By Frank Newman on 13th October 2013
Theft from clubs is a significant problem. Millions of dollars have been stolen from clubs. Today, somewhere, someone is stealing club funds.
That somewhere could be your club. If your club does not have adequate controls and systems in place to detect and prevent fraud I guarantee it will become a victim sooner or later.
You wouldn’t believe the excuses I hear from people once they know they have been caught, but the most common reason is to fund a gambling addiction.
To fund a drug and alcohol addiction is another, but the reason may be as simple as they saw it as ‘easy’ money or thinking they would get away with it.
Sometimes they justify their theft by saying the club ‘owed’ them something extra for their time and effort. Some say they don’t think of the club as an individual – so there is no ‘victim’.
Whatever the reason, their problem becomes your problem if you make it easy for the thief to get their sticky hands on club cash and property.
Other reasons include being under financial stress at home – they may have lost their job and are not able to provide for their family as they may have previously.
When caught, most confess all. Some remain arrogant and defiant and try to keep the pretence going as long as others are silly and naive enough to believe their pleas of innocence.
And don’t think for a moment it’s only staff who steal. I have found committee members, even the spouses of committee members, helping themselves to club property.
I had a case where the wife of the President was accused of stealing money. The club’s accounts lady could not figure out exactly how much was taken and came up with three different figures. The President amazingly did not remove himself from the process and instead decided to make the loss the smallest of the three figures, which he then repaid. When committee members tried to raise the matter he bullied them into doing nothing by saying the matter had been dealt with and everyone had ‘moved on’. What was clear is that the president’s wife had ‘moved on’ with club money!
The matter still causes tension in the club today. I have put better systems in place to prevent it happening again, including protocols that require those with a vested interest in an issue to stand aside, and for suspect fraud to be reported to me immediately. Having good systems in place to deal with this sort of thing should it arise is critical.
Club officials have a responsibility to ensure that does not happen, and there are many ways to prevent it from happening. The simplest way is to give me a call. I will review your systems to make sure they are not an open invitation t theft, and we can take care of your club accounting needs.
Joanne Newman is New Zealand’s leading authority on club accounting and forensic auditing. She is the managing director of Club Accounting & Investigations Ltd and Smart Business Centre (Tauranga) Ltd