Agencies regroup after embezzlement scandal
Representatives of the group that funds many local non-profits say Robin McKenzie’s embezzlement of more than $38,000 from two Craig agencies was a wake-up call to oversight boards across Moffat County.
“No agency is fool proof and there will be ways to get around any system you make,” said John Ponikvar, board president of Moffat County United Way.
McKenzie, former director of the Northwest Colorado Dental Coalition, wrote in extra digits on her paychecks already signed by an unquestioning board of directors that also cut blank checks to her on a promise to “pay bills.”
Ponikvar suggested organizations have made limited progress to protect themselves against such fraud.
“We are encouraging it,” Ponikvar said. “Some of the agencies haven’t gotten there yet, but hopefully the boards are overseeing the process better.”
For its part, the purse strings at Craig’s dental coalition are kept tighter, several suggested.
“They’re probably the most scrutinized agency in town,” said Ponikvar, whose United Way earlier this year froze the group’s account for auditing purposes.
Books for the coalition which provides low-cost dental care to financially qualifying, uninsured families in three counties showed that McKenzie on 11 occasions wrote her own bi-monthly payroll checks for $1,798.44, as opposed to her scheduled salary of $798.44. McKenzie was the only dental coalition member with access to the account.
Two board members’ signatures were required on the checks; after which McKenzie could hand-write “1” in front of her regular salary.
Between June 2000 and February 2002, the acts of fraud totaled $37,639.63, according to court documents.
Computer accounting software printing out checks for individual employees’ salaries have been among United Way’s recommended internal checks, Ponikvar.
Similar software now tracks cash flows at Moffat County Partners, where a part-time McKenzie stole an estimated $349. She started with the group working with children as a caseworker on Feb. 20.
McKenzie, while still working with the dental coalition, was entrusted to handle money from this spring’s Easter Egg campaign, returning bank deposit slips to the group but not depositing the cash, said Robin Schiffbauer, Partners’ treasurer.
The missing funds weren’t uncovered until a week after the fund-raiser, when Partners was contacted by a local bank as McKenzie tried to make an unauthorized transfer using the agency’s account, Schiffbauer added.
“The executive director will have to be the one who picks up that money,” she said, adding Partners hasn’t specified that issue.
Debi Garoutte, the dental coalition’s new executive director, said hand-written checks are a thing of the past, while an assigned United Way liaison attends board meetings, reviews monthly and quarterly financial reports, patient reports while also keeping a strategic planning overview of operations.
The coalition recently received word of a $25,000 planning grant from the “Caring for Colorado” program. These funds will go toward exploring the construction of a stationary clinic in town, Garoutte said, adding that grant sources and donors consistently pepper the group with questions on internal procedures after McKenzie.
“When restitution payments begin, a separate spreadsheet is requested documenting monies received, and how it was allocated,” states an email from United Way to the coalition that was provided by Garoutte.
McKenzie will have the length of her eight years of supervised probation to make some $48,000 in restitution payments.
But technology alone can’t replace a board of directors’ diligence.
Ponikvar said some non-profit groups’ financial situations limit funds available for new technology, or hiring outside accountants.
United Way’s own accountant has been tapped by boards as a resource on a few occasions for advise, and has drafted basic accounting and procedural guidelines for non-profit groups, Ponikvar said.
But just getting all seats filled on volunteer boards remains a fundamental problem, he added.
“People have to be willing to put in the time, and sometimes they’re just happy to get anybody they can,” Ponikvar said.
“If you’re not getting a financial statement every month, then you probably need to question the executive director,” said Corrie Scott, Moffat County United Way’s director.
The coalition still doesn’t have a full board of directors, Garoutte said.
Two seats remain vacant on the 12-person board.
“We need community leaders interested in problems solving,” Garoutte said.
Scott said no group or organization has been rejected for funding based on oversight questions.
Individual United Way board members are assigned as liaisons to many groups receiving funding, which also file quarterly reports, Ponikvar said.
Whether or not the whole story is told in those figures is another question.
“We’re relying to some degree that internal controls are in place,” Scott said.
Evelyn Tileston, executive director of the Independent Life Center, said a raid of her group’s account wouldn’t go unnoticed for long.
“I could go down and take every cent from the account, and my butt would be fired the next day,” said Tileston, whose center provides housing for the disabled.
Aside from the group’s treasurer keeping the checkbook, Tileston said the treasurer, an accountant and board members view bank account activity on the Internet.
Paul Shockley can be reached at 824-7031 or at firstname.lastname@example.org.
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