Yet again, someone on the inside is accused of ripping off a nonprofit agency. This has happened too often, and wasted a lot of public and philanthropic dollars. It is time to significantly increase oversight of such agencies.
Karen O. Lewis, 57, executive director from 2000 to 2009 of the now-defunct South Arsenal Neighborhood Development Corp., or SAND, was arrested last week on a charge of first-degree larceny for allegedly stealing from the organization. Since its founding in 1968, SAND had been a major player in North Hartford, involved in housing efforts, job training and other initiatives. Ms. Lewis, who succeeded longtime director John Wilson, appeared to be an energetic and competent leader. She worked with corporate leaders and had a major fundraiser in 2007 that featured then-Newark Mayor Cory Booker, now a U.S. senator.
* * *Internally, agencies should segregate duties and not have one person controlling the funds during all phases of the accounting cycle, say accountants and funders who work with nonprofits. ATM cards pose a particular problem, especially at smaller agencies, and their use should be eliminated or curtailed. Board members must be involved, and should have a relationship with the agency's accountant.
Also, in addition to an annual fiscal audit, each agency should have a periodic legal review. Does the agency have up-to-date bylaws? Are they being followed? It is alleged that Karen Lewis tried to disguise her thefts as loans. There shouldn't be loans to agency personnel; SAND was not a bank.
Stephanie DotyAlso, nonprofit agencies should have outside directors appointed or approved by major funders. If, say, the Hartford Foundation for Public Giving is putting significant funds into a nonprofit agency, it should have board representation, as often happens with venture capital investments in the private sector.
Discouraging NP Dysfunction
July 23, 2014
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