According to a recent Greenwich Time report (Jan. 20), a letter penned on Jan. 12th by our town’s Superintendent Peter Mandras and addressed to members of the Greenwich Athletic Association (GAA) cited concerns about that non-profit’s financial operations.
The mission of the GAA, according to its website, is to improve adult softball and youth baseball programs, and to raise money to improve athletic fields in town. Yet, according to the news report, Madras’ letter describes parts of GAA’s tax return as “at least misleading and at most may be grounds for legal action,” and, most egregiously, that “a GAA officer received a $30,000 salary, but was listed as receiving zero compensation in the organization's 2010 tax return.”
Additionally, according to the news report, Madras cited in his letter that the handling of GAA's finances by a single person, the organization's current treasurer, was problematic.
Rush to Judge
A quick check of the GAA website reveals a “Quote of the day: Please don't believe everything you read, always know the facts first before deciding judgment!’” Though there is no attribution for the quote, Anthony Ferraro is listed on the site as both its treasurer and web master.
Blame to Share
Indeed it’s best to avoid a rush to judgment, and most good people of our town will maintain an open mind. If the concerns cited in the Madras letter reveal wrongdoing, then, certainly, blame should be shared among the entire GAA board.
There is no excuse for sloppy financial practices, though it happens all the time, even in Greenwich. The story reminds me of when I volunteered to be PTA president.
Back before my daughter’s college ‘process’ resulted in the accelerated graying of my hair, I was intrigued by possibility of doing great things for the kids at her elementary school. Upon agreeing to the role, I learned several lessons the hard way. And, although it is doubtful anyone defrauded my PTA, I inherited conditions ripe for thievery.
Potential for Hanky Panky
When the IRS swoops in for an audit, they won’t care how many cupcakes you’re busy baking if the books are a mess. Plus, donors will certainly be angry if contributions have gone missing. A non-profit’s tax-exempt status must be valued as its greatest asset.
So, here are TEN questions to ask before you agree to run even the humblest little 501©3.
1. Do 2 people sign the checks?
2. Does a separate person balance the books from the check-signer?
3. Are financial request and reimbursement forms used for out-of-pocket expenses?
4. Are annual audits conducted? By an accountant? Are they required per the bylaws?
5. How are cash donations handled?
6. Do two people always count the money together?
7. Are tickets issued at cash events? Tickets make accounting for cash easier to reconcile.
8. Does the organization have bylaws? Ask to see them. Don’t settle for "Oh, they’re around here somewhere. Why you so legalistic, girlfriend?" or "Don’t you trust me?”
9. Are the accounting files stored securely? Ask to see the inside of the (locked) cabinet where the past 7 years of cancelled checks and accounts are stored. If the IRS audits your organization, randomly or otherwise, it’ll be your problem if the files have gone walkies.
10. Does the organization carry bond insurance so that if any money is stolen, it will be recovered?
Remember, just because an organization’s membership is a bunch of moms or dads doesn’t mean the attitude toward accounting should be casual. The best way to stop thievery is to prevent it with a system of checks and balances. The GAA did not appear to have such a system in place.