You’ve just joined the board of directors of a local charity, service agency, or non-profit. You’ve attended a couple of meetings, had some input, listened to what your other board members have to say and your photo and bio are on the “Our Board” section of the website.
You feel good. You’re giving back to your community by being part of something that matters, and you’re being heard. You’re helping to shape the future of an organization doing something that matters to you.
Providing that kind of community leadership is admirable, and we recommend doing it if you can. But there’s more to it. You have serious responsibilities, chief among them governance and oversight. Because when things go wrong, the board is accountable.
Take, for example, the recent sentencing of a former financial manager at the Elizabeth Fry Society here in Prince George. Rhonda Lee Bailey used two of the group’s credit cards to run up $240,000 for her own use and covered it up by falsifying business records.
She stole public funds, as Elizabeth Fry draws on provincial dollars to administer its programs, and money from donors who had no idea they were funding her vacations and online purchases.
An audit caught the problem, and once found out, Bailey admitted what she’d done. She was found guilty of fraud over $5,000 and sentenced to 2 ½ years behind bars. She must also make full restitution.
This was a particularly crafty crime, carried out by someone on the inside who knew how to manipulate the system. That’s why boards of directors are needed for agencies like Elizabeth Fry and others. The directors are not financially involved and have no loyalty to staff or management. They are there to represent the community and help guide the organization to be its best. In this case, financial oversight was lacking, and the crime was allowed to occur over a long period. Due diligence was absent. The board should take a close look at how this happened and how it oversees the organization’s numbers.
On a different note, we can look at Exploration Place. This situation does not involve any criminal activity, only mismanagement, and the only similarity between the two examples is the fact that the public is paying the price, whether through taxes or donations.
Exploration Place was once a family-friendly destination full of hands-on fun, busy thanks to the interest from local families and visitors. After a series of major renovations, it’s now a more science- and history-focused centre that, for some reason, has a full catering kitchen when it once had a popular daycare. This change has not worked, as the numbers show.
The alarm went off via audited financial statements, which found that as of the end of 2023, the society incurred a net deficit of $417,332 in 2023, with liabilities exceeding assets by $364,609. As of the end of the first quarter of 2024, the museum was showing $11,946 in revenue over expenditures, $55,324 lower than targeted. Operating expenses were expected to exceed revenue by $57,080 in the second quarter.
The figures “indicate that a material uncertainty exists that may cast significant doubt on the society’s ability to continue as a going concern,” the auditors wrote, and that says it best.
The board of the Fraser-Fort George Regional Museum Society approved the decision to move forward with adding a commercial kitchen, a business with one of the highest failure rates, without a proper business plan and put the project to tender without proper construction management. That should not have been allowed to happen. A major capital project went ahead before it was ready. Now Exploration Place is struggling, and the board is ultimately responsible for that.
Serving the community on a board of directors involves more than just showing up for meetings and smiling for the photo when something good happens.
It includes asking questions of the executive director and being more than a rubber stamp, approving what ever proposal they bring forward. It means being fiscally responsible and community-minded, and most of all it means being vigilant to avoid these kinds of losses for taxpayers and donors.
Correction: There are no unionized kitchen staff working at The Exploration Place. This editorial has been updated to reflect that, and we apologize for the error.
