No organization is safe from internal theft, and performing accounts payable audits to determine the source of major accounting discrepancies can save time and money in the long run. Recently, Sookyeong Kim Sebold was sentenced for embezzling more than $800,000 from the non-profit she worked for as a bookkeeper.
According to the United States Attorney's Office of the Eastern District of Virginia, Sebold stole the funds between 2002 and 2005 while employed by the Korean Cultural and Freedom Foundation, based in Washington, D.C. She was sentenced to two years in prison, in addition to three years of supervised release and an order to pay $133,548 in restitution.
In 2012, Sebold was convicted on several tax-related crimes for failing to claim the income from the accounts payable theft on her returns.
The U.S. Attorney's statement noted Sebold had used the money, originally intended to fund programs dedicated to cultural exchange, for day trading, gambling and personal expenses.
The Chronicle of Philanthropy emphasized that non-profits must deal with embezzlement head-on. In order to recover, these organizations must discover the fraud through means such as an AP audit, and then follow through by firing the employee and bringing legal charges. This way, there is a chance they may get back the funds.
The news source claimed that this last step, retrieving stolen money, can be the most difficult for non-profits, which sometimes opt not to pursue the funds out of sympathy. However, a lack of action can open these establishments up to further abuses and allow embezzlers to move on to other crimes.
Audit solutions continue to be useful for business owners looking to uncover the source of employee misdeeds. The tools can also help facilitate better communication between workers, as they may reveal simple but costly mistakes like duplicate payments, which often arise from non-standardized accounting practices.