Organizational Checks and Balances are as Important as Ever
Within non-profit organizations, especially those dedicated to youth sports that Demosphere encounters on a daily basis, it’s incredibly important to have a system of checks and balances in place.
At least once each year, we see a story of a club facing difficult times following the actions of dishonest individuals. Yesterday in Yuma, AZ, two former board members were accused of stealing nearly $50,000 from Yuma Youth Soccer Association. The accused served as President and Treasurer respectively and there’s no telling whether the club will see those funds again.
To help protect your organization from similar situations, consider the following precautions:
- Require Two Signatures on Checks. For any club expenses, require two authorized club administrators to sign the check to ensure the payment is for a legitimate expense.
- Invest in a yearly audit. Although this is an additional expense, it’s likely that few administrators are experts at analyzing balance sheets, income statements, and other financial reports. Bringing in an outside company to review these figures will raise any potential red flags that require further analysis.
- Term Limits. If possible, aim for certain term limits within your organization so an individual cannot remain in the same position indefinitely. In addition, structure position durations such that they aren’t up for vote in the same year … think about half in even-numbered years and half in odd-numbered years.
These tips can probably go a long way towards preventing situations like we saw in Yuma this week. What other tactics have proven effective in your organization?