Nonprofit CFO fired after gambling with $3.6 million

I came across a really neat blog today run by Mike Burns called Nonprofit Board Crisis. The website pointed me in the direction of this story in the San Francisco Chronicle:

The chief financial officer for the nonprofit that runs the recently opened, 800-car underground garage next to the M.H. de Young Memorial Museum in Golden Gate Park has been fired as investigators probe the disappearance of $3.6 million in garage funds - money that may have been flushed on the stock market.

The missing millions came to light a couple of weeks back when a vendor called the chairman of the Music Community Concourse Partnership board to complain that he hadn't been paid for his work on the garage, which opened in 2005, said Sam Singer, a spokesman for the nonprofit.

When garage chief financial officer Greg Colley was called in to explain, he asked for a little time to sort things out, Singer said. The next day, Colley turned up with an attorney and said he had borrowed the money to play the stock market, Singer said. Colley said he had fully intended to return the money, but then the market took a nosedive.

With that, the nonprofit fired him, Singer said.

In situations like these, you have to ask how the hell the Board of Directors allowed this much money to be "borrowed" without a proper internal control process.