Little League embezzling not hard to do, accountant says [Fort Worth Star-Telegram]
(Fort Worth Star-Telegram (TX) Via Acquire Media NewsEdge) Oct. 08--Parents involved in two Dallas-Fort Worth sports teams were stunned recently to learn that women they trusted had been accused of stealing money from their kids' teams.
When Claudia Yamell Castillo, 34, was arrested in September and accused of embezzling $23,113.62 from the Southeast Arlington Little League during her time as board president, the league was forced to cancel its fall season due to debt. The story had a happy ending thanks to donations from the Texas Rangers.
One week prior to Castillo's arrest, Anna Eufemia Martinez, 45, pleaded guilty to a third-degree felony for embezzling $23,469 during her time as the Crowley Independent Soccer Association president.
But the parents involved in these two cases, and others like it, instead of getting and staying angry, should get involved and look at the team or league they are running as if it were a small business, an attorney and a certified public accountant said.
"When you are handling other people's money, and handling it to the benefit of a bunch of kids, you are obligated to do just that," attorney Chris Lyster said.
Lyster, who works for Shannon, Gracey, Ratliff & Miller, LLP, volunteered with the Fort Worth Youth Soccer Association for nearly a decade. Lyster held roles like treasurer, president and tournament director.
The soccer association, which has an annual budget of $250,000 to $400,000 for field rentals, referees, maintenance, lighting, and other expenses, has a hired administrator and a volunteer treasurer overseeing funds. Because the nonprofit has so many volunteers throughout the year, they found a person who can provide continuity and is "honest as the day is long" to deal with the administrative functions, Lyster said.
"It's a tough deal, because you're in these volunteer situations where you've got a lot of good-meaning people who got put on the board of something frankly because no one would," he said.
Board members from both the Arlington and Crowley nonprofit sports organizations claim their ex-presidents were able to juggle the money in the way they did because the women were the only ones with access to bank information.
Jerry Cross, 44, brought Martinez' case to the Tarrant County district attorney in early 2011 after he took over as president. He said board members noticed bank deposits were short of registration dues, bank records did not add up, and when he approached Martinez to give him access to the account she "repeatedly snubbed her nose."
"I know, with the close relationships everyone has and the tension it created..." Cross sighed. "In a small town you hear rumors, and there were rumors...."
Martinez accepted a plea bargain in state District Judge George Gallagher's court. Her deferred adjudication sentence requires her to complete five years of probation and pay off the $19,469 she still owes to the association to keep it off her record.
As odd as the cases may seem to the community, embezzlement from nonprofits happens more often than reported, said certified public accountant Christi Stinson.
Stinson, who owns her own practice, CH Stinson CPA, works exclusively with nonprofits and she advises board members to understand their fiduciary responsibility.
"When you are dealing with other people's money, it's a trust; that's what fiduciary means. You need to deal with the situation with healthy skepticism. Have accountability and reporting," Stinson said.
Two people need to count the cash that comes in, Stinson said. Keeping track of that isn't always easy, but receipts must be provided for every transaction, she added.
Cash isn't king
Lyster also recommended that at least two members sign off on checks and that records go to an outside accountant for tax purposes.
The Fort Worth Soccer Association has a couple thousand players on its various youth teams. Now all registration is done online so that the system does all the hard work for the members. "It's like magic," Lyster said.
Current Crowley board president Bruce Farneti, 39, said the Crowley Independent Soccer Association bylaws have always required two people to sign off on purchases, but Martinez never gave the new treasurer account access when she became president.
Farneti said he, current treasurer Brian Kracja and registrar Crissy Smith now look over all income, especially registration dues. The entire board receives a financial report from Kracja and logs are compared to track registration and cash records.
What people need to understand is that nonprofits are like a businesses, she said.
"You don't want to question people, especially your friends. So if you plug the holes with good policies and procedures. You don't make it personal," Stinson said.
"That's what an auditor does. We say, 'This isn't about you. It's just the questions we need to ask,'" she said.
Monica S. Nagy, 817-390-7792 Twitter:@MonicaNagyFWST
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