A is for Audit

Today’s post is brought to you by the letter A, for Audit.   If a certain Diocese only 30 days away from a management shakeup were a stock it would be trading down right now.  The CEO, CFO, and other senior management at any large firm telegraph their retirement plans in advance, like Sergio Marchionne of FiatChrysler who has let the shareholders know that he plans to retire in 2019.  Everyone knows far in advance so that everyone knows nothing unusual is afoot.  The Catholic Church does the same thing by requiring that Bishops turn in their resignation at age 75.  When a CEO suddenly resigns just months before such a date for “Personal Reasons” (And they don’t have stage 4 cancer) everyone knows that something is afoot and that it isn’t good.  Someone with the power of a CEO doesn’t retire a few months from the goal because of a condition they’ve had for 20 years or what they themselves call a minor procedure, especially if said leader was accustomed to spending an inordinate amount of time traveling to nice relaxing places anyway.  Instead they quietly delegate their work while running out the clock.  When the departure is abrupt the stock trades down because there is usually either a failure to execute the goals of the company or there is fraud.  And that’s a good analogy for a certain not-for-profit religion based entity that shall remain nameless.

We’re using a business analogy because we’re talking about how human nature interacts with power, authority, and publicity.   The abruptly departed leader is usually quickly replaced.  After that two things could happen:  either the firm admits the fraud and fills the position with someone who is informed of it and has the authority to clean up the mess or everyone acts innocent and the position is filled with an expendable fall guy.  The fall guy doesn’t have to be an idiot either, it’s just as well if one can sink a talented colleague or a competitor.  If you’re the new boss and you’re in on the ruse then you’ll need all the luck you can get if things were so bad that the previous boss relinquished power or was forced out in a humiliating way.  If you’re the fall guy then you’ve got to move fast but you’ve got some options and the best option is an audit.  The old advice to not change anything for one year will sink you in these situations because if fraud is uncovered a year into your term and you did not carefully document your effort to find it then you’re complicit and you’re sunk.

If we were in charge of a large not-for-profit corporation we’d start by interviewing every staff member (lay and clerical) in the last 30 years who held a high position and either resigned abruptly or left for new employment.  Everyone knows the score when someone resigns deeply disgruntled but never quite has a specific reason for the deep resentment, it’s because they can’t say it without accusing themselves.  The closer to the money the closer to the truth because it takes money to accomplish most fraud.  We’d be asking some tough questions like these: if people believed that the Corporation had kept two sets of books for many years (and there can’t be any good excuse for that) was it really only two sets?  If donors felt money was misdirected to become hush money did they pay by check or cash?  If two “employees”  had a suitcase full of cash and we wanted to know if it came from higher up the chain or from the weekly plate we’d wonder: was it all Benjamins or was it 5’s and 10’s?  If smaller branch offices deposited millions of dollars with the corporate office in the main city, as if it were a bank, shouldn’t they be alarmed if most of the money is gone?  If the funding drive brochures and one set of books can’t account for the disappearance of millions of dollars then where did the money go?  What will happen to all the people who handled money at the corporate office, and didn’t report fraud, if the depositors get wise to the scheme?  If you didn’t do it but you knew it happened and you didn’t report it who is really going to believe that you are innocent?  How does that affect your current and future employment?

When an audit comes anyone who is or was in the corporate office has to decide if they are willing to take a fall for the departing CEO, especially if he no longer has the goods to dish out.

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