SOX and the Non Profit Arena 2834

  • I am a former Board member of a non profit organization with approx a 3million budget of Federal, State and Local funding. The current Board of Directors has had a personal agenda against the Executive Director, manager of the organization, and has recently fired her after 11 years. A local fundraiser was held last year which was supposed to be for client services. After the fundraiser, the Board, the select few with the personal agendas and the majority, chose to use the fundraised monies to purchase a heating/air unit for the facility. Monies from the mortgage loan were designated for building maintenance and repair, but the Board chose to use the fundraised monies anyway. The Executive Director filed a complaint with the States Attorney General. Other complaints were filed by clients of the program, as well as, myself. After 6 months of waiting, the States Attorney General pretty much said they only have two choices…we can shut you down or do nothing. They stated that since the monies used was not spent on things like a vacation by a Board member but was spent on the well being of the organization that they chose to do nothing. Two weeks later the Executive Director was terminated. In her termination letter, there were three or four minor reasons for dismissal…then they included that one of the reasons was because she filed a complaint with the States Attorney Generals office.
    So…there has never been any lawsuits regarding non profits and SOX in our state.
    After a lot of heartache, it is beginning to look like the Executive Director may only be able to get some severence pay and that’s it.
    Do any of you on this forum have any insight on how to dismantle a non profit board, when the click on the Board makes up the majority. Our grants are in jeopardy as the Board was so focused on dismissing the Executive Director that they did not contact the funders. The internal computer system has already been compromised by files being deleted, as the Board did not secure the information before they dismissed the Executive Director. They have and are still acting very careless. If the States Attorney General doesnt do anything and it seems that SOX isnt a foundation for anything…what can be done?
    Any input will be appreciated.

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