PEI

Theft from Stratford rotary club a 'reality check' for other non-profit groups

The head of the United Way of P.E.I. says the recent theft of thousands of dollars from Stratford's rotary club should serve as a "reality check" for fundraising groups like hers. 

'I do think there are some very basic steps that we can all take.'

The Island's chartered professional accountant association has started offering free financial literacy courses to not-for-profits. (CBC)

The head of the United Way of P.E.I. says the recent theft of thousands of dollars from Stratford's rotary club should serve as a sobering reminder for fundraising groups like hers. 

"It's a reality check to say, okay, maybe it's an opportunity to look and see what's happening here," said Andrea MacDonald, the United Way's executive director. 

A former official with the Rotary Club of Stratford was sentenced to 90 days in jail Wednesday, after pleading guilty to stealing nearly $18,000 from the club.

49-year-old James Joseph Pineau admitted to stealing the money by writing 57 cheques to himself and forging the signatures of other members with signing authority. 

The missing funds went unnoticed by the club for two years. The club said it's since put more controls in place to prevent another theft from happening.

Andrea MacDonald, the United Way's executive director, says protecting its finances is a top priority for the organization. (Steve Bruce/CBC)

"I do think a case like this draws attention to it," said MacDonald. "It's not always great attention, but it does help us to make sure [protecting our finances] is always a priority for us."

A challenge, but necessary

Chartered professional accountant Amy MacFarlane said that can prove challenging for small, volunteer driven organizations like Stratford's rotary club. 

"Many not-for-profits find themselves at a bit of a loss. They're stretched. There are resource constraints in play," said MacFarlane, who sits on a few volunteer boards herself and is also a professor with UPEI's school of business. 

"My experience has been that they almost feel 'well we're so small, and so dependent on volunteers that we don't have the resources to do anything about this.' But I do think there are some very basic steps that we can all take."

Amy MacFarlane, a CPA and professor at UPEI says it is crucial for organizations to have open and constructive dialogue about what is happening with the finances. (Steve Bruce/CBC)

MacFarlane said above all, every organization should be ensuring at least two people are reviewing bank statements once a month at a minimum. 

Too often, she said, that task is left up to one person, like the treasurer or bookkeeper. 

"That in itself would be the single change that I would suggest to every not-for-profit," she said. "And obviously, the more timely that is, the quicker you would detect if there was any unusual cash expenditures happening."

Advice for non-profits

MacFarlane said on top of requiring all cheques to have two signatures, organizations should also require invoices or other supporting documentation to be attached to those cheques. 

When it comes to credit cards, she said there should be limitations on the types of purchases that can be made with them. 

And as much as possible, she said, money should be deposited daily, "so there's not a bunch of cash sitting out overnight."

Every organization should be ensuring at least two people are reviewing bank statements once a month at a minimum, says Amy MacFarlane, a CPA and professor at UPEI. (Steve Bruce/CBC)

MacDonald, with the United Way, suspects most organizations on P.E.I. — big and small — do have the right safeguards in place. 

Given that the United Way raises funds for other community groups, MacDonald said she ensures those groups are handling and dispersing those funds properly. 

There are over a thousand non-profits on P.E.I. doing wonderful work.  And [theft and fraud] are not something we hear happening very often.— Andrea MacDonald

"There are over a thousand non-profits on P.E.I. doing wonderful work. And [theft and fraud] are not something we hear happening very often," said MacDonald. 

"It's so important for us ... that we are trusted by the public and that we are trying to serve and make use of donated dollars best.... Boards and staff work really hard to ensure there's financial procedures and controls in place."

MacFarlane said for groups that could still use some help, the Island's CPA association has started offering financial literacy courses to not-for-profits, free of charge. 

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