(Boise) – Attorney General Lawrence Wasden has wrapped up an investigation into the YMCA in Twin Falls and offered a series of recommendations to improve future management of the organization’s charitable assets.
Based on factual findings, Wasden says he has reason to believe the YMCA-Twin Falls violated Idaho’s charitable trust laws.
The report, issued Tuesday, identifies poor recordkeeping practices and problems with the organization’s charitable solicitation process. Specifically, the investigation showed that restricted donations were diverted for general operational purposes. The investigation did not find that any charitable trust assets were used for private gain or purposes.
In response to the findings, Wasden proposed five best-practice recommendations to help the organization and its board of directors. Wasden also praised the board for its cooperation during the investigation.
“The present board deserves credit for its level of cooperation and its commitment to making changes in ways that should improve the YMCA in every way,” Attorney General Wasden said. “This is an important asset to the community and the recommendations I’ve made are designed to make sure this organization can continue making a positive impact on children and families far into the future.”
Wasden and his Consumer Protection Division initiated an investigation earlier this year amid allegations the former executive director misappropriated more than $1 million in restricted donations between 2011 and 2016.
It was alleged that the executive director used money donated for specific projects, such as an indoor water park, to cover shortfalls in the operating budget. The executive director resigned in April, leaving the newly-elected board with scant financial documentation, especially details of donations to the organization.
The investigation also revealed poor record-keeping. Wasden said the lack of detailed financial records made it impossible to paint a clear picture of the organization’s financial history.
The proposed recommendations focus on steps the board should take, including:
- Increase its level of competency regarding fiscal administration, executive oversight and donor accountability;
- Implement policies and procedures to ensure contributions are used to further the charitable mission; and
- Retain a certified public accountant to organize financial records and prepare monthly financial reports for board approval.
“I appreciate the fact that the board is already taking many of these steps,” Wasden said. “I also think this investigation serves as a case study for all charitable organizations in Idaho and those who serve on boards.
“The lesson is that board members have an important oversight duty and responsibility to ensure charitable trust assets are being used appropriately,” Wasden said.
The board has also agreed to notify the Attorney General of any missing assets that are reported by the financial professionals working now to get the organization’s records in order.
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