was recruited to the American Red Cross by a former member of this council, Ron Pitman, who asked whether I’d chair an audit committee meeting at my local chapter. I didn’t believe I had the time, but felt one meeting was doable. Well, we never can anticipate what events will shape our lives. I had no idea that American Red Cross meeting would last 25 years and take me to 49 states and four continents.
Being involved in the largest and most well-known international charity, one cannot underestimate the absolute necessity of trust. The American Red Cross, as all charities, must have donors’ trust if it is to receive funding. Services are delivered only if volunteers trust they will be treated fairly and with respect while doing meaningful work, and blood donors must trust that giving blood is safe and that it will be distributed properly.
|Kathryn A. Forbes, CPA, executive vice-president and CFO of eTec, national chair of Volunteers of the American Red Cross and president of the AICPA Foundation, won a 2004 AICPA Public Service Award. This article is from the acceptance speech she delivered before the AICPA governing council in May.|
When one sees pictures of the American Red Cross doing its work, they usually are of a disaster worker helping a family that has just lost its home or had a member saved by the gift of life—blood. But in 25 years I have yet to see a public service announcement showing an internal auditor looking at internal controls, a CFO preparing financial statements or an external auditor working with an American Red Cross exec and an audit committee to make operations more efficient. Yet you are key to the American Red Cross’s retention of its most important asset—the public’s trust.
Many of you know that former AICPA board chair Stu Kessler is always campaigning for a television program about CPAs. Well, I have the first episode. It takes place on that horrific day, September 11, 2001, when all our lives changed dramatically. The episode star is Tim Holmes, the American Red Cross general auditor. Although not reported, the American Red Cross lost vehicles and had rescue workers running for their lives when the towers fell. Within 48 hours, while bomb threats were received at the recovery center, American Red Cross internal auditors were on site working to ensure that $1 billion, the largest single domestic donation, was being accounted for and distributed properly.
The supporting cast involves our external auditor, KPMG LLP, who consulted with the audit committee and management on a weekly basis for six months on how to best coordinate the activities of more than 1,000 chapters.
My guess is that many of you in this room would also appear in this episode, since more than 500 local firms perform audits at the chapter level. You were all there in the first week working with American Red Cross units in your community, ensuring that all was well. You sent us your best and helped us develop better financial systems.
The next episode would feature Nita Clyde from Texas. When approached, Nita agreed to take on the chairmanship of the September 11 Oversight Commission, whose responsibility was to see that over $300 million in funds was distributed properly. Nita has never flinched, earning the respect of all, and today still works tirelessly to see the funds are used appropriately.
What is the result of all these CPAs giving their very best when times are at their very worst? Well, last December 26, when the horrible tsunami hit, again the world responded with unprecedented generosity, and your work paid off. People worldwide voted with their dollars and gave the International and American Red Cross and Red Crescent movements almost $1.4 billion.
The American Red Cross was one of only two charities that received an A-plus rating from a watchdog organization on its handling of the tsunami disaster donations. As much as the disaster workers in the field, it is the hundreds of CPA professionals who helped the American Red Cross process and distribute donations that resulted in that A-plus rating.
Most television shows have spinoffs and I have an idea for one as well. It would star Barry Melancon, who challenged us to look past the numbers. I took that advice to heart. Dr. Robert Ashcraft, an outstanding professor from Arizona State University (ASU) and a fellow American Red Crosser, and I were expressing our frustration about the quality of boards and executives in the nonprofit sector. We concluded there needed to be a place where those wanting to serve on boards of nonprofits could go for training in partnership with executive directors. With help from the W.K. Kellogg Foundation, ASU’s Center for Nonprofit Leadership and Management was born. Thank you, Barry, for urging us on.
At the American Red Cross an impressive 95% of the work is done by volunteers, and our research shows that most people decide to volunteer when asked by a friend. So, for all of you who are volunteering in your community, thank you. For all those not currently volunteering, I am asking you to please volunteer at a local charity. Your community will be a better place if your skills are put to work. There isn’t a charity that won’t be stronger if there’s a CPA serving on its board of directors. Encourage your staff to volunteer; it just might change their lives in ways they never imagined. Again, thank you so much.
For information on resources CPAs can use to help victims recover from hurricanes and other disasters, go to www.aicpa.org/news/2005/disaster_recovery_resources.htm .