Problem on non-profit audit


Case Scenario:

Over five years ago, I received a phone call from the headquarters of a non-profit organization to which I have belonged for over thirty years.

They advised me that they had received word from a few members of one of the local organizations in Texas that they had some concerns that there might be some financial impropriety going on. They asked me if I would fly to Texas, spend a few days with the local "volunteer" treasurer of the organization, audit the books, and make a report back to them. I said I would be happy to do so. I do audits for them, free of charge, every year or two. They indicated they would call the local treasurer in Texas and advise them that they had been selected for a "random" audit.

A week later the local treasurer in Texas called me on the phone and advised me he would be happy to send me the "books" via postal mail so that I would not have to make the trip. I said thanks but that I would probably have some questions and thus preferred to make the trip. I had been informed that he had been the volunteer treasurer for over ten years and during that time had donated hundreds of hours of his time to the organization. I was also aware he had a PhD in the biological sciences. I had no idea if he had any training in accounting.

Three weeks later, I arrived in Texas, rented a car and called the local treasurer to let him know I was in town and on my way to his apartment as previously arranged. He did not answer. He continued not to answer as I called during the hour drive to his apartment. He also did not answer his doorbell. I went and checked into a nearby hotel and continued to call him for the next three hours.

Finally, I decided to call the secretary of the local organization to find out if he knew the treasurer's whereabouts. Much to my surprise, the local secretary did not even know I was coming to town. He indicated he would try to find out the whereabouts of the treasurer.

At this point in time, what should I, as the auditor, be thinking?

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Accounting Basics: Problem on non-profit audit
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