Board Treasurer Doesn't Ever Share Financials - WTF Do I Do?

[AthleticSupporter]

I don't know if there is anything illegal going on with our league and how it is managing its finances.

I am nearing the end of my first term as a board member. Our treasurer has never come to a board meeting with actual reports on our finances.

The only time I saw a document with numbers on it was after I asked our president why they never show us the money on a phone call in between meetings.

Miraculously the next meeting the treasurer produced a previous season's profits and losses listed out with some current season numbers starting to be added

It was very high-level and it was a one-time thing

I thought there would be transparency in regards to where our money comes from, who we pay money to, how much we get from sponsors/donors/fundraising activities, etc. I asked how much we got in donations once and was told "nothing.'

I countered that was impossible because I had recently verified our non-profit status with Facebook and got a few donations through the platform Where they went, I don't know!

Those are small potatoes compared to other fundraising activities we've done... or so I have heard through other parents and volunteers who attended those events. Because none of that is ever disclosed in board meetings.

I don't know if this is hidden from us purposefully or not. I tend to think this guy is just lazy and doing the bare minimum.

Sadly our organization spends 80% of the board's time (and unknown amounts of its money) on all-star and select team activities. Our treasurer might suck, but it's the parents on the board and managing these groups that are unapologetically slippery with rules and use the board as an ATM.

But first things first: how do I get this seemingly well-liked and long-serving treasurer unseated?

 

[The Man In Blue]

Wow ... that is (a) sad, (b) all too common, and (c) a place I have been multiple times. The worst case, I was the President of the Board and pulled copies of the checks he wrote to his utility company and his landlord. The best case, I declined the board seat being offered to me and offered to work with them as a consultant to help fix the issues.

As a Board member, you are fully entitled to the books and all records. That does no good if there are no books and no records though. As a legal entity, especially as one who has not-for-profit status, there are records you are legally required to keep and file.

How long has this person been Treasurer? I appreciate (and love) that you are starting with assuming innocence -- that he is incompetent. That is a good place to start from until he proves otherwise.

Based on that, I would just put together a good, compelling argument to present at the next meeting. Don't be accusatory, but stay factual and layout your specific concerns. I would also say you need to have a plan to present.

Once you have that ... start early ... I would start presenting it to each individual board member before the meeting, and I would start with him. Go to him and tell him you have serious concerns over what is (or is not) happening to the organization. Tell him you think he is in over his head -- maybe he doesn't have the required skill set or maybe he is capable but just doesn't have the time. See what he says. He may fully agree and want out or he may get defensive, be prepared either way.

Propose that you find a treasurer who is qualified and has the time. It might take some legwork, but I guarantee you will be able to find a parent or community member who is a bookkeeper, tax preparer, or accountant who has some experience and is willing to volunteer their services. Maybe you have to trade a sponsorship (which costs you nothing). OK, that might take a lot of legwork, but it can be done.

 

[Itsabouttime]

In addition, depending on what type of organization it is (i.e. 501(c)(3)) the tax return may already be public information.

 

[uncdrew]

Wow.

He's skimming. Wonder what personal bills he's paid from those accounts.



That's where my head went, as I've seen it before. Happened in our back yard - guy took over $70,000 from the local rec league over several years.

 

[Orange Socks]

Could be a combination of laziness, incompetence and the old saying "this is the way we always do it." Best practices would be to provide a financial update at every meeting.

Go in with attitude that you are just asking for help understanding how these things work. Ask them which software they use for accounting. Then ask them what types of reports are available. Is this easy to produce? Not looking to get into the weeds, but to produce a ledger report shouldn't be out of the question...right? Income vs Expense. What are spending our funds on?


I am the President of the school's Booster Club and we have meetings twice a month and the treasurer always provides some type of printed report with a summary of ongoing expenses, Scholarships waiting to be paid, and income. We just did our annual audit too. We have a running balance between $90K-100K for many years. Someone brought up the concern that we we carry too much and we should look at ways to spend down those funds on the various sports programs.

 

[mmeece]

This is a problem. It might not be the problem it appears to be (theft), but the lack of transparency is a major red flag that the finances are not being handled correctly. I've run into this twice on baseball boards and it was theft in one case and horrible record-keeping in the other. Regardless, the finances should be 100% transparent and reports should be given at every meeting. If I were the treasurer I would insist on this myself, just to make it clear that everything was being handled and that I wasn't trying to pull anything.

 

[clarity]

. . . I had recently verified our non-profit status with Facebook . . .

Maybe check with the IRS instead of Facebook. Here is the IRS Tax Exempt Organization search tool: https://apps.irs.gov/app/eos/
Also, check Guidestar to see what's been filed there.

 

[The Man In Blue]

Maybe check with the IRS instead of Facebook. Here is the IRS Tax Exempt Organization search tool: https://apps.irs.gov/app/eos/
Also, check Guidestar to see what's been filed there.

Also keep in mind that there are varying classifications. For example, the league I ran had tax-exempt status (which means we didn't pay sales tax on purchases), but we were not a 501(c)3. It was not worth the money for us to invest in obtaining 501(c)3 because we did not rely on donations as a major revenue source.

 

[djcarter1966]

This is a very BAD idea...if you are a Board member I would read the by laws and your non profit paperwork very carefully, if you are the president, vice president or treasurer you may actually have some liability. Personally I would NEVER be on a board of any kind where the monthly meeting did not consist of a financial report. At least this gives all the board members plausible deniability if anything legal issues come up. However if you are authorized to sign for checks it usually take two people that are not related (if it does not you need to change this ASAP) then I am 100% making sure I have access to the bank statements anytime I want it. This is just simply not something that you can mess around with. If they paid an extra hundred dollars for nice uniforms or got some extra equipment people might question it but in the end it all went for the kids...but when people are paying their bills, pocketing cash and taking vacations on the organization account people can go to jail.

Organizations should always be transparent about their money. They way it works is you as a board agree to a budget, anything spent within the budget is no problem at all you just should have receipts for everything (super simple know that everything is electronic). Anything anyone wants to spend that isn't in the budget or over budget should go back to the board for a vote...even an email trail vote from majority of board members would be fine. Something like a quick email to everyone hey the fees for next tournament were $200 over what we estimated can I get approval for that. Seen too many crazy thing happen in different organizations for me not to be paranoid about money.

 

[KrisHur]

Lance it quick like a boil and make sure the other board members know if you don't have director's insurance you are all *personally liable* for missing funds. The IRS could come in and audit at any time so it's important that everyone knows where the money is coming from and where it's going. My dog training club (a 501c(7)) had this problem, the treasurer's daughter stole 35K from us and her mother creatively covered it up. It was discovered, we cleaned it up, but sure enough an angry ex-member (who knew nothing about it) called the IRS on us 5 years later and we had an audit. Had it been discovered then, the thief would have had to face legal consequences and the board face the liability for it.