Committee Chair Embezzled

[emstari]

HISTORY: Our committee chair refused to give the accounts to our newly volunteered treasurer. After months of insisting, the committee finally got the records and discovered he had been using the account for personal use (hotels, personal gas, etc.) and not paying for the son's expenses. We cannot tell if cash was taken as well. According to our internal audit it amounts to about $2,000.

OUR ACTIONS: We informed our council, but they said they are not interested in supporting us. Our charter organization is not active with us and is not aware. We are having a meeting to let our families know and to figure out our next step. What do you suggest?

We are considering small claims court, but really don't want to put bad publicity into the community about scouting. Unfortunately, our group is so small that we can't afford to wave off the loss. Any suggestions on how we should handle this? -Thanks.

(This message has been edited by a staff member.) (This message has been edited by a staff member.)

[Guest OldGreyEagle]

What exactly did the Council Executive say?

[Twocubdad]

What do you mean "not paying for the son's expenses"? Was the money general unit money or was it specifically for the CC's son's Scout account?

 

 

[evmori]

Count your losses. Inform everyone of the amount & move on. Learn from what happened. Make changes to ensure this doesn't happen again.

 

 

Ed Mori

Troop 1

1 Peter 4:10

[Double Eagle]

I've dealt with a situation similiar to this, about $2,000. We verified with receipts how much the leader owed. We notified the COR after a emrgency committee meeting was held. The committee decided that the leader, who admitted to the incident, would pay the amount owed by a certain date. The leader paid in portions and a receipt was made with each payment. When the incident first came to light, we drafted a memo of agreement of the incident. This also served(This message has been edited by Double Eagle)

[Eamonn]

I am a wee bit puzzled as to what was taken?

If someone has taken something that isn't theirs they need to return it.

The Chartered Organization does need to be informed either directly or through the COR.

The Chartering Organization have some options open to them. I would hope they would want to remove the Committee Chair. From the Unit. However they do not have to. They might be happy to leave this in the hands of the Committee. Or they might decide to take whatever action they deem to be in order.

If it comes back to the Committee the committee need s to decide if they want to try and recover the money. If so I would send a letter by certified mail asking for the return of the money in a timely manor. In the letter I would say that if the money is not returned that Legal counsel will be taken by the committee and that this will be added to the amount owed as will all fees legal and non legal. I would add the cost of the letter to the amount owed.

While this is a unit problem and I can see why the District and Council do not want to get involved (They don't have the power or the authority to do anything anyway !) I would talk to the DE or better yet the SE and inform them that this person has taken the money. The SE can revoke the membership of this person and make it impossible for them to go to another unit. But that is up to the SE.

While it would seem like bolting the door after the horse is gone the Committee does need to take steps to ensure that this never happens again. You might use this ill wind to help the unit improve the relationship with the Chartering Organization.

Eamonn.

PS. While I was serving as Cubmaster we had one family that went MIA with their popcorn money. We hired a debt collector, she charged 30% which we added to the outstanding amount. We recovered the money, but lost a Cub Scout even though we made it known that the boy was welcome to return to the pack.

I have been in business for many years and do go after all money that is owed to me.

When I first started renting out houses one guy owed me a little over $1,000.00 I took him to the local Magistrate, who is now a friend of mine. He gave me a real hard time. He asked why I bought the houses in the first place? Was I trying to make money or run a charity? We still own a number of houses but we never ever allow people to fall behind.

Some times we all need to be hit over the head with a 2x4. I owned and operated a couple of restaurants for about 16 years,when we first started out our goal was to make the best food possible. One day in a trade magazine I read that there was something that every restaurant should make and make well and that was money. When we started making money life was a lot better.

You guys have been raising money for the Scouts, not for the Committee Chair. I know that allowing him to get away with it would happen over my dead body.

[Rooster7]

My guess is If the offending party is not willing to make amends voluntarily, this will be a huge headache. Furthermore, unless your chartering organization gets involved, I dont think you (the committee or the parents) are in a legal position to do anything about it. That is to say, I believe the chartering organization is the only legal entity that can claim damages here. Equipment, property, funds, etc., acquired by the troop belong to the chartering organization.(This message has been edited by Rooster7)

[scoutldr]

Agree with Rooster. Your first call should have been to the COR. Let them decide what action to take, including calling for an external audit to verify that a crime was committed. For the other unit leaders to conduct the audit is probably not very credible.

[Laurie]

As a former bookkeeper, and also having served as chairman of the board and treasurer to local non-profits, I suggest caution and discretion.

 

Within a unit, I would not go to the families, but I'd instead be sure the CO was aware of this and gave guidance or took over. In the event they don't want to take over, I'd ask for specific direction/advice on moving forward. Give them the opportunity here, and make sure you don't move forward without doing so--at least not any more than you have already.

 

Second, regardless of where this type of question comes up, this is a very serious charge. What prompted the turn over of the records? And what accountability (for the CO, unit and the protection of the person handling the funds) was in place? What type of account was this (it isn't clear in your post)?

 

I don't expect this to be answered here as you may not be able to provide details publicly. However, even cash can often be accounted for. Bank statements are valuable tools to use to track incoming and outgoing funds, particularly if the funds aren't clear. A cash withdrawal on the bank account held by one unit I serve requires a completed withdrawal slip with ID and signatures from two authorized users. Though it doesn't show the use of the funds, it does show the cash withdrawal amounts AND who withdrew the funds. Then comparing them against receipts, then against the known expenses (ie sometimes a receipt does get lost--but an advancement form shows the cost of one purchase), and moving forward in that manner--to eliminate every possible question mark from the records--can show two things: deliberate wrong doing or sloppy handling of records.

[emstari]

This is definately a lesson learned. Unfortunately we are all just volunteers with limited time and little support (in some cases even from our families). It's hard to stay motivated in scouting when trouble stirs. But, we stay strong in our greater cause of raising fine young men. Thanks for your support and suggestions.

[NJCubScouter]

I'm a little unclear how the money got out of the troop's bank account and into the hands of the hotels, gas stations, betting windows, houses of ill repute, whatever. (I was just embellishing the stated facts at the end there.) Did the CC write checks from the account and give them to the various places in payment of his expenses? (It seems doubtful, most such places generally don't take personal checks, and a check that says "Troop 503" is probably not going to be any more welcome.) Did he write troop checks to cash, or to himself? (In which case, I have to wonder a bit about possible liability of the bank that cashed them, unless he did it for $20 at a time or something like that, and/or spread the check-cashing around to different banks.)

 

Until I know that, I won't suggest what I think about this. (Well, ok, maybe I will give just a hint, the words "theft" and "police" come to mind. The word used in the title, "embezzled," is just a fancy word for "stole." But as I say, we need more facts first.)

 

And by the way, I thought the BSA recommended that all unit checking accounts have 2 signatures required on each check. Am I wrong about that? (Having said that, I don't think our troop requires 2 signatures. But the question comes more easily to mind where you are talking about a unit where someone actually did steal money, if that is the case.)