Soccer Club Embezzlement – Another Victim

What would happen if your club lost $80,000?   How would your nonprofit recover from such a substantial loss?  Unless your organization has a wealthy private benefactor, chances are the results would be devastating.  Ultimately, a club must either safeguard its finances immediately or end up as just another victim.

Last week, a new report of youth soccer fraud swept through the headlines.  This time, the president of the now defunct Dundas Soccer Club allegedly stole over $80,000 from his club’s account.  As is often the case with fraud and embezzlement, the reported theft spanned several years, from 2004 to 2007. 

According to sources the forms of theft ranged from exaggerated expense reports to stolen cashbox funds.  Former registrar Brian Maynard comented, "We owed a lot of money to creditors, and we weren't able to pay off all that was owed to them."  The club eventually went bankrupt. 

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This event, while unfortunate, is certainly not a new phenomenon.  Every month, another report of youth soccer embezzlement or fraud seems to surface.  One can only wonder just how many cases go undiscovered.  The time has come for clubs to start managing their club finances properly.  The time has come to take control.

Internal Controls – Checks and Balances:  There are several key internal controls which can greatly reduce a club’s embezzlement risk.  The most essential of these is a system of checks and balances.  One member of your organization should not have complete control of all funds which pass through the club.  By allowing a set or group of eyes to check specific line items within the financials, the club provides a basic level of financial protection previously unrealized.

For some additional ideas, check out this podcast by AllBusiness.

Internal Controls – Reconciliation Reports:  Club registrations (hopefully online) account for the majority of monies used by the club to continue operations.  Therefore, it is crucial that your organization has a meticulously detailed understanding of each program’s registrations and associated payment amounts. 

As this is a hefty financial task for any club staff member, organizations should actively seek an online management provider to bare this burden.  When searching for a provider that the club can trust, it is important to ASK QUESTIONS!  Find out just how comprehensive each provider’s reconciliation reporting is, and make sure their custom and stock reporting capabilities meet the needs of the club as well.  For more info check out Reconciliation Reports Eliminate Bookkeeping Nightmares.

Develop A Background Check Policy:  While there are clubs, organizations, and associations that mandate background checks for volunteer and administrative staff, many more do not.  Why?  With today’s technology, this process is a simple solution to club risk management.  Every club should develop a background check policy within the organization.  AYSO, for example, has instituted a detailed policy which it mandates throughout the national organization.  Click here to check it out. 

By posting the club’s background check policy on the club website, the organization provides an additional layer of safety to deter a potential club threat from attempting to infiltrate the organization.  To help simplify the background check consent process, the club can include a text box within their online volunteer registration, asking each individual to agree to a background check. 

The Administrator’s Side Note:  Custom questions within your club’s online registration are a “make-or-break” feature.  If your club cannot add/edit/delete questions within the registration process, then the time has come to start shopping for a new provider!

These initial steps are just the tip of the iceberg for protection from embezzlement or fraud.  It is your responsibility as an administrator to ensure that the organization’s funds are secure.  Take a couple minutes to read the following articles for additional ways to ensure that your organization does not become a victim. 

Embezzlement Strikes Again:  The Dark Side Of Youth Soccer
Protect your club from embezzlement:  The Value Of Youth Sports Crime Insurance
Treasurer Accused Of Stealing 80K From Florida Club

The Administrator wants you to weigh in on this unfortunate trend in youth soccer.  How can we as administrators further protect our finances from internal threats?  Post a comment below, send an email to Jon@bluesombrero.com, or call 404-835-0305.

Comments

[Coach Mike]

its a shame we even have to write about this, even the kids aren't immune to the bad guys....keep up the good work
mike

[Rob Smith]

Jon,

Thanks for bringing this issue to the attention of the youth soccer community.

One tactic that you did not mention which I believe would be a big help to preventing fraud is requiring the finances of any club to have an independent financial review by a local acounting firm. I would expect there would be local firms that would be willing to do this on a volunteer basis during their quiet season, such as the summer.

Complementing this requirement would be the club providing their financial results to the team managers before an annual meeting. Too many clubs view the financial information for officers or directors only. If you are asking teams to pay money to the club, then they have a right to know how the money is being spent.

Rob Smith
Silver Spring, MD