ASSIGNMENT 14.1. CRAFTING INTERNAL CONTROL POLICIES TO PREVENT CONFLICT OF INTEREST In April 2011, the nonprofit organization Central Asia Institute, founded by Greg Mortenson, author of the book Three Cups of Tea, found itself under fire because of the way it had been spending its resources. Although the nonprofits Web site shows the schools in Afghanistan and Pakistan that the organization built and sometimes staffed, the nonprofits financial statements indicate that the majority of the funding went to domestic (American) outreachnamely, paying for speaking engagements and advertisements for Mortensons books. The three-member board (of whom Mortenson is one, as well as executive director) wants to reassure the donors that the institute is fulfilling its mission.13 As of early 2012, the Central Asia Institute has survived the scandal; a lawsuit is pending, and no criminal charges have been filed. However, other nonprofits can learn from this unfortunate case. Although it may very well be too late for the Central Asia Institute, what internal control policies should the nonprofits board have adopted that would have avoided these problems?

ASSIGNMENT 14.1. CRAFTING INTERNAL CONTROL POLICIES TO PREVENT CONFLICT OF INTEREST In April 2011, the nonprofit organization Central Asia In- stitute, founded by Greg Mortenson, author of the book Three Cups of Tea, found itself under fire because of the way it had been spending its resources. Although the nonprofit's Web site shows the schools in Afghanistan and Pakistan that the organization built and sometimes staffed, the nonprofit's financial statements indicate that the majority of the funding went to domestic (American) outreach-namely, paying for speaking engagements and advertisements for Mortenson's books. The three-member board (of whom Mortenson is one, as well as executive director) wants to reassure the donors that the institute is fulfilling its mission. 13 As of early 2012, the Central Asia Institute has survived the scandal; a lawsuit is pend- ing, and no criminal charges have been filed. However, other nonprofits can learn from this unfortunate case. Al- though it may very well be too late for the Central Asia Institute, what internal control policies should the non- profit's board have adopted that would have avoided these problems? ASSIGNMENT 14.1. CRAFTING INTERNAL CONTROL POLICIES TO PREVENT CONFLICT OF INTEREST In April 2011, the nonprofit organization Central Asia In- stitute, founded by Greg Mortenson, author of the book Three Cups of Tea, found itself under fire because of the way it had been spending its resources. Although the nonprofit's Web site shows the schools in Afghanistan and Pakistan that the organization built and sometimes staffed, the nonprofit's financial statements indicate that the majority of the funding went to domestic (American) outreach-namely, paying for speaking engagements and advertisements for Mortenson's books. The three-member board (of whom Mortenson is one, as well as executive director) wants to reassure the donors that the institute is fulfilling its mission. 13 As of early 2012, the Central Asia Institute has survived the scandal; a lawsuit is pend- ing, and no criminal charges have been filed. However, other nonprofits can learn from this unfortunate case. Al- though it may very well be too late for the Central Asia Institute, what internal control policies should the non- profit's board have adopted that would have avoided these problems