Crisis management – The case study: A financial controller gone rogue

We consider the case of a medium-sized UK-based charity, and their rogue financial controller. The charity has an annual income of a little under £1 million, but with reserves significantly boosted by having received a substantial legacy two years ago.

Last week, the junior payroll clerk messaged a long standing trustee to raise concerns about mileage and hotel expenses being claimed by the charity’s financial controller.  There seemed to be many more claims than trips in his calendar.  A quick check had also found that many receipts for building works to one of the charity’s premises made reference to the financial controller’s own home address, a substantial property that had been used to host the senior management team’s annual away days in recent years.  The financial controller is married to the current chair of the trustee board.

The CEO and a long-standing trustee confronted the financial controller about these irregularities. He broke down, started talking about gambling, meaning to pay everything back, and then walked out of the meeting saying he would speak to his lawyer.  His wife, the chair, later contacted the charity to say that he had checked into The Priory for the foreseeable future, and that she was stepping down with immediate effect.

In the days that followed, it was discovered that the financial controller had been paid his salary twice every month for the last few years, and no-one could find the organisation’s cheque books.

It looks like at least £100,000 of the charity’s income has been misappropriated, maybe more.

What now?