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February 4, 2010; The Examiner | In San Francisco the 40-year-old Economic Opportunity Council is trying to prove that it has cleaned up its management systems. This very large agency providing child development programs among other services was found in a recent audit to have mismanaged more than a half million dollars in public funds and, as a result, $159,000 in stimulus funding was held back as of last November. The agency apparently violated the public’s and the California Attorney General’s sensibilities in a number of ways including (according to a letter from the mayor’s office) by losing one child on a field trip, and locking up for the night with a child still in the building, and (according to the audit) holding a board retreat at a casino. There will likely be less and less tolerance for this kind of transgression among regulators. California Inspector General Laura Chick said it was important to use the EOCSF story as an example for other agencies that may stray from proper management practices. “One reason I wanted [the EOCSF’s] story blasted out there was to be a deterrent to other nonprofits,” she said. “Don’t go having your board meetings in casinos. Don’t charge coffee and water and Kleenex to the public trust. Be impeccable in how you’re spending the public’s dollars.” As we have noted elsewhere there is always a specific item or two that stands as a proxy for larger misspending when a story like this hits the papers. In this case it’s the Kleenex. Says Chick, [adhering to the public trust means that] “everyone brings their own Kleenex!” (By the way, I can recall at least two of my former nonprofit employers that bought plenty of Kleenex). Meanwhile in Jefferson County, L.A. a clinic has run into a public buzz saw over misspending there. These two organizations evidently deserve to be brought up short and leadership held to account but NPQ also figures that higher levels of scrutiny will sometimes accompany emptier public coffers and that regulators and funders may see this as a fine time to cull the herd or at least make an example. NPQ also was not born yesterday and cautions that even the best run organizations can get caught in audits born more of politics than honest concern.—Ruth McCambridge