The recent arrest and arraignment of the wife of the Kidder Township Fire Chief continues a disturbing trend of embezzlement allegations on the part of employees and volunteers of nonprofit and municipal organizations in eastern Pennsylvania. Amanda Devine of White Haven was arraigned last month on charges of stealing nearly $33,000 from the Kidder Township Volunteer Fire Company. Police say she admitted writing out checks to herself for personal business.

In the past year, we have also seen these charges and allegations:Virginia Kunigonis of Pottsville, a former Schuylkill County employee, was charged by the U.S. Attorney's Office and has agreed to plead guilty to forging $410,435 in Schuylkill County Conservation District checks during a seven-year period and of using a district credit card to pay $41,751 in personal expenses.Rodnell Griffin, 67, executive director of the Hunting Park Neighborhood Advisory Committee in Northeast Philadelphia, was charged with withdrawing more than $85,000 from the organization's bank accounts and using the cash for personal and gambling expenses, investigators charged.Heather Belford, 30, of Lansdale, who was a troop leader for two scouting organizations, faces charges to taking more than $10,000 from the organizations for her personal gain, according to police.Nancy Tonkin, 67, of South Whitehall Township, pleaded guilty to stealing $854,000 from South Whitehall Township residents in Lehigh County while employed as the township's utility manager. She and her husband, William Tonkin IV, who was also charged but who cut a plea bargain with prosecutors, spent much of the money at local and New Jersey casinos, according to court testimony.John Campbell, 26, the treasurer of the City of Harrisburg, is accused by investigators of embezzling $8,500 from Historic Harrisburg Association, a nonprofit of which he was the executive director.Sheri Lopez of Wind Gap, who worked for the Lehigh County Conference of Churches, was accused of taking more than $300,000 from the nonprofit's clients. She was a program director for the nonprofit's Homelessness Prevention Program,And this is just the tip of the iceberg. There have been at least a dozen other charges of embezzlement in eastern Pennsylvania during the past year, and many of them involved either nonprofit organizations, which can ill-afford financial losses, or municipalities or their entities, which impact taxpayers.So, what can be done to stem this epidemic from continuing to spread?A recent report by the Association of Certified Fraud Examiners noted that fraud continues to be rampant. On average, organizations lose 5 percent of their annual revenue to fraud and embezzlement perpetrated by employees, the report noted. Nonprofit organizations, in particular, are susceptible to fraud due to the complexity of accounting. Additionally, with a still-recovering economy, some employees tend to rationalize stealing. All of this, combined with poor internal controls, creates an environment ripe for fraudulent activity, the report concluded.According to certified public accountants, whose job it becomes to sort out the sordid details of these embezzlements, the most important thing to do is to set the control environment. "Let everyone know, from the top down, that there are policies in place, and everyone must follow them," said Carl Ho, a CPA who advises numerous nonprofit organizations.Too often, Ho said, the top person sets a sloppy and unethical tone for the organization. Others feel they don't have to follow procedures either and start cutting corners, he said.He also gave these other common-sense rules:• Define clearly who is responsible for what and hold them accountable for compliance;• Implement physical controls by locking up important papers and equipment and using individual and unique passwords for computers;• If cash is involved, have at least two people count the cash together;• Have a second person reconcile bank accounts from an unopened statement.In a small nonprofit, Ho said, there may be one person who does everything. "In these instances, someone, such as a board member, should open the unopened bank statement before giving it to the bookkeeper or sole staff member," he said.According to Charlie Jones of the Accounting Today newsletter, there are some common signs that might tip off irregularities: Does the organization's controller tend to drop off invoices to sign at the end of the day? Are there employees who never take a vacation? Are their financial statements and bank reconciliations always late?Establishing an ethical tone for the organization, then following through with internal controls to double-check the handling of money will go far in putting the brakes on employee embezzling.BRUCE FRASSINELLI |

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