Protecting Your Club’s Funds from Embezzlement

By William Given

Embezzlement is the act of diverting funds for the purpose of conversion (theft) of such assets, by a person with whom the assets have been entrusted, either to be held or to be used for specific purposes. Embezzlement can happen to any club in our sport, in a national parent club, regional or group club, local all-breed or specialty club. And, Obedience, Agility and Field Trial clubs are not immune. This crime has happened from Massachusetts to Florida and from the Carolinas to California. It happens, in part, because too often, clubs do not have the rights checks and balances in place.

Have you heard recently about one of the growing number of incidents of embezzlement in a dog club and thought to yourself, “Wow! What fools. How could they not have known their treasurer or other member was stealing money from them?” I hope not. Nothing could be further from the truth. Unfortunately, situations like this happen all too often, and most of the time, because the crime is committed slowly, over time, it is not noticed or occurs so abruptly that there is not time to react. While we all like to think the best of our fellow club members, it is critical that we all be on guard and watch the way we handle club funds and not be recklessly irresponsible. If your club does not have proper controls in place, you are just inviting trouble.

A recent CBS News report revealed that it has been estimated that 18,000 people are arrested each year for committing the crime of embezzlement. According to Joseph T. Wells, CFE, CPA, founder and chairman of the Association of Certified Fraud Examiners in Austin, Texas, the annual losses resulting from the offense of embezzlement in both large and small, for profit and non-profit organizations approaches the astronomical sum of $400 billion dollars. A large share of this amount is misappropriated by trusted members of the organization who have previously enjoyed both excellent professional and personal reputations. The embezzler is generally considered an anomaly in the arena of crime. There hardly ever exists any record of even petty crime, and in many cases those individuals charged with the crime have a very solid work record which helps to conceal whatever the weakness is that may exist in the thief’s personal life.

Trust But Verify

The leadership and members of a club may not want to put strong financial controls in place for fear of making their club’s treasurer feel distrusted. However, that thought process is flawed. An honest treasurer would want checks and balances in place so there could never be any question of his or her integrity. Louise Leone, president of the Colorado Kennel Club, which was heavily embezzled from in 1989, wants everyone to know, “this is not about trusting or friendship, it is about running a club… run your club like a business.”

Additionally, it is unfair to your club’s treasurer to give him or her unrestricted access to the club’s hard-earned fiscal resources. At some point, he or she may face unexpected financial difficulties (and almost all of us do), so why tempt a person when he or she is most vulnerable.

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Posted by Alex on Jul 21 2016. Filed under Current Articles, Featured. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.