Expert Advice

Nonprofit Accounting: Report a Co-Worker Who's Ripping Off the Organization?

| Updated August 13, 2018

Embezzlement at your nonprofit — what to do

Nonprofit experts Gary G. Godsey, executive director of the Association of Texas Professional Educators, and Kathryn Engelhardt-Cronk, MissionBox co-founder and CEO, have teamed up to create MissionBox DoubleTake — a column that offers opinions about the peskier aspects of working in the nonprofit sector. The opinions offered here are based on the authors' personal nonprofit experience and may not reflect the opinions of MissionBox, Inc. These opinions should not be considered legal advice or used as a substitute for professional legal consultation. MissionBox readers are invited to submit alternative responses, which may be published here as well.

I work for a large nonprofit that provides reimbursement for work-related mileage and meal expenses. I discovered that one of our case managers, who also happens to be a new friend, is heavily padding her expense account. I couldn't believe my eyes when I saw a recent expense request on her desk. I knew it was incorrect since I share an office with her and see when she comes and goes. To me, this is stealing — but maybe I'm being too judgmental. I want to stay friends and be a good co-worker. Should I report it?

Gary says …

You're right. Stealing is stealing, no matter how you define it. This one cuts straight to your personal moral core. Either you believe stealing is wrong or you don't. In this case, you should tell your co-worker what you observed and how you feel. Confirm that her expert report isn't correct. Encourage her to clean up the report and come clean about her indiscretions.

Stepping into this situation will no doubt harm your relationship going forward. Once you call her out, there's no way your relationship will ever be the same. That said, this one falls directly on you. You must examine your personal moral fiber before deciding whether to take it to management. Once you do, the die is cast.

Kathryn says …

According to a 2013 survey by Kessler International, more than 30 percent of service employees cheat on time and expense reports, so you're not alone in making such an upsetting discovery about a trusted co-worker. Somehow, since we work in a nonprofit environment, we expect people to behave better than those in the corporate world. Unfortunately, though, stealing is a problem in both for-profits and nonprofits.

There's no arguing with Gary's ethics. As he said, you can't ignore this behavior. This being the case, I think you have several options.

You might try talking to your co-worker/friend — but only if you feel willing to give her a chance to immediately amend her expense report, with a promise to never falsify it again. Your intervention may help her see the light and mend her sticky-handed ways (though it's a long shot).

Or it may be time to become a whistleblower. Anonymity can be particularly helpful here. Sometimes managers feel reluctant to discipline or terminate otherwise good employees based on "fudged" reports. (It doesn't make sense, but it's true.) She could well continue being your co-worker and sharing your office. Why should you be put in an uncomfortable position because of her behavior?

Another option would be to suggest to your manager that the organization audit everyone's expense accounts. Your pilfering pal will get busted and management will likely find that she isn't the only one at that game.

In any case, this co-worker isn't likely a friend you want to keep or a staff member who's valuable to the organization.

MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.

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