Several small but long-established nonprofits have fallen victim to embezzlement in recent years, including the Wilson Borough Lions Club, the Tri-Boro Youth Soccer League and the Bethlehem Steelers Athletics Association.
Tom Barrow was preparing to retire as president of the Blue Mountain Youth Soccer League three years ago when a scandal rocked the organization:
Moore Township complained the league was overdue on a $5,000 payment and he discovered the group's treasurer had cooked the books.
A police investigation revealed the club's treasurer, Sara Lemmerman, pocketed more than $24,000 over a six-month period by writing out 38 checks to cash. The thefts nearly canceled the season that year for a league that serves more than 3,500 children, Barrow said. They only got by because there was an account with $8,000 to which the treasurer didn't have access, he said.
Assistant District Attorney Jim Augustine, head of Northampton County's white collar unit, said he does not believe these high-profile embezzlement cases mean such crimes are on the rise. While some people may be stealing to support themselves in a weak economy, he finds greed is often the main motivator.
"People always do this stuff as long as there is insufficient account controls. A lot of these folks are not even struggling," Augustine said.
Best practices
View full sizePeople who serve on nonprofit boards need to be aware of the financial and legal obligations they assume when they volunteer. Situations like this are ripe for abuse, said Northampton County Controller Stephen Barron. Barron, a certified fraud examiner who has assisted in police investigations, recommended that nonprofits have the board go over bank statements on a monthly or quarterly basis to ensure spending is legitimate. Someone other than the treasurer should also receive bank statements, he said.
Both he and Augustine recommend organizations require two signatures on all checks to prevent unauthorized spending. Another good practice is an annual audit, they said. While pricey, it can provide peace of mind to both the nonprofit and potential donors, they said.
If something fishy does turn up, Barron said it should be reported to police right away. Delay can grant a suspect time to cover his or her tracks with misleading documents, he said.
"Someone who is cunning enough to steal what you believe is a small amount may turn out to be stealing more," Barron said.
The Blue Mountain Youth Soccer League installed most of those practices, Barrow said. Two signatures are now needed on checks, and monthly meetings ended with the treasurer going over financial statements with the heads of some of the soccer clubs. Barrow said he purposely rotated which people would review the finances with the treasurer.
“It kind of empowered everybody to be part of the safeguard process,” he said. “I don't think they'll ever have problems again. It would take a massive conspiracy.”
Help offered
Many of these practices may seem like common sense, but they're often the last thing on the mind of someone running a nonprofit on a shoestring budget, said Georjean Trinkle, associate director of NORWESCAP, a nonprofit organization that serves low-income families. Oftentimes, the main concern is finding enough volunteers, not whether a trusted adviser is stealing, she said.
It's not enough to get a willing volunteer, Trinkle said. People who serve on nonprofit boards need to be aware of the financial and legal obligations they assume when they volunteer, she said.
"You can't just be a warm body. You can't just show up," she said. "You have to have the qualifications."
To help educate groups, Trinkle said she teaches nonprofit management courses at Warren County Community College. NORWESCAP also oversees the Skylands RSVP and Volunteer Resource Center, a program that interviews potential volunteers and helps match them to organizations in Hunterdon, Morris, Passaic, Sussex and Warren counties.
The Bethlehem-based nonprofit Share, Care, Faith and Action hosts a similar volunteer matching program for Lehigh, Northampton and Carbon counties.
Lemmerman, who died last month, paid back what she took to Blue Mountain and got into a first-time offender's program that allowed her to avoid prison. The league is growing now, Barrow said, but the thefts still stain his memory of his time there and he wishes he had done something to prevent them.
"I will always have a feeling of responsibility for it," Barrow said.