Embezzled Concerns

Nancy was hired as a purchasing clerk in charge of handling donations at a very well known and respected non-profit organization in Chicago, IL in early 2002. Nancy had a record of embezzling from a previous employer. However, the senior management made the decision to hire Nancy, giving her a “second chance”.

Eight months later, Shelly, a member of the non-profit’s development office, discovered that several donors’ contributions had not been acknowledged, from concerned donors’ phone calls. She requested the CFO of the agency immediately investigate this. The CFO reluctantly pursued this matter. Shelly repeatedly followed up with him and brought the matter to the attention of the Executive Director of the agency.

The CFO eventually reviewed the agency’s paperwork concerning these donations and found nothing out of the ordinary. He did not know how to further investigate this matter. At Shelly’s request the CFO obtained bank records that indicated that Nancy had in fact embezzled funds from the agency over a span of eight months.

Shelly later met with Tim, the agency’s auditor, to discuss the situation. In a joint staff meeting, Tim requested that the CFO diagram the procedures and policies for donations. The CFO proceeded to draw a picture of a person with their hand in a “cookie jar”. Shelly felt that due to the gravity of the situation, the CFO’s mocking of the agency’s donation procedures was very inappropriate. She later voiced her concern to the Executive Director who proceeded to laugh at the CFO’s behavior.

Shelly felt trapped, as being a steward of donor’s funds was a very important aspect of a nonprofit organization with millions of dollars donated each year to their agency. However, she was fearful to discuss her concerns.

Should she tell the Agency’s board members? What should she do?