Abbotsford Shelter Society is a society that provides short term housing for homeless people who are not practising any substance addiction. The society provides up to 60 days of shelter, at which time the sheltered individual must give up their bed. The mission is to house and rehabilitate. The program is supported totally by donated dollars and receives no government funding. The ten rooms operated by the shelter are in a building that the society rents for $3,000.00 per month. Anecdotal reports suggest that 70% of the clients who leave the facility return to a homeless life on the street. Approximately 30% are able to move to independent accommodation and establish some level of normal life.

The society is strapped financially since its program in many ways competes with the Salvation Army which draws large funds. The shelter society has no church affiliation and does not receive support from any religious community.

The society has five employees, being an executive director, a bookkeeper, a cook and two in- house staff that supervise the residents and provide some level of counselling. The annual budget is $250,000.00.

Last year two negative events occurred. One was that the bookkeeper of that time was discovered to have systematically defrauded the society of over $40,000.00 over two years. This was done by reimbursements to her for shelter expenses that were never incurred by her and by the weekly removal of food from storage that was paid for by the society for its kitchen. That bookkeeper was fired and replaced but she is suing the society for unjust dismissal, denying that she did anything improper. News of the theft has begun to leak out into the community and the executive director is concerned that such news could impact negatively on the donor base.

The second negative event was that an older male client who was housed in the facility for sixty days met and molested a small child in the immediate neighbourhood of the facility. The individual is no longer in the facility, but the staff had overlooked obvious signs of his predilection to child abuse while he was in the shelter, including some graphic magazines. News of the event has been somewhat contained but the offenders trial starts in two months. Some neighbours have already commenced to express concerns about risks to their families.

The need for the shelter is great but the society sees itself as having its very future threatened at this time. The society needs to deal with its public image, finances, and its fundraising. As a volunteer consultant to a very worthy but unfortunate society please give considered advice in the following areas:

1. Is there potential liability for the society to the parents of the abused child? Is there any personal liability potentially attributable to the Board of Directors?

Assigned: October 23, 2020 Due: October 31, 2020

2. What financial systems should the society put in place to reduce or eliminate the possibility of a reoccurrence of being victimized by financial irregularities as they suffered under their earlier bookkeeper? Consider all reasonable precautions.

3. What liability may there be to the bookkeeper, who is suing for unjust dismissal? What should they do to prepare to fight that claim or should they pay her money to end the bad publicity?

4. Construct an annual budget for this society, consistent with those numbers included in the case and with reasonable income and expenses as you may imagine that would be appropriate to this societys operation. Model the budget on an income and expense statement. Feel free to invent appropriate income and expense numbers that may be appropriate to this society.