Salvation Army hit by two major frauds in Toronto and Ottawa

November 21, 2012 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News

Over the last week the Salvation Army has told the media that they have fired one employee in Ottawa for allegedly stealing funds and an employee in Toronto for allegedly stealing over $2 million in toys.  The stories illustrate the importance of internal financial controls.  Apparently the Salvation Army had upgraded their internal controls after a large fraud a few years ago.  The Salvation Army quite notably went straight to the media when they learned of the problem.  That is very commendable.  Many charities prefer to ignore or hide situations of material diversion of assets and it is welcome that the Salvation Army acknowledged the problem and swiftly took action.  Hopefully something positive will come out of this difficult situation.  Perhaps there will be greater awareness for the need to have financial controls in charities.

 

Charities interested in internal controls may find a 1 hour video I prepared entitled “Basic Internal Financial Controls for Canadian Registered Charities”  http://www.globalphilanthropy.ca/index.php/blog/comments/webinars_on_canadian_charity_law_-_charity_law_information_program_clip_by_/

Salvation Army thefts: Charity has been ‘inundated’ with offers of help
http://www.thestar.com/news/gta/article/1290992—salvation-army-thefts-charity-has-been-inundated-with-offers-of-help

Ottawa Salvation Army executive fired after $240,000 goes missing
http://www.vancouversun.com/news/national/Ottawa+Salvation+Army+executive+fired+after+goes+missing/7575674/story.html


Here is a great reference from Oxfam UK on financial management.  http://policy-practice.oxfam.org.uk/publications/building-capacity-through-financial-management-a-practical-guide-115411


Also see MANGO resources on financial management.  http://www.mango.org.uk


Here is a resource from the Charity Commission of England and Wales on Internal Controls http://www.charitycommission.gov.uk/publications/cc8.aspx

Checklist http://www.charity-commission.gov.uk/Library/guidance/cc8check.pdf
Checklist (Editable) http://www.charitycommission.gov.uk/Library/guidance/cc8_checklist.doc

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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