The NonProfit Times - January 1, 2008 - (Page 8)

Red Cross Audit Comes Up Clean Deposed CEO didn’t use account for girlfriend By Paul Clolery and. Mark .Hrywna. . . . . . . . . . . . . . . . . review of Mark Everson’s expenses during his six-month stint as Chief executive officer of the American Red Cross (ARC) failed to turn up any misappropriation or improper use of funds. The inquiry was conducted by the Red Cross Office of Investigations, Compliance and Ethics, at the direction of the General Counsel and examined documents related to his business travel expenses, said Carrie Martin, a spokesman for ARC. The Washington, D.C.-based disaster relief agency initiated a forensic audit within days of Everson’s Nov. 27 resignation to determine if any money spent by him was used inappropriately. He resigned his position after a romantic relationship with a female subordinate, who is married and reportedly now pregnant, was brought to the board’s attention just before Thanksgiving. The investigation was not initiated because of a complaint from the female subordinate, a chapter executive 8 A in Mississippi who is expected to remain with the organization. Everson, who earned an annual base salary of $500,000, did not get a severance package from the Red Cross board, only a contribution of less than $10,000 to help with the cost of medical insurance, said Martin. A search committee of about 15 people has been assembled, Martin said, made up of board members and Red Cross employees, representing blood regions and chapters. Although no deadlines for the search have been set yet, the agency wants to complete it as quickly as possible, she said. In the meantime, the board appointed Mary S. Elcano, general counsel for the Red Cross the past five years,as acting president and CEO,the ninth different CEO or interim CEO in the past 12 years. Three members of Everson’s staff whom he brought from the Internal Revenue Service (IRS) agreed to stay with the organization at the board’s request. In terms of accountability, the ARC board got it right, nonprofit sector executives said. “This is a good-news, bad-news story.The good news is the JANUARY 1, 2008 Mark Everson Red Cross board acted deliberately and transparently to address a governance problem.The bad news is that, once again, the Red Cross is in the spotlight with a negative story, which will continue to erode the public’s trust in major philanthropic organizations,”said John Graham IV, CAE, presiwww.nptimes.com dent & CEO,ASAE, in Washington, D.C. According to Gary Bass, executive director of OMB Watch in Washington, D.C.,“I think everyone has the same reaction, which is: This is shocking.” Added Bass, “Of course this is bad for Red Cross. It’s bad for any organization; it’s bad for our sector; it’s bad for management/employee relations. So he should know better.” H. Art Taylor, president and CEO of the BBB Wise Giving Alliance in Arlington, Va., described the news as a setback because, “The Red Cross was making many positive steps to improve the negative perception that the public has of the organization. … The team in place around Mark Everson was very strong, and a big reason why the organization was moving forward.” Linda Crompton, president and CEO at BoardSource in Washington, D.C., called the situation “extraordinarily bad luck” for the Red Cross.“How do you prevent a kind of thing like this from happening? You do what you can do.You have a whistleblower policy in place,you do your due diligence when you’re hiring these people, and you do the reference checking, and you try to THE NONPROFIT TIMES http://www.nptimes.com

Table of Contents Feed for the Digital Edition of The NonProfit Times - January 1, 2008

The NonProfit Times - January 1, 2008 Expenses Continue To Put Stress On Nonprofit Budgets Insuring Donors’ Goodwill Volunteers On Firing Line Contents Who...When...Where...How...What? Red Cross Audit Comes Up Clean Exit Doors Rear And Aft Calendar A Fresh Look Special Report: Accounting APIs Opportunity Is Knocking Middle Management Barrier Memorial NPT Jobs Resource Directory

The NonProfit Times - January 1, 2008

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