Odyssey of Corruption – The Latest Massachusetts Nonprofit Scandal

NPA Consultants derived lessons to be learned from what bad examples have in common:

1. Almost all staff, managers, and Board members are honest and well-intentioned. But that is just not enough to completely prevent either inadvertent errors or intentional abuse.
2. Well thought out internal control procedures are intended primarily to help those employees and Boards really trying to do a good job. It minimizes the risk of errors – from the clerks who process transactions to Boards who monitor performance. Good internal control helps the organization perform “better, cheaper, faster,” as my high tech friends would say. 
3. Well thought out internal control procedures make it harder for dishonest folks to engage in fraudulent activity; and hopefully detect bad behavior once perpetrated. Where intimidation is a potential issue, whistleblower telephone lines make a difference.
4. Good internal control includes Board responsibility and behavior. Board members must be independent of senior management in every sense of that word. Boards can and should seek out the advice of independent accountants, lawyers, and other consultants. They should think for themselves and not be a rubber stamp for management. 
5. Bad internal control makes operations inefficient and risky, opens the door to dishonest behavior, and hurts company morale for all the honest, well-intentioned employees. And it can ultimately ruin the organization and the stability of all those good folks connected with it, not to mention the organization’s mission.