Federal agents from Washington raided Memphis Goodwill this week as part of a growing investigation into AbilityOne, according to inside sources.

Click on the following link for the article: www.cnn.com

Dave Tate’s comments: This article raises so many issues relating to businesses in general, nonprofits, and Goodwill.

First, let’s not jump to conclusions about wrongdoing or liability, or the extent of wrongdoing if in fact it has occurred. The comments in the article tend to be spectacular, whereas actual evidence often proves otherwise. The contracts in question carry with them legal requirements that must be met. The nonprofits that I have been involved with take these legal requirements seriously, make a 100% effort to comply, and do comply. If it is established that there might be non-compliance with one or more criteria, that non-compliance is unintentional.

The allegations being made indicate executive officer and board-level concerns, and possibly also issues relating to the performance of the external audit or review, if there is one. The local executive officers and board members need legal representation. All of their past actions will be investigated.

As this case moves along, it might well highlight in the national news nonprofit oversight and internal control, governance and risk management processes. The spotlight on how nonprofits operate is a relatively small but growing effort. A story like this could brighten the spotlight on all nonprofits, including possible new legislation. All nonprofit executive officers and boards need to take note and review their operations.

And issues might well arise regarding how or to what extent, if at all, national Goodwill oversees the separate Goodwill entities which apparently are separate legal entities.

More to follow.

Dave Tate, Esq. and licensed CPA (inactive) California, http://directorofficernews.com