Theft of Unit Funds

[SeattlePioneer]

Theft of unit funds is a risk most units should take more precautions against, in my view. The episode below has many of the elements which cause such thefts and allow them to go undetected:

 

 

 

 

 

 

[Eagle732]

Sucks stealing from kids.

All units should have an outside audit.

Who do you get to do that? A professional accounting firm (at what cost?), someone outside the unit who is knowledgable in accounting practices, or maybe someone from the CO?

We should probably have our books audited but don't. Something to look into.

[SeattlePioneer]

I have just been appointed Pack Treasurer.

 

 

Personally, I don't think an outside audit is needed, and it would be a significant expense.

 

The methods I support for maintaining transparency and preventing theft include:

 

 

1) Have checking account statements sent to the Pack Committee Chair or someone designated by the chair to review the checking account statement for any irregularities, and to approve any checks written to the Treasurer.

 

2) Anyone receiving pack funds, especially cash receipts, will issue a receipt in a three part receipt book.

 

a) one copy is sent to the Treasurer along with the payment received

 

b) one copy is given to the person making the payment

 

c) the third copy stays with the receipt book.

 

Cash is an especially slippery commodity, and even an honest person can forget about receiving payments. This can insure that payments to the unit are received.

 

3) Any checks paid to the Treasurer are approved by the Committee Chair or his designee. Aside from that the Treasurer only signs checks. (of course the Committee Chair sees all the checks when the monthly statement comes to him)

 

4) I plan to use Quicken to record pack financial transactions, and I plan to e-mail monthly financial statements to all families.

 

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So let's suppose someone makes a cash payment for a pack activity. The person making the payment should be given a numbered receipt for their payment and they should be able to see a record of that payment being deposited in the checking account in the monthly financial statement.

 

In case you haven't noticed, I'm as concerned about making sure that payments made to the unit are actually deposited as I am in making sure that checks are written for appropriate purposes.

 

It's all too easy for checks and cash to never get deposited. They are easily lost.

 

In general my aim is to maximize accountability while minimizing the burden of accounting for funds.It is IMPORTANT that people who have pack expenses get reimbursed for those expenses quickly and as easily as is practical.

 

Those are my bright ideas, anyway. Anyone have improvements they would suggest?

 

 

 

 

 

[eisely]

The first adult volunteer position I ever held was that of Pack treasurer. I would add:

 

1. Use a dual signature checking account

 

2. Treasurer, committee chair, and unit leader should all be from different households

 

3. Monthly finacial reports to the committee.

 

One of the first things I did after I accepted the position was purchase a receipt book (mine made only one copy). I found myself accepting a large number of small cash payments at pack meetings for various things and this was the only way I could keep straight what all the money was for. This is probably less of a problem for a troop treasurer.

[Basementdweller]

Someone recommended having the bank statements Sent to the CC or other leader anyone other than the treasurer.

[fred8033]

The only good solution I've seen is transparency. Identify one person as the treasurer, but make sure multiple people are seeing the bank statements. For our troop, we have five people with online access to review the account. Each person has their own sign-on and can see the data.

[SeattlePioneer]

The only time a policy of two signatures makes sense to me is when the Treasurer is paying expenses to himself. Then my plan is to send the CC receipts for my expenses and have him sign a check made out to me.

 

The rest of the time, the Treasurer is already an independent person and getting a second signature is a pointlessly burdensome practice, in my view.

 

If checking account statements can be viewed on line, that's great and as many people as may be interested can view the statement. But ONE person needs to be RESPONSIBLE for reviewing the checking account statement every month other than the Treasurer.

 

Anyway, those are my current thoughts as I propose to get started on the job as soon as the current Treasurer is ready to pass things on to me.

[nldscout]

While these are all great ideas and will work for the honest person, we all know that if someone is determined enough they will find a way to beat the system.

 

One thing to look into is Bonding your treasurer. Most Non-profits already do it for thier employees that handle funds, you may beable to piggy back off your CO for a minimal cost.

 

Also watch the treasurers home life. If there is a life altering event, loss of job, divorce, death of immediate family member, or anything like that. These are the times to watch them closer.

 

Lastly if you do detect or suspect some ongoing fraud its time to be un-scoutlike and turn the issue over to the professionals in the criminal justice system for handling. The system is far better equipped to deal with it than a unit scouter.

 

If you delay it may mean you never get your money back.

[SeattlePioneer]

 

 

 

I agree that it's fairly common for financially desperate people to get themselves into trouble if they have access to other people's money. So I think that's good advice. I don't know how many units are going to be willing to find a new Treasurer on that basis, though.

 

 

 

I don't know how practical that might be. It's not something I would take the initiative to do. Our ties to the Catholic parish that charters the pack are more limited than I would wish for.

 

 

 

 

 

In my view, the biggest check on abuse is sending the checking account statements to the Committee Chair. If the Committee Chair is paying attention, they should be able to catch discrepancies early and they have the power to ACT promptly. If the CC doesn't want to do that, the responsibility should be assigned to another person who is motivated to scrutinize those statements, and ask further questions as needed.

 

That and getting receipts issued especially for cash payments are the things I'm hot about.

 

These are my theories, anyway.

 

 

I appreciate all the comments!

 

 

 

 

 

 

 

 

 

 

 

 

 

[eisely]

It is absolutely correct that no level of safeguards can guarantee against losses. I like the idea of bonding the treasurer if this can be done inexpensively.

 

The failure of ordinary safeguards is illustrated most dramatically by the appropriation of client funds held as a fiduciary by MF Global at the apparent direction of the former governor of New Jersey. This was not just fraud but criminal theft on a massive scale by people who knew exactly what they were doing.

[nldscout]

Fraud and theft is committed daily by the people you would least expect it. I see these people all the time, they are the ones that you would least expect.

 

I do know that GSUSA is ruthless when it comes to money, unlike a lot of BS units that will let things slide rather than causing an issue. It might be that the CO's do not want to make waves and would rather settle things privately.

[SeattlePioneer]

Understand what a bond is.

 

It's a guarantee by an insurance company that they will pay off on a court judgment if the person bonded is sued and loses in a trial, and refuses or is unable to pay.

 

The assets of most Scout units is pretty trivial --- a very few thousand dollars in most cases.

 

Even if someone steals the treasury, proving that in court would probably be complicated to do unless the person is convicted of a crime.

 

My personal bias is to have one person receiving the checking account statement who will watch what the Treasurer is doing with a reasonable degree of care. A watched pot, they say, never boils.

 

In my view, that's a better system than most Scout units have, including the system in my pack currently in place which has no review of what the treasurer is doing and infrequent treasurer reports which amount to little more than the checking account balance.

 

A Cub Pack for which I'm Commissioner has the wife of the Cubmaster acting as Treasurer.

 

I'm looking for a system that offers a reasonable amount of oversight consistent with what is practical for a Scout unit. A "Good" system is a LOT better than a poor or bad system, which is what most Scout units have.

 

That's my theory, anyway.