Booster clubs, nonprofits urged to fix accounting ways to stop thefts

Simple accounting principles — including eliminating exclusive finance control —could stop most embezzlement cases that have plagued area nonprofit programs for years, law enforcement officials said.

A former West Carrollton Band Boosters treasurer indicted last week of taking $65,000 from the organization is the latest example of a case involving fundraising money that disappears from a nonprofit’s treasury.

Lucas Sullivan of the Ohio Attorney General’s Office said it’s vital for charities and non-profit organizations to have separation of duties and measures in place that ensure multiple people are involved in verifying the accuracy of financial activity.

A rule change in 2012 by the state Attorney General’s Office required parent-teacher groups and booster groups to register and submit annual filings with that office, Sullivan said.

“The rule change was made to make certain these type of organizations, which often have significant assets, understood that they were part of the charitable sector,” Sullivan said. “These groups need to be mindful of the importance of internal controls and appropriate board governance approaches.”

Such transgressions might happen during a period of financial hardship for the individual, or out of spite, for revenge or because of addiction issues. Other times, the only explanation is greed, according to the AG’s Office.

Warren County Prosecutor David Fornshell said his office’s No. 1 rule when suggesting how organizations can prevent theft is: “Eliminate exclusive control to finances."

“As long as you put people in positions where they have access to funds, you can’t eliminate the possibility that someone is going to steal from you,” he said. “But ... in the half a dozen or so internal theft cases that I’ve handled that involve not-for-profit organizations, if you take five or six steps, you can prevent 90 percent of these thefts from taking place or catch it quickly enough to where it reduces the amount of your exposure and your loss.”

Fornshell said his office, in response to a series of high-profile embezzlement cases, first started outlining those steps in an hour-long training session for area organizations eight years ago.

The session also teaches what warning signs to look for, including “very common” traits of delayed tax filings and delayed reporting of necessary financial information, Fornshell said.

He pointed to the 2018 arrest of Renee K. Nichols, of Springboro, who stole nearly $180,000 while treasurer of Springboro Clearcreek Baseball Association between 2011 and 2017.

“The interesting thing is, she wouldn’t produce any of the (financial information),” Fornshell said. “They kept asking for the financials and she got creative because ... they gave her a credit card or debit card and they asked for the bank statements, so it was (a case of) delay, delay, delay, delay.”

Fornshell said what Nichols was doing was downloading the statements, converting a PDF file to a Microsoft Word file, editing the statements, converting it back to a PDF and then sending it to those who had requested it.

“It was just taking her so long because she was doctoring all the financials," he said. “When all was said and done, she had over a thousand unauthorized personal expenditures.” That included a Disney vacation, paying off her credit card bill and other expenses.

Lack of oversight by others have led to numerous cases in the Miami Valley over the years.

Melissa Heerdt of Beavercreek stole more than $29,000 from a Fairborn Cub Scout pack from 2011 to 2013. She was sentenced to 30 days in jail and ordered to pay restitution in excess of $29,000.

In the case of Sara Arseneau, the former executive director of the Lebanon Chamber of Commerce, who stole more than $20,000 from her employer by issuing herself 13 additional payroll checks from 2012 through 2015, the accountant couldn’t get documentation of certain things necessary to file taxes for the organization, forcing it to file for multiple extensions, Fornshell said.

“If your board hires accountants to do auditing and to file taxes, don’t have the accountants be reporting back to the director, have the accountant report to the board,” he said. That way, if there’s an issue, the board is hearing about it, not one individual controlling and possibly manipulating (it)."

Amy L. Wyatt-Brown, 48, the former treasurer of non-profit West Carrollton Band Boosters, was indicted this month by a Montgomery County grand jury on grand theft and theft charges for allegedly stealing more than $65,000 from that organization’s funds between Jan. 1, 2016, and June 29, 2019.

The theft was discovered by a Wyatt-Brown’s successor, who noted discrepancies in the organization’s finances after Wyatt-Brown departed the organization.

That’s the second time since 2016 that police have been asked to investigate possible embezzlement involving a member of the boosters. In 2016, then-treasurer Wyatt-Brown reported a member of the band boosters embezzled more than $10,000 from the organization, but that member was able to make restitution via a court-ordered diversion program without objection from the band boosters or the West Carrollton Police Department. As a result, the charges in the case were dismissed.