In this file photo from 2011, Jeremy Farmer is shown in his role as executive director at Just Food, 1200 E. 11th Street.

An audit of the food bank Just Food has determined the nonprofit’s board of directors lacked several key financial controls that likely made it easier for former executive director — and former Lawrence mayor — Jeremy Farmer to allegedly bilk the organization for about $55,000 over a three-year period.

The Lawrence-based auditing firm Summers, Spencer & Company found the Just Food board lacked proper procedures for a variety of issues ranging from payroll duties, cash management and reconciliation of bank statements.

“It is a cautionary tale,” said Will Katz, vice president of Just Food’s board of directors.

But Just Food representatives on Friday said the board has taken action to improve the controls, including hiring Lawrence-based accounting firm the McFadden Group to conduct payroll, cash management and other functions.

“What I would say is that this isn’t a case of the board simply not paying attention,” Katz said. “We were paying attention, but outside professionals need to be engaged by the board, and the board needs to have contact with those outside professionals.”

Lawrence attorney Dan Watkins, who is representing Just Food, said a large part of the issue is the board believed an outside accounting firm was working for Just Food, but Farmer allegedly fired the firm without the board’s knowledge and then presented monthly financial statements that made it appear the firm was still in place.

The end result is a finance committee of the board now has regular, personal contact with McFadden’s office.

“I have biweekly contact with the accountant now,” Katz said.

Among the key findings from the audit or from information disclosed by Just Food representatives on Friday:

• The board lacked a system of checks and balances on cash management. Farmer was allowed to receive, deposit and record all cash receipts. He also was allowed to sign checks up to $1,000. The board has now established a separate post office box for all cash payments to be sent to the organization. Only designated board members can access the post office box, and the cash is taken to the accounting firm for processing.

• Bank statement reconciliations were not being prepared by the organization, and therefore weren’t being reviewed by board members. The board has adopted the procedure that monthly bank reconciliations will be performed by the accounting firm, and the finance committee of the board will review the documents.

• Receipts for multiple expenditures were not present. The board has adopted a policy for record keeping of receipts and other materials.

• Controls for monitoring electronic payments were not in place. Just Food representatives on Friday estimated more than 90 percent of the alleged fraud took place through electronic payments rather than traditional checks. Watkins said Farmer was improperly making electronic transfers directly into his personal bank account, then masking those payments on the records he provided to the board.

• The board is now estimating that about $54,000 in funds were misappropriated from 2013 to 2015. That’s up from about $52,000 previously estimated by the board. Watkins said the board did discover additional alleged acts of fraud including Farmer making car payments, insurance payments, and an unauthorized office lease payment with Just Food funds. An exact total won’t be determined until an audit is completed for the 2015 financial year.

No criminal charges have been filed against Farmer, but Just Food officials said they are continuing to cooperate with law enforcement authorities. Watkins said the recently completed audit will be turned over to law enforcement officials. Watkins declined to say what law enforcement agency he is working with, but local law enforcement officials previously have said they are not investigating the matter. It has been presumed that federal law enforcement agencies are investigating the matter, as the alleged activity involves filing of false federal tax returns and several other matters that federal officials would have jurisdiction over.

Katz said Just Food is now on firm financial footing, although it is continuing to seek funding from the public and granting agencies. He said the nonprofit has about $90,000 in the bank, which is more than three months of operating expenses.

He said the board is continuing to evaluate whether it will seek funding support from the city of Lawrence or Douglas County in the future. He said if the group seeks funding, it won’t be because of the financial issues related to the Farmer case. The board previously conducted a successful fundraising campaign that generated almost $80,000 to pay off the organization’s tax liability

“I was very concerned about donor fatigue setting in because we really have asked people to step up in a big way,” Katz said. “The board has been really pleasantly surprised at the continued amount of support.”