MArch - April 2010

Issue TwoVolume Eleven

FAR’S SECOND MEMBERSHIP SURVEY

MARK YOUR

CALENDAR(and read in advance)

March 24, 2010REGULAR MONTHLY MEETING,

11:15 a.m. to 1:30 p.m. at Sun-Trust Bank, 1445 New York Av-

enue, NW, 9th Floor, Washington, DC 20005.

“State of the Non-Profit Sector,” Alan J. Abramson, Ph.D.,

George Mason University and Senior Fellow, Aspen Institute.

April 28, 2010REGULAR MONTHLY MEETING:

“Hot Topic in the News”

May 19, 2010REGULAR MONTHLY MEETING: “The Effect of Audit Standards on

the Non-Profit Industry”

IN THIS ISSUEChair’s Column 2February Program Summary 4Member Profile – 6 Craig Ross January Program Summary 7Member Profile – 9 Martha HulseMarket Update 10Table Talk 11Member Profile – Mindy Saffer 13Member Profile – 16 Jim McGarryPreventing Embezzlement 19

In January 2007, FAR’s leader-ship with Chris Busky serving as chair, surveyed its members to

determine how FAR should evolve and how it enhances the experience of FAR membership. As the chair of that 2007 Strategic Planning Task Force, Lou Novick wrote, “No membership organiza-tion can engage in thoughtful strategic planning on the prem-ise that the leadership is so representative of and in touch with the membership that they alone can be relied upon as the proxy voice of member needs and preferences.”

The results of the 2007 survey were gratifying. Over 54 percent of our members responded to a rather lengthy survey conducted by Veris Consulting, LLC, who crafted the questions and administered the

online survey. And the board of directors has implemented many of the things that members said they wanted: breakfast meetings, electronic newsletters, a better website with e-commerce capabili-

ties, to name a few.Past chair Craig

Silverio is leading the 2010 efforts to again “take the pulse of the membership.” By the time this newsletter reaches you, you should have received the current survey by email. We

urge you to complete and return the membership satisfaction survey at your earliest possible convenience; it is expected to take no more than ten minutes of your time. Your answers are confidential, and only those Veris employees tabulating the results will see individual responses.

FAR’s nominating committee, chaired by FAR Past Chair Craig Silverio, is beginning its

work for the season. FAR members will be electing four regular mem-bers and one patron (for profit) representative to serve two-year terms on the board of directors. While serving on the board takes some time, the board generally meets every other month prior to a FAR luncheon and holds a summer retreat.

FAR NOMINATIONS PROCESS UNDERwAY

If you are interested in serving on the board, please email Craig Silverio (craig@pmmi.org) or the FAR office (farhqtrs@aol.com), stating your desire to be a candi-date. The committee will follow up with those who respond to get additional information as needed to put a slate together.

The ballots will be mailed to all members in mid-April and will be due in mid-May. So watch your mailboxes for ballots in mid-April.. . .

UPDATED

. . .

2

CHAIR’S COLUMN

LEFTOVERS...

“Why don’t you use that creative genius of yours, Spurgeon, to make this Association some MONEY!”

2009 - 2010 Board of DirectorsFinance & Administration Roundtable

Thomas Nordby, CAE, Chair National Defense Industrial Association 2111 Wilson Blvd., Suite 400 Arlington, VA 22201-3061 Phone: 703-247-9461 Email: tnordby@ndia.org

Craig Silverio, IOM, CAE, Past ChairPackaging Machinery Manufacturers Institute 4350 N Fairfax Drive, Suite 600 Arlington, VA 22203-1619 Phone: 703-243-8555 Email: craig@pmmi.org

wes Tomer, CPA, Vice Chair Veris Consulting11710 Plaza America Drive, Suite 300 Reston, VA 20190 Phone: 703-654-1450 x1457 Email: wtomer@verisconsulting.com

Patricia Adkins, Secretary Home Safety Council 1250 I Street, NW, Suite 1000 Washington, DC 20005 Phone: 202-330-4905 Email: patricia.adkins@homesafetycouncil.org

Susan Staton, CPA, Treasurer Association of American Universities 1200 New York Avenue, NW, Suite 550 Washington, DC 20005-3928 Phone: 202-408-7500 Email: susan_staton@aau.edu

David Akridge, DirectorAmerican Inns of Court Foundation1229 King Street, Second FloorAlexandria, VA 22314Phone: 703-684-3590Email: dakridge@innsofcourt.org

Yasamin Al-Askari, DirectorSunTrust Bank1445 New York Avenue, NWWashington, DC 20005Phone: 202-661-0641Email: yasamin.al-askari@suntrust.com

Mary S. Bowie1501 Crystal Drive, No. 732Arlington, VA 22202202-362-0865Email: mary.bowie@comcast.net

Kristen L. Conte, Director Eugene & Agnes E. Meyer Foundation 1400 16th Street, NW, Suite 360 Washington, DC 20036 Phone: 202-552-7450Email: kconte@meyerfdn.org

James N. May, CPA, Director 1615 Manchester Lane, NWWashington, DC 20011Email: jamesnmay@hotmail.com

Robyn L. Morriss, CAE, Director Reinsurance Association of America 1301 Pennsylvania Avenue, NW, Suite 900 Washington, DC 20004-1701 Phone: 202-638-3690Email: morriss@reinsurance.org

Michael Tryon, CPA, Director Tate & Tryon 805 15th St., NW, 9th Floor Washington, DC 20005 Phone: 202-293-2200 x 305 Email: mtryon@tatetryon.com

FAR Roundtablec/o JMP Productions

6277 Franconia RoadAlexandria, VA 2310-2510Phone: 703-971-1116Fax: 703-971-7772Email: farhqtrs@aol.comWebsite: www.FAR-Roundtable.org

Editor—Jack Pitzer/Assoc. Editor—Dixie Kennett

FAR kicked off 2010 with the January program, “Internal Control Essentials for Financial Managers”,

which drew a full house mainly because of the always relevant topic of internal controls. In the post Sarbanes Oxley era, and the recent increased documenta-tion requirements of the new Form 990 in relation to all your current internal policies, it’s never been more important to have solid internal control proce-dures in place at your organization.

The February program, “Technology Risk and Security Around E-Commerce,” was a very timely topic as we all run modern day association businesses with significant e-commerce based self service offerings to our respective mem-bers, customers, and overall constitu-ents. Making a strategic commitment to business automation in all areas of your organization makes for smart business these days and may even let you grow your business while not necessarily increasing your staff size. At my organi-zation, The National Defense Industrial Association, we have over time been able to do just that, by doubling our business volume from $15 million in 2001 to $30 million today, with the same staff size of 65-70 people. In today’s business environment where we increasingly rely on online interactions and communication with our members,

the question of managing your technology risks is an overall key strategic asso-ciation manage-ment issue, not simply an IT issue.

Looking ahead to March 24th, we are excited to offer the annual “State of the Non-Profit Industry” program, where in particular we’ll be looking at how the financial struggles of the global economy have impacted all of us in the not-for-profit world. We also have a very special program planned for April 28th, and it will be held at The Washington Club in Dupont Circle to accommodate an anticipated larger audience as we are working to secure a high profile speaker.

You should recently have received a copy of our annual membership directory, I highly recommend you use it heavily as it is a great resource for networking and business contacts. You also have access to the same contact information online in the member only area of www.far-roundtable.org

Look forward to seeing you at the luncheons.

Regards,Thomas Nordby, CAEFAR Chair 2009-10

3

SOLIDRELIES ON HARD WORK

NOT GUESSWORK

Your success is our success. Period.

Your success is not a matter of chance. It’s the result of your own hard work and sacrifice. SunTrust can help protect that success. By taking the time to talk with you — and listen to your objectives — we can truly tailor our solutions to your individual needs. In many cases, we can even provide you with an unbiased, in-depth analysis of market trends and peer comparisons through our proprietary research and Strategic Review process. Because when you get right down to it, we only succeed when you do. Let us help you achieve your vision. Call Yasamin Al-Askari at 202.661.0641 or visit suntrust.com.

Deposit products are offered by SunTrust Bank, Member FDIC. Financing and credit services are subject to standard credit criteria. Debt and equity capital raising provided through SunTrust Robinson Humphrey. SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member NYSE, FINRA and SIPC.

© 2009 SunTrust Banks, Inc. SunTrust is a federally registered service mark of SunTrust Banks, Inc. Live Solid. Bank Solid. is a service mark of SunTrust Banks, Inc.

Treasury and Payment Solutions Financing Solutions Advisory Services Debt and Equity Capital Raising

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(continued on page 14, February )

Brian Trevey of Trustwave and Randy Romes of LarsonAllen detailed many common security risks and how to recognize them.

Trustwave data shows that top methods of entry included remote access applications (45 percent) with either default or weak passwords in 90 percent of the

FEBRUARY LUNCHEON FOCUSES ON E-COMMERCE SECURITY RISKS

cases with use of third party connections accounting for another 42 percent of unlawful entry.

Randy Romes discussed the SANS 2009 Cyber Security Risk Report, citing client side software vulner-abilities, which includes commonly used programs, such as Adobe PDF Reader, QuickTime, Adobe Flash, and Microsoft Office, rather than firewall attacks. He said that scripting flaws in open-source, as well as custom-built applica-tions, account for more than 80 percent of the vulnerabilities being discovered.

He also warned attendees to be aware of email phishing, and not just the Nigerian spam emails. There are plenty of attacks that look to be from a recognized organization. Many attempts come

Crystal Redding was committee member in charge of this month’s program, and

she introduced of the speakers.Two speakers presented the February program topic — Brian Trevey,

standing left, and Randy Romes, standing right.

The Clear Choicefor the Not-for-Profit Community

For close to 100 years, BDO Seidman has served the not-for-profit community. Ourteam of professionals offers the hands-on experience and technical skill to serve thedistinctive needs of our not-for-profit clients—and help them fulfill their missions.Based in our Greater Washington, D.C. Metro office, the BDO Seidman Institute forNonprofit Excellence supports and collaborates with BDO Seidman offices aroundthe country to develop innovative and practical accounting and operational strategiesfor the tax-exempt organizations they serve. The Institute also serves as a resource,studying and disseminating information pertaining to not-for-profit accounting andbusiness management.

Joyce Underwood, CPABDO Seidman, LLP7101 Wisconsin Ave., Suite 800Bethesda, MD 20814-4827(301) 654-4900 / www.bdo.com

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6

I was born in Portland, Oregon and raised up and down the west coast. Until 2007, other than time

away for military service in the late sixties and five years in Wisconsin after graduating from college, I have lived on the west coast.

My wife Margaret works for the National Credit Union Administration. Her acceptance of an appointment as a program officer in the central office began our Alexandria Adventure. With four children and families spread from the northwest to Wisconsin to Texas we thought the opportunity to introduce our 10 grandchildren (the oldest just turned 20, how did that happen?) to the historic and exciting national capitol was too good to pass up.

I am the controller for Higher Achievement, a non-profit located

in the District. We provide out of school time educational opportunities for children in grades 5-8 in underserved communities. The organization began in 1975 and grew slowly until a few years ago. At that time, the board of directors elected to expand into other cit-ies in need of the opportunities we offer to students in DC. In the summer of 2009 we opened two centers in Baltimore and in the summer of 2011 we will open in Richmond. My role has been to upgrade systems, con-trols, and procedures that will allow the organization to grow into a national player in the out of school time education field.

My undergraduate degree is from California State University-Fullerton. After graduation I worked

MEET CRAIG ROSS – MEMBER PROFILE

Craig Ross

for The West Bend Company in West Bend, Wisconsin. The division I worked for was sold to a Seattle

(continued on page 16, Ross )

Congratulations!

Ann Marie EterginoThe Etergino Group

5425 Wisconsin Avenue, Suite 301 Chevy Chase, MD 20815

(301) 907-2771 • www.rbcfc.com/theeterginogroup

© 2010 RBC Wealth Management, a division of RBC Capital Markets Corporation, Member NYSE/FINRA/SIPC.

Ann Marie Etergino, CIMA®

BARRON’S TOP 1000 FINANCIAL ADVISORS IN 2010

Senior Vice President - Financial Consultant of RBC Wealth Management’s Chevy Chase, Maryland office, has been named to the list of the “Top 1000 Financial Advisors” in the February 22 issue of Barron’s, a national financial newspaper published by Dow Jones & Company.

The nominees for the list are ranked based on several factors, including quality of service, regulatory records, assets under management and revenue generated for their firms. In the best advisors in Maryland listing, Ann Marie was ranked at #20.

77

John Barnes, standing by the screen, was speaker for the monthly program in January.

Trade Associations | Public CharitiesEducational and Research Organizations

Foundations | Community Action Agencies Religious Organizations | Colleges and Universities

Private/Public Schools | Healthcare Providers Nonprofit Government Contractors

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Not-for-Profit Industry Group

by Yasamin Al-Askari, SunTrust Bank

Our January luncheon was extremely well attended owing to the interest in the topic and the expertise of the speaker. John Barnes

is a partner in the Advisory Services Group in Grant Thornton’s Mid-Atlantic practice. With over twelve years of combined experience in audit, tax, accounting, Sarbanes-Oxley, and Internal Audit consulting services, including prior managerial positions in a national accounting firm and an internal audit consulting firm, Barnes’expertise was apparent as he presented Internal

JANUARY LUNCHEON A TREMENDOUS DRAw

Control Essentials. He was joined by his colleague, Mike Zapko, also in the Business Advisory Services.

This was a particularly hot topic for FAR’s financial managers, accountants and auditors, who know that identifying departmental policies and procedures that function as the primary controls against errors and fraud can be difficult and interpreting management’s documentation of accounting processes and controls can be confusing at times.

Participants received a solid understanding of systems and control documentation from an Auditors and Industry standpoint. Barnes covered the impor-tance of having an audit committee oversee the establishment of appropriate accounting policies and internal controls and to assess the business risk of the organization. The audit committee is responsible for monitoring the roles of the board, management, and internal and external auditors. More than 66 percent of audit committees have a CPA on them as it is important that at least one individual on the committee has some financial expertise and is able to understand the risk of management override.

Make Every Dollar Work Harder

Jim Larson, CPA Trevor Williams, CPA jlarson@grfcpa.com twilliams@grfcpa.com

• Auditing and Accounting

• Circular A-133 Compliance

• Internal Control Evaluation

• 990 Tax Compliance & Planning

Gelman, Rosenberg & Freedman, CPAs4550 Montgomery Avenue, 650 North

Bethesda, Maryland 20814 www.grfcpa.com (301) 951-9090

Please contact us for your next audit.

With Our Financial and Operational Guidance

(continued on page 18, January )

8

Bank of America, N.A. Member FDIC. Equal Housing Lender . ©2008 Bank of America Corporation.

Our mission is to make sure you succeed.

Regardless of your size, location or mission, Bank of America is dedicated to understanding and serving your organization like no one else can. We offer a unique national platform of experienced not-for-profit banking specialists. Working together, they provide you with the technology, experience and financial strength to help you achieve your strategic objectives.

Put Bank of America to work for you. For more information, contact your Bank of America representative:

Maria Christofi Georges, 1.202.442.3956, maria.georges@bankofamerica.comMatt Agresti, 1.888.852.5000 ext. 1205, matthew.agresti@bankofamerica.comJudy Balloff, 1.888.852.5000 ext. 1980, judy.balloff@bankofamerica.com

You have a mission.

9

Watkins, Meegan, Drury & Company, L.L.C. Proudly Serving the Not-For-Profit Community Since 1975

7700 Wisconsin Avenue Suite 500Bethesda, MD 20814

Dan O’Shea (301) 664-8165

Daniel.OShea@WatkinsMeegan.com

www.WatkinsMeegan.com

Alexandria is my hometown, though I went to college in North Carolina and was there for 20+ years. In 1998, I

returned to the area. Currently, I live in Chevy Chase. I have a BS in Business and Accounting from East Carolina University and an MBA from Meredith College. I am married and have two sons, ages 16 and 27. A career-oriented achievement of which I am most proud was graduating with honors from my MBA pro-gram. Non-work related: I hiked down into and back out of the Grand Canyon three years ago.

Unknown to most people is the fact that I have a serious rodent phobia, particularly mice and rats. Just seeing one will immediately cause hysteria.

My first job out of college was as a Medicare/Medicaid desk auditor for Blue Cross Blue Shield of North Carolina. While in college, I was the bookkeeper for

National Athletic Trainers Association. Cycling, knitting and hiking are my favorite ways to spend free time.

I am currently with the

Marine Corps Scholarship Foundation as Vice President of Finance and Treasurer. My duties include managing the financial and data operations of the organization. Two accomplishments are implementing full fund accounting system for 300+ endowment funds and developing automated scholarship manage-ment program, now with online application. I am also a member of National Scholarship Providers Association.

I live in Chevy Chase, MD, with my husband, Bruce, and two sons, David and Warren.

MEET MARTHA HULSE – MEMBER PROFILE

Martha Hulse

. . .

. . .

10

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by John Devine, Senior Investment Manager, Wells Fargo Private Bank

In the clearest sign yet that the worst of the financial crisis is behind us, the Federal Reserve raised the discount rate (the rate at which it

makes emergency loans to commercial banks) from .50 percent to .75 percent during the last week of February. This was the first increase in this rate in more than three years. It is important to note that this is not a signal of imminently tighter mon-etary policy in response to better than expected economic growth, but an indication that the Fed believes the financial system is now strong enough to begin to stand on its own while the government starts to unwind the extraordinary measures that were taken to support it during the height of the financial crisis. The Fed would like banks to return to the private markets (i.e. commercial money markets) as their main sources of funding – which had almost completely dried up at the height of the crisis – and rely on the Fed solely as a back-stop. This decision returns the Fed to its traditional role as the lender of last resort, rather than the lender of first resort.

Interestingly, several Fed officials issued state-ments indicating that the market’s predictions of a Fed Funds hike this year were overdone. And while the economic recovery is becoming more entrenched – recent numbers for industrial pro-duction, Leading Economic Indicators, consumer confidence, retail sales, home prices, and fourth quarter corporate earnings were stronger, the recovery will continue to be very uneven. Access to business and individual credit is still limited, and unemployment is unacceptably high, both of which should keep inflationary pressure under control in the near term. In fact, the CPI report released in early March showed that prices rose less than expected in January, while the core rate of inflation (excluding food and energy) fell for the first time since 1982. However, we believe this will be the first of many actions the Fed will take over the next several years to remove excess monetary stimulus from the economy.

Jim Paulsen, Chief Economist at Wells Capital Management, questions whether Fed tightening is even something to fear, or is actually a sign of suc-cess. He notes that the economy is on the brink of consistent monthly job creation. Once that trend is displayed for several months, the recovery becomes self-sustaining. At that point, it would be difficult to justify a near zero Fed Funds rate. Our forecast is for a Fed Funds rate of .75 percent by the end of 2010 (up from a range of 0 percent - .25 percent today). But perhaps that’s good news. Less than a year ago, at the height of the panic, the notion that the Fed would have to raise rates in 2010 due to significant economic improvement seemed far fetched. It is conceivable that a gradual tighten-ing may accompany a corresponding increase in economic optimism (and may also help calm the fears of those who worry that the massive economic and fiscal stimulus will lead to much higher infla-tion). As Paulsen notes, an eventual move toward tightening has always been part of recovery and has rarely resulted in a “double-dip” recession.

But to be sure, a rising rate environment pres-ents challenges and opportunities for investment management. A fixed income portfolio should be well diversified among different types of assets, and particular attention should be paid to dura-tion management. The yield curve is temptingly steep at this point (the spread between two- and ten-year Treasuries is at near record levels), but the

MARKET UPDATE

(continued on page 18, Market)

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TABLE TALKFAR welcomes new members.

Margaret BartelPresident Bartel & Associates911 Duke StreetAlexandria, VA 22314703-548-4250Fax 703-739-4232mbartel@bartelassociates.com

Maureen DownsDirector of Finance and AdministrationAmerican Association of Pharmaceutical Scientists2107 Wilson Blvd., Suite 700Arlington, VA 22201-3042703-248-4730Fax 703-243-9054downsm@aaps.org

John DrippsChief Financial OfficerNational Association of Secondary School Principals1904 Association DriveReston, VA 20191703-860-7225703-476-5459drippsj@principals.org

Lisa GreeneDirector of Business Development Foster, Soltoff & Love, Ltd.6550 Rock Spring Drive, Suite 190Bethesda, MD 20817301-564-2966Fax 301-530-5814lgreene@fslbene.com

Darshan MakimFinancial Advisor Capstone Private Wealth1050 Connecticut Avenue, Suite 1000Washington, DC 20036202-577-9535Fax 202-248-6575dmakim@capstonepw.com

Marlene PooleDirector of HR and AdministrationSociety for Neurscience1121 14th Street, NW, Suite 1010Washington, DC 20005202-962-4000Fax 202-962-4947marlene@sfn.org

Janice ThomasDirector of Finance and AdministrationConsumer Health Foundation1400 16th Street, NW, Suite 710Washington, DC 20036

202-939-3390Fax 202-939-3391jthomas@consumerhealthfdn.org

Sharon TryonChief Financial OfficerMathematical Association of America1529 18th Street, NWWashington, DC 20036202-387-5200Fax 202-265-4825stryon@maa.org

Jo-Anne williamsControllerThe Links Organization9404 Sanborne CourtUpper Marlboro, MD 20772240-355-3539Fax 240-573-3547joanne.williams@linksinc.org

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There are many ways to change the world. WE CHOSE ACCOUNTING

(continued on page 21, Table Talk)

David Bell at American Iron & Steel Institute is now at 1140 Connecticut Avenue, NW, Suite 705. The rest of his information in the directory is correct.

12

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Mindy Saffer is a principal at West, Lane & Schlager, a leading commercial real estate broker-age firm that focuses on tenant-only representa-

tion in the Washington, D.C. metro area. Saffer was born in Philadelphia, PA, and moved with her family to Bowie, MD, shortly after. She graduated from the University of Maryland in 1986 and received her Masters in Marketing from Johns Hopkins University.

In December, Mindy was promoted to principal from senior vice president at West, Lane & Schlager. She started her career at WLS in 1999 and is the first person to ever be promoted to principal on the leasing side of the business. As principal of the firm, Mindy can provide clients with further security that West, Lane & Schlager is 100 percent committed to the success of their project. Though she has more administrative responsibilities with her new title, her main focus continues to be representing tenants on leas-ing, sales, and purchasing transactions.

Mindy didn’t always work in commercial real estate. She learned stellar customer service skills at her first job working at the Roy Rogers across from her high school.

She worked the drive-thru window and still remembers saying to customers “round it up at the win-dow!” Prior to joining West, Lane & Schlager, Mindy worked for architectural firm, Lopardo Design, where she concentrated on design for nonprofit organizations and business development.

While Mindy has achieved great career success, her proudest achievement—other than giving birth to her three children—is skydiving. Even though she has a fear of heights, Mindy decided that the best way to conquer her fear would be to jump out of an airplane. She can vividly remember the instructor opening the door of the plane and pushing her out the door. While she may not have completely conquered her fear, she is definitely less afraid of heights but still can’t believe she actually went through with it.

Mindy also loves the outdoors and all activi-ties associated with it. She loves camping, playing sports, hiking, biking, boating, and relaxing on the beach. She even learned how to ride a motorcycle last summer! When she isn’t working, she enjoys spending time with her very active children. Her weekends are spent watching sporting events, and she enjoys spending beach time with them in the summer and snowboarding with them in the winter.

Mindy mastered an understanding of green building practices by successfully completing the LEED Accredited Professional Exam, becoming West, Lane & Schlager’s first LEED Accredited Professional. She is an active member of the American Society of Association Executives (ASAE), PTA, Girl Scouts of America, Greater Washington Commercial Association of Realtors (GWCAR), and FAR. She resides in Gaithersburg, Maryland with her husband and three children—Heath, 15, Brooke, 12 and Skylar, 11.

MEET MINDY SAFFER – MEMBER PROFILE

Mindy Saffer

. . .

14

The February event was a popular topic and many members attended for the take-away information.

President Thomas Nordby welcomed members, introduced

first-time guests, and promoted the upcoming meeting in March.

disguised as a communications from Microsoft with information about a needed upgrade. However, look carefully at the URL in the provided link. In the example shown at the luncheon, instead of https://microsoft.com, the link was to https://microsoft.issgs.net. The latter link will take you to a site where malware will be installed. This is one method used to steal secrets and other sensitive information, such as is needed for identity or account information theft. And he emphasized that no bank will ever ask you in an email to verify account number, password, or any personal information.

Two cases were discussed – one in which a Michigan

company sued their bank after cyber thieves allegedly made fraudulent wire transfers totally $560,000. The cyber thieves obtained the banking account credentials through a fishing email sent to an employee. The transactions wired funds to bank accounts in Russia, Estonia, Scotland, Finland, and China and were with-drawn soon after the deposits were made. The bank allegedly routinely sent customers emails with links asking them to submit information to renew digital certificates. The suit also alleges that the bank failed to notice unusual activity because the company had made just two wire trans-fers ever and yet in just a three-hour period 47 wire transfers and 12 transfer of funds requests were made. When asked to halt transactions, the bank failed to do so until 38 more had been initiated.

Trevey reported on incident response. He said that attackers were still on systems an average of 156 days before being detected. He also said that elimi-nation of stored data greatly reduces the data loss

(February, continued from page 4)

(continued on page 21, February)

15

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. . .

. . .

Jim is currently a principal with The McCormick Group (TMG) where he recruits senior

executives in the Association and Not-For-Profit industries. He has been with TMG about four and a half years. As a new recruiter with TMG, Jim set a corporate place-ments record for first year execu-tives and was the fastest person to be promoted to principal in the firms 35-year history. Prior to joining TMG, he was president of the Independent Office Products and Furniture Dealers Association in Alexandria, VA. He has ten years of association management experience.

Jim’s first job was a salesperson for Lanier Business Products selling phone systems, fax machines and

dictation equipment. From there he moved into the office furniture industry and ran several furniture dealerships.

He is originally from Delaware and attended the University of Delaware, graduating in 1981 with a degree in Business Administration.

He is very involved with chil-dren’s swimming and is an active volunteer with Potomac Valley Swimming, the Northern Virginia Swim League, and the Virginia High School Swim League. Jim and his wife Eileen are getting ready to celebrate their 22nd anniversary and they have three very active and very different teenage children. In his spare time, Jim loves to cook and experiment with new recipes.

MEET JIM MCGARRY – MEMBER PROFILE

Jim McGarry

area company, and so after five years I was back on the west coast.

I earned my MBA at the University of Washington, Seattle in 1987. In addition to non-profits I have worked in a variety of industries including healthcare, transportation, retail and communications.

My most recent position prior to the move east was Director of Finance and Administration at Pierce Count AIDS Foundation in Tacoma, Washington.

The Puget Sound region is a great place for someone that likes outdoor activities. After over 25 years of running, my various body parts encouraged me to find an activity less jarring. I accidently bought a bicycle and another and another. I am now an avid bicyclist. It is a great way to commute from Alexandria into DC. After retirement I plan to increase my miles per week from about 150 to 250.

(Ross, continued from page 6)

17

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Teamwork is the key to success - both for our firm and for our clients.

1201 15th Street, NW, Suite 340 Washington, DC 20005 202-293-9000

Lstokes@stokespc.com mattp@stokespc.com

www.stokespc.com

Auditing and Accounting Grant Support Tax Services

Larry F. Stokes, CPA Matthew F. Penniman, CPA

Human Resources A-133 Audits Management Consulting Pension Plan Audits

IF YOU REFUSE TO ACCEPT ANYTHING BUT THE BEST

We are committed to excellence and to serving each client as if they were our only client.

Teamwork is the key to success - both for our firm and for our clients.

1201 15th Street, NW, Suite 340 Washington, DC 20005 202-293-9000

Lstokes@stokespc.com mattp@stokespc.com

www.stokespc.com

Auditing and Accounting Grant Support Tax Services

Larry F. Stokes, CPA Matthew F. Penniman, CPA

Human Resources A-133 Audits Management Consulting Pension Plan Audits

IF YOU REFUSE TO ACCEPT ANYTHING BUT THE BEST

We are committed to excellence and to serving each client as if they were our only client.

Teamwork is the key to success - both for our firm and for our clients.

1201 15th Street, NW, Suite 340 Washington, DC 20005 202-293-9000

Lstokes@stokespc.com mattp@stokespc.com

www.stokespc.com

Auditing and Accounting Grant Support Tax Services

Larry F. Stokes, CPA Matthew F. Penniman, CPA

Human Resources A-133 Audits Management Consulting Pension Plan Audits

IF YOU REFUSE TO ACCEPT ANYTHING BUT THE BEST

We are committed to excellence and to serving each client as if they were our only client.

The January topic drew a packed house as the kick off for 2010 for FAR.

Program Coordinator, Yasmin Al-Askari, introduced the speakers.

. . .

. . .

(January, continued from page 7)

Barnes provided some insight into the latest COSO (Committee of Sponsoring Organizations) guidance on the components and principals of effective internal control and examined basic tools used to document an accounting process. Monitoring is essential and ensures that internal controls continue to operate effectively. It requires testing and is most likely per-formed differently based on the size of the organiza-tion. The two important questions to ask are (1) what information should the company evaluate (relevant,

reliable and timely information), and (2) what proce-dures should it employ (ongoing and separate).

Barnes also reminded FAR members of the major types of financial state-ment fraud in addition to risks that were not on the books, e.g. Enron’s special purpose enti-ties that were not disclosed in the financial state-ments. John reviewed fraud detection and prevention and provided key elements to an effective anti-fraud program. If organizations are hit with fraud the response needs to be fast and appropriate: gather the facts, identify contributing factors, confront the perpetrator, prosecute (if possible), and educate the organization.

Hopefully, with the benefit of this presentation, none of FAR’s members will be the victim of any inter-nal or external fraud.

risk of going out on the curve to capture that higher yield is significant. It is easier to lengthen duration into a rising rate environment than to shorten it.

We continue to recommend well-diversified portfolios with exposure to equities, fixed income, real assets, and complementary strategies. In the short term, we suggest an underweight position in Developed International bonds, (half the position being currency hedged), and an underweight in International REITs.

John P. DevineSenior Vice President Senior Investment Manager Wells Fargo Private Bank john.devine@wachovia.com

(Market, continued from page 10)

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by William H. Devaney, Esq. and Jeffrey S. Tenenbaum, Esq.

Venable LLP

Sadly, nonprofit organiza-tions are not immune from employee embezzlement.

Because many nonprofits tend to be more trusting of their employees and have less stringent financial controls than their for-profit coun-terparts, they fall prey to embezzle-ment and other forms of employee fraud at an alarming rate. By way of recent example:

On September 17, 2009, the former CFO of the Association of Fish and Wildlife Agencies, an international conservation group based in Washington, D.C., is to be sentenced in federal court after her plea of guilty to wire fraud. A 10-year employee of the organiza-tion who worked her way up to CFO, she used the organization’s

PREVENTING EMBEzzLEMENT IN YOUR NONPROFIT ORGANIzATION

credit card to charge approximately $184,000 in personal expenses, including hair and make-up expenses and casino charges.

On September 4, 2009, the former Executive Director of the Oklahoma CASA Association, an advocacy agency for abused and neglected children, received a 15-year prison sentence after her plea of guilty to embezzling $549,024. Another 10-year employee of the organization, she also used the organization’s credit cards for personal expenses such as foreign vacations, cosmetic surgery, and college tuition. During the investigation, it was reported she told law enforcement officers, “I was very good at cooking the books.”

On August 31, 2009, a former bookkeeper and office manager at the House of Ruth, a California organization that provides shelter

to homeless women and children, was sentenced to a year in prison. The former bookkeeper and office manager had pleaded guilty earlier in the year to federal charges of misappropriating $138,370 in federal funds and embezzling $238,000 from the organization’s bank accounts.

Nonprofits are not defense-less, however, and there are several proactive steps organizations can take to prevent and detect employee embezzlement.

Double Signatures, Authorizations and Back-up Documentation

Multiple layers of approval will make it far more difficult for embezzlers to steal from the orga-nization. For expenditures over a predetermined amount, require two signatures on every check and two authorizations on every cash dis-bursement. Where the professional

Congratulations toRob Olcott, CIMA,® Managing Partner

For being named to Barron’s 2009 and 2010 Top 1,000 Advisors

2010 Corporate Ridge, Suite 560 • McLean, VA 22102703-720-5980 • 866-OLCOTT9

* Criteria for the 2009 ranking was based on more than 3000 filtered nominations from more than 100 investment, insurance, banking and other related independent financial service firms. The 2010 rankings are based on data provided by over 4,000 of the nation's most productive advisors. The number of advisors shown for each state is based on the total population of the state, so larger states have larger listings. The rankings reflect assets under management, revenues, quality of the advisors' practices and other factors. Assets managed for institutions are given less weight in the scoring. Total assets are all assets overseen by the advisor's team, including some that are held at other institutions. Portfolio performance is not a criterion because performance figures often are influenced more by clients' rick tolerance than by an advisor's investment-picking abilities.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC.Olcott Consulting Group is a separate entity from WFAFN. 0210-5015 3/10.

20

Experience.Local.Strength.When you work with an experienced Not-for-Profit banking expert, you add greater value to your business decisions.

Learn how we can help meet the unique financial needs of your organization, contact:

Kathleen MalloyGroup Vice President, Not-for-Profit Banking Group240-497-7706kmmalloy@chevychasebank.net

Products and services offered by Capital One, N.A., Member FDIC.Capital One Bank and Chevy Chase Bank, a division of Capital One, N.A. are both trade names of Capital One, N.A. and do not refer to separately insured institutions.

staff of an organization is too small to effectively imple-ment a double authorization policy, consider having a (volunteer) officer or director be the second signatory or authorization required (generally, an officer will be preferable to a director). Similarly, all check and cash disbursements should be accompanied by an invoice or other document showing that the payment or disburse-ment is appropriate. If the size of your organization allows it, the invoice or disbursement request should be authorized by a manager who will not be signing the check. Never pre-sign checks. With credit cards, require prior written approval for costs estimated to exceed a certain amount. Again, the person using the card cannot be the same person authorizing its use.

Segregation of DutiesHand in hand with multiple authorizations goes the

segregation of duties. At a minimum, different employ-ees should be responsible for authorizing payments, disbursing funds, and reconciling bank statements and reviewing credit card statements. If the organization does not have enough professional staff to effectively segregate duties, a (volunteer) officer or director should be tasked with reconciling the bank state-ment and reviewing credit card statements. Because embezzlement also can occur when funds are coming

into an organization, no single individual should be responsible for receiving, depositing, recording, and reconciling the receipt of funds. By the same token, all contracts should be approved by a manager unin-volved and personally uninterested in the transaction (i.e., it will not impact his or her bonus or salary) and, wherever possible, contracts should be the product of competitive and transparent bidding.

Fixed Asset InventoriesAt least yearly, the organization should perform a

fixed asset inventory to ensure that no equipment or other goods are missing.

Background ChecksBackground checks on new employees and volun-

teer leaders can unearth things such as undisclosed criminal records, prior instances of fraud and heavy debt loads that can make it more likely that an employee or volunteer leader might succumb to fraud.

Audits and Board Level OversightThe control measures discussed above only work if

someone is checking. In addition to management, who should be ensuring that the measures discussed above are followed, organizations should also undertake regular external audits to ensure that these measures are effective. Organizations also should establish audit committees on their board of directors, contain-ing at least one person expert in accounting, that would serve as the primary monitor of these anti-fraud measures. In lieu of an audit committee, smaller organizations should consider putting a CPA or other financially-knowledgeable person on the board of directors to serve a similar function.

* * * * * *While there will always be instances where a

determined thief manages to beat an organization’s controls, the steps suggested above will go a long way toward deterring embezzlement and other types of fraud, and will make it easier to expose dishonest employees.

William Devaney is a partner at Venable LLP, resident in its New York City office. A former federal prosecutor, he fre-quently conducts internal investigations for nonprofit organiza-tions and represents them in government investigations. He can be reached at 212-983-8204 or at whdevaney@venable.com.

Jeffrey Tenenbaum is a partner at Venable LLP, resident in its Washington, DC office. He chairs Venable’s Nonprofit Organizations Practice Group. He can be reached at 202-344-8138 or at jstenenbaum@venable.com. . . .

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AccountAbility. GovernAnce. trAnspArency.Some words require more definition. LarsonAllen is committed to more than 2,500 nonprofit clients nationwide. With a team of 150 professionals dedicated to nonprofits, we offer a unique combination of experience and depth.

Noticeably Different.• Auditandtaxservices• Fiscalandgovernanceconsulting• Outsourcedaccountingservices• Benefitservices• Executivesearch• Informationsecurity• Web-basedaccountingsystems

©2009LarsonA

llenLLP

Contact Andrew Smith at ajsmith@larsonallen.com or 703-825-2163.

Jennifer Boykin is no longer with RSM McGladrey. The second rep is now Angela KelseyCFS Business Development Associate RSM McGladrey, Inc.9737 Washingtonian Boulevard, Suite 400Gaithersburg, MD 20878301-296-3500Fax 301-296-3501angela.kelsey@rsmi.com

Kimberly Boscia, The Farm Credit Council, has a new title and is now Director of Administration/Corporate Secretary.

Shawn Miller, CPA, CFE, is a Partner at Calibre CPA Group.Ann Marie Etergino, Senior Vice President - financial consultant at

RBC Wealth Management’s Washington D.C. office, has been named to the list of the nation’s “Top 1000 Financial Advisors” in the Febru-ary 22 issue of Barron’s, a national financial newspaper published by Dow Jones & Company. The nominees for the list are ranked based on several factors, including quality of service, regulatory records, assets under management and revenue generated for their firms. In Maryland’s best advisors listing, Etergino was ranked at number 20.

By now you should have received your 2010 FAR Membership Directory. Please check to make sure all your information is correct. If there is something that needs changing, please either do so online or notify FAR at farhqtrs@aol.com.

(February, continued from page 14)

exposure. Conclusions reached on cyber attacks include: attackers are using old vulnerabilities (and using new vulnerabilities when old ones don’t work), attackers know they won’t be detected, organizations do not know what they own or how their data flows, blind trust in third parties is a huge liability, organiza-tions are fixing new/buzz issues but not fixing basic/old issues. He recommends in 2010, take a step back before moving forward.

Associations are more and more using e-commerce to accept dues payments, donations, event fees, payment for merchandise, etc. The compliance mandate affecting credit card data is PCI DSS (Payment Card Industry Data Security Standard).

Information provided by Trevey and Romes on the PCI DSS included six goals with twelve requirements. The goals listed included: build and maintain a secure network; protect cardholder data; maintain a

vulnerability management program; implement strong access control measures; regularly monitor and test networks; and maintain an information security policy. Current guidelines call for an annual audit and quarterly scanning for security threats. For merchants not pass-ing the quarterly scan, many card processors are charging a monthly penalty of up to $30 per month.

The PCI standard is successful because of increased awareness, its focus on protection of card-holder data, standardized controls accepted by all card brands, eradi-cation of prohibited data storage, and continual improvements and updates to the standard. The stan-dard was implemented gradually, with merchants divided into four levels. Level 1 merchants handled the most transactions and Level 4 the least.

Trevey listed the top ten strategic initiatives in the global remediation

plan: (1) perform and maintain a complete asset inventory, decom-missioning old systems; (2) moni-tor third party relationships; (3) perform internal segmentation (segment data); (4) rethink wireless; (5) encrypt your data; (6) investi-gate anomalies; (7) educate your staff; (8) implement and follow a software development life cycle; (9) lock down user access; and (10) use multifactor authentication every-where possible.

They concluded talking about best practices. These include test-ing security, making sure that SSL certificates are valid and not expir-ing during a holiday season, keeping web site seals valid and up to date, obtaining all patches and keeping patches up to date, and knowing who is using your network.

The slides from this presentation are available on the FAR website: http://www.far-roundtable.org and click on the Programs tab.

. . .

. . .

(Table Talk, continued from page 11)

(February, continued from page 14)