In the last two years, I have become aware of stories in the local media, newspaper and television, describing alleged improprieties at several Grayson County entities. The entities have involved quasi-public, not-for-profit, and governmental endeavors. All of these stories at the very least imply that someone associated with the entity is not exercising proper fiduciary responsibilities and good stewardship over the assets with which they have been entrusted.
All entities which desire a long-lived and peaceful existence must make a maximum effort to comply with the laws which apply to their particular endeavors. These laws and regulations consist of:
(a) Federal Income Tax Laws (b) Federal Employment Tax Laws (c) State Employment Tax Laws (d) Federal and State Wage and Hour Laws (e) Federal and State Guidelines regarding the appropriate expenditures for which grant friends are to be utilized (f) Internal control system policies and procedures
Legal and ethical behavior should be a hallmark of all of the entities which are described herein. Legal and ethical behavior must be valued by an entity’s board of directors and by its management. Senior management must cultivate an environment of ethical behavior.
One of the major components, if not the key component, of an entity’s desire to be known as a legal and ethical entity, must be a strong compliance function. The chief compliance officer must be charged with reporting to the Chief Executive Office and also, when necessary, reporting directly to the board of directors and/or board committee.
When a compliance officer is fired for seemingly doing their job, I must ask,
(1) What did the board expect the compliance officer to do regarding alleged improprieties within the entity?
(2) Why was an out of court settlement award of hundreds of thousands of dollars paid to a compliance officer who was simply following the duties with which she had been charged pursuant to Federal Grant Program guidelines?
As a Grayson County Citizen and Taxpayer, I expect more of these entities directors and their employees.
Albert G. Brown is a Certified Public Accountant in Sherman.