Nonprofit board members to receive financial training amid Just Food scandal
Board members of local nonprofits will gather next month to receive a crash course in financial accountability.
The United Way of Douglas County and the Douglas County Community Foundation are sponsoring a free seminar Oct. 15, at the Lawrence Arts Center, where board members will receive training about their duties as it relates to their nonprofits’ finances.
The seminar was organized weeks after former mayor Jeremy Farmer resigned from his position as executive director for Just Food, the largest food bank in Douglas County. It was discovered the nonprofit had failed to pay about $61,000 in federal and state payroll taxes while Farmer served as executive director.
Farmer resigned as mayor two days after he stepped down from Just Food.
The incident has led to conversation in Lawrence’s nonprofit community “about the importance of board members understanding the financials of their organization,” said Marilyn Hull, program and communications officer at the Douglas County Community Foundation.
“I think the vast majority of organizations in our community operate very ethically, so I don’t see this as a widespread problem. But at the same time, we see it as an opportunity to remind board members what some of their duties are,” Hull said. “We want to make sure all board members understand they do have a fiduciary role.”
Though the program is designed for nonprofit board members, anybody can attend, Hull said.
Michele Hammann, a certified public accountant and certified valuation analyst with the Lawrence accounting firm Summers, Spencer & Company, will instruct what board members should look out for in financial documents such as profit and loss statements and basic balance sheets, said Erika Dvorske, president and CEO of United Way of Douglas County.
Phil Kosmala, co-founder and chief investment officer of Chicago-based consulting and research firm Taiber Kosmala & Associates, LLC, will also deliver a presentation.
“Most nonprofit staff don’t have financial backgrounds, that’s just not why we came to these professions,” Dvorske said. “What we hope is that board members walk away with enough foundational knowledge and ability to carefully consider the information they’re seeing on a regular basis.”
After Farmer’s resignation in August, the Just Food board of directors determined Farmer intentionally misled board members.
Kristi Henderson, the board’s president, released a statement saying the board “was shocked and disappointed” to learn that Farmer had circumvented internal control procedures.
On Wednesday, representatives of the Just Food board told the Journal-World that their own investigation alleges Farmer made $52,000 in unauthorized payments to himself in a two-year period.
Farmer could face criminal charges. Board members asked their attorney to forward their findings to law enforcement.
Just Food representatives allege Farmer manipulated the nonprofit’s financial records to conceal overpayments and to hide that he had ended services of the organization’s professional accounting firm.
Hull and Dvorske said that, among other things, the October seminar will teach board members what questions to ask of their nonprofit’s staff.
“Nobody is ever going to be able to detect things that have been altered or when deception has occurred,” Hull said. “Board members can’t always tell by looking at financials, but they can try to educate themselves and understand it’s important to ask questions and seek other advice when there are questions they aren’t getting satisfactory answers to.”
Registration for the seminar begins at 3:30 p.m. Oct. 15, and the program will run from 4 to 5:30 p.m. A reception will follow.
To register online, attendees are asked to go to unitedwaydg.co.org/calendar by Oct. 13.