Where's the money gone?
It is often difficult to find someone willing to act as honorary treasurer for a voluntary organisation and Upper Slagbank's Over 60s Club was no exception. When the current treasurer died the club cast about for a new ‘volunteer’. The accounts had got into a bit of a mess and accounting procedures, if you can call them that, were a bit lax – but probably no more so than many other similar organisations up and down the country. Finally Peter was persuaded to take on the responsibility, although he was only in his 50s and held no professional qualifications.
Peter was a local man who now ran his own recruitment agency for top-flight executives. He used to work in a bank, so he knew about money, and he was well respected in the community. But life was about to take a turn for the worse for Peter. A few months after he became treasurer his home was repossessed by the mortgage company (business had actually not been going too well for a while) and his wife, surprised to find herself out on the street, left him.
Vera, the club chairwoman, asked him if in the circumstances he no longer wished to be treasurer, but Peter said it gave him some continuity and normality in a turbulent time and he was willing to continue.
The club held several fund-raising events each year and had income from membership fees and contributions to the costs of excursions. Its expenditure was on the outings themselves and the costs of speakers, entertainers, room hire and food and drink for evening meetings. The club also made donations to good causes. The management team (for want of a better description) met from time to time and there was the annual AGM.
Peter produced some figures on individual fund-raising events for the management team meetings and annual accounts for the club AGM, which were accepted without demur. The figures took the form of an income and expenditure account resulting in a net surplus or deficit. They did not show the bank balances or cash on hand.
After about 18 months William, the club's President, began to hear grumblings in the village about club bills not being paid. He had a word with Peter who explained that due to some confusion between the two club bank accounts some cheques had bounced, but Peter was sorting it out.
But things went from bad to worse until finally Vera and William demanded that Peter surrender all the books and records. A Tesco carrier bag full of jumbled receipts, bills, bank statements, cheque books and some cash was left on William’s doorstep next morning.
William went through these in a meticulous manner, preparing his own schedules of club receipts and payments over the period for which Peter had been their treasurer. Vera compared the bank statements to the accounts which Peter had presented to management meetings dealing with the fund-raising events. They were horrified to find that the club’s finances were in a most unhealthy state. On numerous occasions cash had been drawn from the bank – even in August when the club had no activities! In fact the only time no cash was being drawn from the bank seemed to be when there was no cash in the bank to be drawn.
Profits from fund-raising events had not been paid into the bank.
Amongst the receipts in the bag were two post office chits for the purchase of Peter’s annual TV licence – bought with club cheques.
The police were contacted and Vera and William made statements. William handed over the schedules he had prepared. Vera and William accused Peter of stealing over £7,000 from the club.
Following a police investigation Peter was charged with the theft of cash drawn from the bank on over 30 occasions, theft of profits from the fund-raising events which had not been banked, and fraud in relation to the cheques used to purchase the TV licences.
Peter denied any wrongdoing. He admitted the records were in a muddle but he vigorously denied any thefts. Indeed on occasion he had found it necessary to put his hand into his own pocket to meet club bills. It was because the club owed him money that he had used the club cheques to buy his TV licences.
There had been a lot of cash expenditures on this and that and he was not always given receipts. Because of the cash expenditures, which arose unpredictably, he did not bank the surpluses from the fund-raising events but retained a tin of club cash. He did bank ‘surplus’ cash from time to time.
He had not kept a cash book (and neither had the previous treasurer). The records had been in a mess when he first received them and, to his regret, he had muddled along without ever really getting a ‘grip’ on things.
I was instructed by Peter’s lawyers to see if the evidence did support the theft and fraud charges.
It seemed to me that there was evidence to show substantial cash expenditures and that the fact that the surpluses from individual fund-raising events had not been banked separately did not necessarily indicate those surpluses had been stolen.
In the absence of a cash book it was not clear how cash drawn from the bank had been spent. However it did seem, based on the annual accounts presented to the AGM by Peter, that he would have to have drawn at least some cash from the bank to pay those expenses which had not been paid by cheque.
It was not unreasonable to suppose that some of those expenses had needed to be paid in August, although there were no club activities that month.
William had prepared two sets of schedules. One set based on the bank statements, the other set based on the receipts in the carrier bag. There was at least one bona fide expenditure on the bank statement schedule which was not reflected on the other schedule – presumably because there was no receipt for it in the carrier bag.
Without a cash book it was not possible to exclude the possibility that there were further bona fide expenditures, which had been paid by cash, and for which the receipt had been lost (or never obtained).
In the circumstances I could not be sure that any monies had been misappropriated. Nor could I be sure whether, overall, Peter owed money to the club or they owed money to Peter.
When the matter came to trial Peter was acquitted of all the charges against him.
Names, locations and certain other details have been changed to protect the identities of those involved.