Improving the Accountability and Responsibility of Professionals and Volunteers of Non-Profit Organizations’ Staff

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Improving the Accountability and Responsibility of Professionals and Volunteers of Non-Profit Organizations’ Staff
Introduction
In the world today, there are thousands if not millions of non-profit organizations each with its mission and vision. Non-profit organizations (NPOs) are not normal organizations. They do not have financial aspirations and are led or driven by the change they bring or make to society. As indicated by Othman et al. (7), they seek to “serve a social mission or deliver public benefit, and there is no distribution of profits to stakeholders of the organization.” However, for the most part, because they are not profit-oriented, often, these organizations are led by people who have no vision and these individuals have been known to run such organizations to the ground. Othman and his colleagues assert that often, because NPOs do not have financial profitability as their ultimate goal, an “NPOs management team is often not as experienced or skilled as those or organizations with a commercial purpose.” Therefore, the majority of these organizations are run by managements that do not understand the values of accountability and responsibility of professionals. Abraham (2) writes that “in an organization that values informal relationships, voluntary participation and ‘niceness’, the idea of explicit accountability may be somewhat alien.” For NPOs, this statement holds a lot of truth because everything has to be done in a way that appeals to the donors. So, proper procedure can be ignored as people seek to attract more donors and funding. However, as indicated in the case under study, accountability is key to the success of any organization in spite of its goals. It is thus crucial for NPOs to ensure accountability is enhanced through their management and hiring process to help prevent the increasing cases of fraud and embezzlement. It is disheartening that people would seek to steal from organizations with an intention to better the lives of people or pursue an agenda that is for the greater good. However, everything starts with the management of such organizations. To deliver on the topic at hand, this article will be divided into several parts. Each of these parts will offer clear and deeper analysis of the matter at hand.
Historical Sketch of the Study/Problem
Lack of accountability is the root of all evil in all organizations. For NPOs, it often leads to closure or declaration of bankruptcy as was the fate of the Healing Arts Initiative (HAI). This organization had a great goal in mind and everything seemed to be working. However, a lack of accountability crept in and swept everyone under their feet. It did not take long for the organization to file for bankruptcy and all because of lack of accountability measures. Having been hit with a fraud and embezzlement issue, HAI could not recover as a lot of money had already been siphoned out. HAI is not alone in the cases of fraud and embezzlement of funds among NPOs. An expose from the Washington Post reported that there were more than “1,000 nonprofit organizations that have reported a “significant diversion” of assets since 2008.” The article continued to explain that “while some diversions involve legal exchanges, most are attributed to theft or embezzlement, sometimes leading to the loss of tens of millions of dollars to a single organization” (The Washington Post). For the case of HAI, the money that was siphoned out of the organization’s account amounted to $750,000. For the organization, this more than they could handle and after they were sued, nothing was left other than to declare bankruptcy.
An organization that allows embezzlement of funds to run for more nearly 5 years is one that is not keen on ensuring accountability among its staff members. The management of the organization wanted no part of conducting organizations to help uncover the real reason why there have been discrepancies in the finances. Here, two things emerge: the first one is the staff member’s unwillingness to act in accordance to the statutes of the organization; second, there is the management’s unwillingness to employ a culture that promotes accountability among the staff members. However, all the above point back to the issue Abraham (2) pointed out when he said that the “idea of explicit accountability may be somewhat alien” to a majority of NPOs. But, for the most part, accountability helps to hold the goal of sustainability intact. Without proper accountability, there can never be sustainability as the case of HAI confirmed. Filing for bankruptcy is the final nail in the coffin for organizations that promote or create an enabling environment for fraud to flourish.
For an organization that allowed fraud for nearly 5 years, the structure of accountability appears to have disintegrated. When Alexander Dyer was brought on board, her job was to find a way to salvage the sinking ship. However, in an organization that has dug itself deep into the abyss of fraud, it is not child’s play to undo what has taken root for 5 years. Her work and dedication to accountability led to her being threatened and later almost killed as she tried to follow the fraud trail. The introduction of Dyer showed a willingness of the management or board’s resilience to help solve the matter. However, it also showed a lack of commitment on their part to deal with the matter completely. What the action of the board showed was that accountability is not a one man’s job. The entire management team has to be sold on the idea of accountability if sustainability is to be achieved in NPOs. Unfortunately for HAI, the board was not ready for the radical changes that Dyer wanted to introduce especially if it touched on the money that was getting lost. Othman et al. (7) write that “internal controls, along with other financial control and management practices, can minimize the possibility of theft, fraud and mismanagement.” However, at HAI, the board had neglected to first enact any internal controls to shield and protect people like Dyer. Secondly, the board had failed to enact financial controls and appropriate management practices that could have helped ensure or led to the growth of a healthy organizational culture. In the end, life was almost lost and HAI declared bankruptcy. An unfortunate ending to an organization with a great vision.
Importance of Management or Leadership in Helping Curb Embezzlement or Fraud
It is true that there has been an increase in cases of fraud in NPOs. However, for the most part, the management is at the center of everything. Othman et al. (8) note that “a good internal control system and sound financial management practices are even more critical in NPOs.” However, these cannot exist without sound management practices as was witnessed at HAI. Where the management fails, evil grows and often, it becomes bigger than any change that comes in as Dyer came to learn.
One way that the management of an organization can help limit cases of fraud or embezzlement of funds from NPOs is by establishing cultures that grounded on integrity. Everything starts with the organizational culture the management establishes. At HAI, the organizational culture was not grounded on integrity and this made it possible for Williams to embezzle as much money as he could from the organization. Additionally, Dyer’s firing, as well as the lack of cooperation from the board, was something that pointed towards the lack of integrity in the management of the organization. Without a culture that promotes integrity, it becomes easier for staff members to veer off the vision and mission of the organization in pursuit of their own.
The management of any organization is crucial because it is responsible for deciding how an organization manages its finances. Financial management should not be left to the hands of staff members like Williams. It is the work of an organization’s management to make sure that funds are managed properly. Without oversight from the management, fraud cases can become rampant and in the end, a majority of NPOs will end up like HAI.
The management of NPOs are also responsible for making sure the organizations maintain their commitment to the organization’s mission. “To thrive, a nonprofit organization must develop – and adhere to – a clear statement of its core purpose” (Jonker and Meehan). Every NPO in the world claims to be mission-driven. However, along the way, many find themselves doing or driving towards missions or commitments that are not part of their early mission or purpose. The above is what is called mission creep. Mission creep happens when an NPO decides to venture into projects that are not in line with what its original mission is. “Mission creep can stretch an organization so thin and so far that it can no longer effectively pursue its goals” (Jonker and Meehan). In the private sector, it is common to see organizations diversify their business in the hope of maximizing shareholder value. Well, since they are profit-driven, this is allowed and is often lauded. With a clear purpose such as maximizing shareholder value, it is possible for these organizations to do everything in the hope of attaining their goal. However, for NPOs, there is often the lack of a clear purpose and this drives a lot of organizations toward paths that are loaded with controversy. With a management that is not keen on ensuring the attainment of the organization’s original goal, it is possible to get lost and repurpose or refocus the NPO. So, the management of an NPO is crucial in ensuring that they remain true to their original calling and not get swayed by all the noise and issues happening around them.
Methodology
The topic under study is based on the case study of HAI and how the management’s lack of accountability led to the near-death experience of a former chief executive as well as the NPO’s inevitable bankruptcy. The reason why this paper chose the HAI case was because the issues surrounding the incident that happened there help to inform on the topic at hand. Throughout the case, issues of professional accountability and responsibility, as well as the significance of these two terms in the management of NPOs, keep coming up. It is a case that fits the topic and one that helps inform on what needs to be done to help ensure NPOs are free from lackluster managements.
The management of HAI had created an environment that made it possible for fraud to happen at the organization. Additionally, it appears as if there was collusion between Williams and the board of directors because the circumstances of Dyer’s firing, as well as the timing, indicate that Williams was not alone. Having a management that is not only negligent but also a part of a grander scheme to steal from the organization is a recipe for disaster. The management’s failure led to the death of HAI even though the organization’s purpose appeared true and noble. In the end, bankruptcy came calling and Dyer almost lost her life. A management that oversees the near-death experience of a former chief executive is one that lost its way a long time ago. The lack of accountability measures in the organization meant everyone made their rules and Williams successfully operated under his own.
To help offer discuss the topic with a focus on the HAI case, this paper mainly used text that helped to offer more on the matter of accountability in NPOs. NPOs have been on the receiving end of a lot of fraud cases and one of the major causes of this is a lack of accountability. Accountability measures have been missing in a majority of these organizations and this has made it easy for individuals like Williams to embezzle funds at times with the help of the management. The lack of a clear organizational structure, culture, and controls in these institutions creates a perfect opportunity for individuals like Williams. So, this article borrows from other articles that appear to inform further on the issues experienced at HAI.
Improving the Accountability and Responsibility of Professionals and Volunteers of Non-Profit Organizations’ Staff
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