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

[Dale Alspach]

I am not confused. Here is a link to a CPA's site explaining the issue
http://www.otcpas.com/advisor-blog/dual-signatures/#:~:text=By%20requiring%20two%20signatures%2C%20the,checks%20to%20a%20fictitious%20company.
Dale

On Tue, Jul 28, 2020 at 11:24 AM Michael or Penny Novack <
stepbystepfarm at comcast.net> wrote:

> 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.
>
>
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