The Mikuska Group  

It’s not “bad bookkeeping”

CBC Radio reported this morning on a Winnipeg charity, Gospel Outreach, that had its charitable status revoked by the Canada Revenue Agency this month. CRA found that monies raised in 209 were going to benefit the group’s director and his family and not the people it was supposed to serve.

One of the board members claims the director has been judged too strongly and says “poor bookkeeping is to blame.” Where do I start with all that’s wrong in that statement?

This is not about book keeping. This is about decision-making.

The board is responsible for the management of this non-profit organization. They are the stewards of all funds received and must ensure the money is spent appropriately according to the mission. This is one of the most basic duties of a non-profit board, regardless of whether it is deemed a charity under CRA rules. And in this instance, they have fallen down on their duty.

The board is also charged with overseeing the performance of the CEO. Board members must be able to question the management decisions of directors/CEOs to ensure the integrity of the mission and organization. In this instance the board appears to have allowed the director to make decisions leading to unethical behaviour. By not holding him accountable, they have tacitly agreed with his actions. And in doing so they have opened themselves up to possible charges of fraudulent use of donors’ gifts.

Governance issues may not be exciting, but not paying attention to them puts any good work an organization does in jeopardy. Donors expect and deserve accountability, not arrogance and contempt.

Julie Mikuska


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