Operating Above Its Financial Skill Level Not Good for This Nonprofit

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June 18, 2014; KRBD­–Ketchikan

NPQ has a lot of empathy for new organizations that misunderstand the level of skill they need to do decent financial management, but it is important to learn your lesson the first time you realize that you may not have the hands on deck that you need to manage to the requirements of a nonprofit with a big grant or contract.

In Alaska, the Ketchikan Gateway Borough Assembly wants to know what happened to one of its grants to OceansAlaska, which is a shellfish seed producer. The Assembly made a two-year operating grant of $338,000 to the group, as well as a $50,000 grant that was to be used for a business plan and a schematic design for the facility’s future operations. But according to OceansAlaska’s new facility manager, Steven Lacroix, only $6,000 of that $50,000 grant was spent on what it was meant for.

“As near as we can determine, and we’re fairly confident of it, and we have the bookkeeper here to verify it, it was spent on operational costs, instead of on what it was designed to be spent.” he said.

A local bookkeeper who is reviewing the situation has said that the filing system was inadequate and that some of the receipts and even checks are not easily located. “Every day I come upon new receipts,” she explained. “Where I don’t have receipts, I have vendor names and I’ll be contacting vendors if that’s the shortest way to get to those receipts. What I’m attempting to do is make sure that the receipts that were given were correct. To be quite honest with you, checks were written and appear to have not been sent so I can’t find those checks. Not huge checks, but checks were written to pay bills, which made them reimbursable, but the checks were not mailed.”

All of that means that the situation will take time to untangle but no one is alleging malfeasance—even the bookkeeper, who is quoted saying, “My initial review was that somebody was operating way above their skill level. And stuff happens.” She added her opinion that the new board and staff at OceansAlaska wanted to move forward with the mission, which is to enhance and improve the shellfish industry in Alaska.

According to this article, “shellfish farming is important to the future of the shellfish industry, and a source of shellfish seed is a key part of the process.” Eric Reimer, now on the board of OceansAlaska says, “You look at the salmon industry here in Southeast, and the only reason we have a sustainable salmon fishery is because of the hatcheries. As far as shellfish goes, there’s farms out there…and there’s going to be a lot more of them coming online, especially after OceansAlaska gets up and running.”

OceansAlaska still needs to have the Assembly approve its invoices for the current year, which it appears inclined to do with the reassurances of the bookkeeper, but the members made it clear “that they would want answers, a good plan for the future and a lot of checks and balances installed before they would consider approving funds for next fiscal year.”—Ruth McCambridge