenses, in exchange for kickbacks. A large grant might be expended, but upon an audit there are scarcely any receipts. The grant recipient is long gone, and the Treasurer stands with their palms up, looking innocent. How to prevent this?

Example: a grant recipient receives funds, sends receipts that look genuine, but a trip to the site where this activity is supposed to be going on finds nothing going on, and checking the source of the receipts finds these businesses do not even exist, in many cases. The grant recipient sticks to their story, claims they had a wind storm and all blew away. How to prevent this?

Example: a Treasurer is supposed to deposit gifts and grant checks into a special account for the corporation (as our Bylaws state) but deposits this into the Treasurer's personal account and merrily spends it on personal expenses. This is conversion, and embezzlement. How to avoid this?

Example: a Treasurer keeps sloppy records, so that gift and grant check records, the accounting, is lost. This may be to facilitate embezzlement. How to avoid this?

Example: a Treasurer agrees with a grant recipient to overlook lack of receipts for expenses, in exchange for kickbacks. A large grant might be expended, but upon an audit there are scarcely any receipts. The grant recipient is long gone, and the Treasurer stands with their palms up, looking innocent. How to prevent this?

Example: a Treasurer keeps good records and adheres to the Bylaws, but one day the accounts are emptied and the Treasurer is off to the islands. Absconding with the grant money. How to prevent this?