Before the success of the book three cups of tea the company put in place many measures that will ensure that the organization fund are not misused in any way. Some of these measures are;
- The organization employed a competent chief financial officer who did her work with a lot of competence and integrity that it deserve, we are told in the case that the chief financial officer resigned her job after been frustrated by the management laxity to implement measures that will ensure stringent financial control, this demonstrate the competence and integrity of the financial officer.
- The organization also contracted the service of the external auditor to undertake the financial audit for the organization so as to ensure that any fraud and misallocation of the organizational fund are detected early by the auditor.
- The organization also put in place internal control through the financial officer to ensure that the organization’s resources are not misused by the employees.
These steps taken by the organization were adequate to ensure sound financial control but they were unsuccessful because the management was not committed to implement the policies. The CFO constituted adequate internal control so as to control the organizational expenditure but Mortenson was not willing to abide by it and defied it which led to financial misuse, the organization’s management also ignored the recommendation of the external auditor which included strengthening of the internal control this led to subsequent resignation of the CFO.
After the publication of the book the organization undertook financial audit of its activities in the year 2010 and 2011 in order to detect any financial misappropriation and also to detect any fraud that might have been committed by the employees.
The organization also put measures that will track down the expenses that are used by its overseas employees so as to ensure that the funds are not misused by their employees.
The board also entered into a formal working agreement with Mortenson in order to have control over his actions and have control over his expenditure.
The above measures were inadequate because the financial audit were not done regularly as it should have been done because they were only done on the year 2010 and 2011.The board of the organization was also not able to enforce its agreement that it made with Mortenson because it was agreed that Mortenson will donate to the organization the money he will receive as royalties but he did not obeyed the agreement and the board did nothing to enforce it.
The organization should have put it in agreement with mortenson on the issue of expense reimbursement so that they can go to the court and compel Mortenson to abide by the agreement in case he defaults in reimbursement. The organization should have also deducted the money that mortenson owe them from his salaries and allowances.
The organization was reluctant to enforce the compliance because Mortenson was the executive director of the organization and has a lot of influence over the board that was suppose to take the action. The organization board was also reluctant because it is Mortenson idea which led to the growth of the organization and the board was afraid to lose him.
Non-profit organization interacts with the public policy mainly by making the policy, affected by the policy, influence the policy or subject to policy. Central Asia institute makes their own policies for its day to day operation, for example they formulated their own policy of how to raise money by publishing a book and also how they spend the money they have got through donations.
Central Asia Institute is also affected by the policy that non-profit organizations are not required to make profit thus all their activities should be aimed at helping the society without making any profit that is why the organization opted to write a book instead of engaging in other business to raise money. The organization is also accountable to the public and their activities are closely monitored by the public that is why the allegation of misappropriation of the fund by the organization was reported in the newspapers which affected the operation of the organization.
Non-profit organizations also influence public policy through their activities. Central Asia institute influence public policy by providing education to the poor in Pakistan and other Asian countries which is in line with public policy of reducing poverty and also reduction of the gap between the rich and the poor.
The central Asia institute is also subject to the public policy, and that is why the attorney general started an investigation after the media report which showed massive misappropriation of fund by management. The attorney general ordered audit of the financial activities of the organization so as to know the truth which shows that the organization is under public policy of transparency.
The experience of the central Asia institute is not unique as we have seen in the recent past that management of many non-profit organization have misappropriated funds which has led to collapse of some of these organizations after the donors withdrew their support due to corruption and misuse of funds by the management.
Dramatic growth of nonprofit organization and increased publicity can help the organization to achieve its mission and vision as the organization will be entitled to enough resource to run its activities, for example the donations of central Asia institute raised from $867,148 in 2004 to almost $22 million dollars in 2011 due to growth and publicity. The management should have used the resource to accomplish its mission by building more schools.
Increased growth and publicity of nonprofit organization can also lead to its collapse if the management is no competent enough, because the management may misappropriate the money as it is the case of the Central Asia institute, and due to the publicity the donors will soon hear of it and withdraw their support which will lead to eventual failure.
REFERENCES
Vaughan, S. K., & Arsneault, M. (2014). Managing nonprofit organizations in a policy world. Thousand Oaks, Calif: CQ Press.
Werther, W. B., & Berman, E. M. (2001). Third sector management: The art of managing nonprofit organizations. Washington, D.C: Georgetown University Press.
Futter, V., Cion, J. A., Overton, G. W., American Bar Association., & American Society of Corporate Secretaries. (2002). Nonprofit governance and management. Chicago, Ill: Section of Business Law, American Bar Association.
Kennedy, L. W. (1991). Quality management in the nonprofit world: Combining compassion and performance to meet client needs and improve finances. San Francisco, Ca: Jossey-Bass.
