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My cheating boss
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16 May 2005

Dear F@W
My boss is nuts. We work for a nonprofit where money isn’t the only thing absent; ethics are in short supply as well. Some of her duties require my boss to interact with city officials. She went off on the City Manager last Thursday, accusing him of sabotaging our organization. In reality, I’m pretty sure she is using federal grant money to line her own Prada. Even though we receive enough grant money to provide our services, the money never seems to go where it should. My friend in bookkeeping says our boss comes in there all the time asking her to tweak the ledger. I want to do something but I don’t know where to go. Am I an accomplice to her crimes if I don’t speak out? Can I get the boot for telling our board of directors? Help me!
–Reva, Midwest

Dear Reva,
The irregularities that you describe are very serious indeed. According to the nonprofit laws of most states, an executive director has an overriding duty to pursue the organization’s best interests (the duty of care). The misappropriation of federal grant dollars shows a disregard of the organization’s welfare and interests because the grant will almost certainly be revoked once it comes to the attention of the grantor. The best response to such a problem is for the organization (acting through the board) to adopt and enforce adequate internal financial controls that cover policies governing the use of corporate resources. Failure to do so could result in the executive director being held personally liable for her breach of the duty of loyalty to the organization, or by the other directors for breach of their duty of care in permitting such conduct to go unchecked.

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