With the economy being what it is these days, more and more youth sports organizations are being forced to deal with theft by board members or organizers.  In Ann Arbor, Michigan, a woman was charged with embezzling close to a million dollars from the hockey association where she worked as the bookkeeper. In this case, she wrote checks to herself and transferred funds into her bank account. Because of the stolen funds, the association lost its lease at the ice arena and could not provide any scholarships.

A survey conducted by the Association of Certified Fraud Examiners (ACFE) estimates that all organizations lose, on average, six percent of their revenue due to fraud every year (ACFE 2005). Applying this percentage to the non-profit sector would suggest that the fraud loss would be approximately $40 billion each year.

In most cases the person accused and/or convicted was a long-standing and “trusted” member of the organization. Truth being, they were living above their means - with a shopping, gambling or drug addiction. It is important for youth sports organizations to run more like a business and less like a family. Procedures should be put in place to restrict the opportunity to steal and to help people avoid even just the temptation.

Please see my Guidelines for Financial Management blog for some recommendations, and ask other organizations how they deal with these issues. Discussing it can help build awareness and better practices.