A former top official of a Philadelphia nonprofit whose mission was to help the homeless has been accused of using a corporate credit card to embezzle $198,628 from the organization from 2005 to 2010.
According to a federal indictment issued Tuesday, Erica N. Brown, 38, of Glenolden, Delaware County, was the chief operating officer of SELF Inc., which provides services to the homeless and behaviorally challenged people.
Brown allegedly used a corporate American Express card to pay expenses for herself, including trips to the Caribbean, Cape May, and elsewhere; meals at the Four Seasons; purchases at Wawa; a gym membership; a personal trainer; and clothing, including five pair of Ugg boots.
Before she was fired, Brown wrote checks totaling $4,867 to SELF Inc. to reimburse her personal expenses, according to the indictment. From the Philadelphia Inquirer.
Ok, so we know that the Board took action against an exec that was stealing. Kudos for this. But why did it take so long for the board to notice that it was losing at least $40K a year (more or less)? According to the rest of the article, in the fiscal year ending June 30, 2011, the nonprofit received $1.18 million from the federal HUD and HHS in the form of "pass through" funding from the city and the state. In the fiscal year ending June 30, 2010, it received $1.08 million. So, while $40K represents only about 4% of their total annual revenue, assuming no other sources of income, is this amount so insignificant that it would not make a "blip"? And, why the payback of $5K? What exactly was that supposed to represent?
So, again, good board for finally noticing and taking action (firing and collecting some money). Bad board for taking so long. Perhaps the board should start by retaining a new auditor (good task for the annual Audit Committee) followed by revisiting its financial reporting systems followed by asking its finance committee what processes and procedures should be put in place to ensure this type of foul play is not repeated in the future.