[GNC] BotanyBayGardens nonprofit example, and why GnuCash does not suffice

[Michael or Penny Novack]

On 7/27/2020 4:50 PM, Dale Alspach wrote:
> I would not put much faith in requiring two signatures. It is unlikely that
> the bank is actually paying any attention to this requirement.  I learned
> this from a former bank employee who was on the board of a nonprofit I work
> with. In other words it is an internal control only.
>
Not quite.

You are perhaps confusing whether it would be caught at the time or only 
detected later. I am pretty sure that if an organizational bank account 
had a two signature rule and the bank allowed processing of a check with 
only one and this was a case of embezzlement, the bank would end up on 
the hook for it, not the organization (or their insurer).

Note that this might or might not be to the organization's benefit, 
especially if this check only a fraction of the total embezzlement. 
Quite often embezzlement cases are resolved with "deals", no or reduced 
jail time in exchange for getting money back*. But all parties must 
agree to such deals. Can be acrimonious. I speak from experience (an 
organization of which I was/still a member). One side "we want her to go 
to jail" vs the "but if we agree to the deal we recover another $100,000 
back".

In the case above, although no two signature rule, the (local, small 
town) bank agreed should have been suspicious and their part of it was a 
no interest loan for the period of probation during which the embezzler 
was slowly paying some back.

Michael D Novack

* You are perhaps thinking only of assets the embezzler has in his/her 
name. Not those the embezzler's spouse/family might be willing to part 
with to keep the person pout of jail. Or what the embezzler might be 
able to pay over time. Again in the above case, the family  knew 
something because measures taken that family assets NOT in her name. And 
they were unwilling to surrender them to keep her out of jail. 
Apparently not first time.