Africa Action: Activism for Africa Since 1953
Report of Current Situation at Africa Action
December 14, 2010
The Board of Africa Action prepared this report to update allies and supporters of Africa Action on the current status of the organization, recent developments as regards the financial crisis and our plans going forward. The Board of Africa Action will send out further updates as needed.
Background
Africa Action is an Africa-focused not for profit organization formed in 2001 after the merger of three leading U.S. based Africa-focused organizations, namely the American Committee on Africa (established in 1953), The Africa Fund and the Africa Policy Information Center. Africa Action has always been small, with only four to six full time staff and some part time consultants from time to time. However, the organization has produced some of the leading narratives on new approaches for engagement with Africa for the United States. Africa Action has held successive U.S. governments, and governments in Africa, accountable, and has produced publications and provided policy analysis. Africa Action has successfully combined accessible and credible information and analysis with the mobilization of public pressure to change U.S. Africa policy. This strategy has brought concrete results over the years from ending the scourge of apartheid to pressuring for U.S. action on HIV/AIDS and on the genocide in Darfur. Africa Action worked with Congress to craft a more just U.S. policy toward Zimbabwe while also engaging the media to amplify progressive voices on climate change and clean energy in Africa.
The Current Situation and Financial Crisis
What happened?
As we informed you in our Board statement of September 1, 2010, the Africa Action Board became aware at the end of August of a serious fiscal crisis and corporate crime. The financial statements, which had been presented to the Board in 2009 and 2010, did not reflect the true activities in and actual balances of Africa Action’s accounts. We discovered that funds had been embezzled from the organization.
The amount of our loss is substantial. Over the past year, funds were taken from the agency using credit card fraud as well as check fraud. At the same time basic internal review systems were not upheld. Due to potential legal concerns that could impact our efforts to seek redress, the Board cannot divulge any more details at this time.
Steps taken
Within a week of learning of the theft, the Board contacted law enforcement authorities to initiate legal proceedings against the alleged perpetrator of the fraud. The Board accepted the resignation of the Executive Director, who is not under suspicion. We took action to secure the physical office space and also changed all financial and electronic pass codes. Additionally, the Board has implemented a series of measures to ensure fiscal accountability and the viability of the organization going forward.
The Board hired an independent accountant and bookkeeper who has conducted an initial forensic accounting of the organization’s activities going back three years. The report of that independent accountant is being reviewed by the Board treasurer, himself a CPA. The board has also contracted the firm Haymaker and Associates to do a forensic audit that we hope to have completed by December 31, 2010.
The board treasurer also recommended establishing new internal systems and safeguards to ensure financial security and to protect against such fraud in the future, which the Board has implemented. Specifically, the Board has implemented a positive pay system with the Bank of America: going forward, all checks not signed by two authorized Board members will not be honored. In addition, we have closed all company credit cards and implemented a policy that dramatically reduces the spending limits of any new cards. The Board has also implemented new guidelines that include a review of original source documents by the Board along with annual full audits of all accounts.
The Board has also contacted The Hartford Insurance Company where Africa Action has a policy to cover general claims, including employee fraud. The Board is working with the law firm of Harmon Curran to review Africa Action’s insurance policy documents in order to maximize this claim.
Pursuing all remedies
The Board is also determined to recover the embezzled amounts or seek what remedy or redress may be possible through legal means. To this effect, the Board has met with DC Metropolitan Police, the DC Corporate crime unit detectives, and we have also begun working with the investigative unit of the Secret Service’s financial crime division with the aim of preparing the case for action by the Attorney General’s office. We intend to pursue this crime to the fullest extent of the law.
New leadership and renewed commitment
While addressing the immediate needs of the organization, the Board recognizes the need to strengthen and recruit new actors to the Board. The Board, at its meeting on October 14, appointed Emira Woods, the current Board Chairperson, as interim Executive Director to help the organization navigate its internal and external challenges. Ultimately the Board will need to select a new Executive Director with strong program and development experience, as well as excellent management, and in particular fiscal, capabilities.
Towards this goal, the Board has convened a temporary advisory committee that it is regularly consulting on a confidential basis, in order to guide us at this critical time. The committee members were selected because of their experience handling similar matters and/or due to past affiliation as staff or Board of the organization or its predecessor groups.
The Board of Africa Action, with the support of the above advisory group, is confident that all measures taken will result in the rebirth of a new and re-invigorated organization with the historic commitment of promoting policy and providing information and analysis on Africa to a diverse U.S. constituency.
We need, now more than ever, the support of individuals and allied organizations. We urge you to have confidence in us and this process, which may be slow and tedious, but will be pursued in a way that upholds the values and principles that have helped Africa Action persevere for over half a century.
How YOU can help
While Africa Action has been dealt a tremendous blow, we remain confident in the importance of this organization for the 21st century. We are committed to advancing the vital work of this organization and urge you to stand with us. We are strengthened by the fact that many of you have continued to place your trust and valuable resources in the organization with your continued monthly charitable gifts. Similarly your CFC contributions have helped to sustain us. We want to take this opportunity to thank you and also to assure you that your contributions are well protected. We are also strengthened by the Africa Action student network, which received advocacy tool-kits at the end of August and has begun to take action on college campuses; in spite of dramatically diminished staff support. This show of solidarity will be the foundation on which we rebuild a stronger and better Africa Action. In the coming weeks, we will make some core programmatic decisions and begin to re-invigorate our web presence.
Conclusion
We value you tremendously, the members/supporters of Africa Action who number over 36,000 people and major donor partners, and we will do our best to keep you apprised of developments as we move forward.
The Board prepared this statement in consultation with the advisory board in recognition that full and open disclosure of the steps we are taking is a necessary and critical part of building confidence and soliciting ongoing support in the organization. Together, we can rebuild Africa Action and ensure that this vital organization reaches its fullest potential.
Thank you for your confidence and solidarity at this critical time.
Signed by all the board members
Adotei Akwei
Ajamu Baraka
Gary Giscombe
John Riggan
Makani Themba-Nixon
Emira Woods
The Board of Africa Action prepared this report to update allies and supporters of Africa Action on the current status of the organization, recent developments as regards the financial crisis and our plans going forward. The Board of Africa Action will send out further updates as needed.
Background
Africa Action is an Africa-focused not for profit organization formed in 2001 after the merger of three leading U.S. based Africa-focused organizations, namely the American Committee on Africa (established in 1953), The Africa Fund and the Africa Policy Information Center. Africa Action has always been small, with only four to six full time staff and some part time consultants from time to time. However, the organization has produced some of the leading narratives on new approaches for engagement with Africa for the United States. Africa Action has held successive U.S. governments, and governments in Africa, accountable, and has produced publications and provided policy analysis. Africa Action has successfully combined accessible and credible information and analysis with the mobilization of public pressure to change U.S. Africa policy. This strategy has brought concrete results over the years from ending the scourge of apartheid to pressuring for U.S. action on HIV/AIDS and on the genocide in Darfur. Africa Action worked with Congress to craft a more just U.S. policy toward Zimbabwe while also engaging the media to amplify progressive voices on climate change and clean energy in Africa.
The Current Situation and Financial Crisis
What happened?
As we informed you in our Board statement of September 1, 2010, the Africa Action Board became aware at the end of August of a serious fiscal crisis and corporate crime. The financial statements, which had been presented to the Board in 2009 and 2010, did not reflect the true activities in and actual balances of Africa Action’s accounts. We discovered that funds had been embezzled from the organization.
The amount of our loss is substantial. Over the past year, funds were taken from the agency using credit card fraud as well as check fraud. At the same time basic internal review systems were not upheld. Due to potential legal concerns that could impact our efforts to seek redress, the Board cannot divulge any more details at this time.
Steps taken
Within a week of learning of the theft, the Board contacted law enforcement authorities to initiate legal proceedings against the alleged perpetrator of the fraud. The Board accepted the resignation of the Executive Director, who is not under suspicion. We took action to secure the physical office space and also changed all financial and electronic pass codes. Additionally, the Board has implemented a series of measures to ensure fiscal accountability and the viability of the organization going forward.
The Board hired an independent accountant and bookkeeper who has conducted an initial forensic accounting of the organization’s activities going back three years. The report of that independent accountant is being reviewed by the Board treasurer, himself a CPA. The board has also contracted the firm Haymaker and Associates to do a forensic audit that we hope to have completed by December 31, 2010.
The board treasurer also recommended establishing new internal systems and safeguards to ensure financial security and to protect against such fraud in the future, which the Board has implemented. Specifically, the Board has implemented a positive pay system with the Bank of America: going forward, all checks not signed by two authorized Board members will not be honored. In addition, we have closed all company credit cards and implemented a policy that dramatically reduces the spending limits of any new cards. The Board has also implemented new guidelines that include a review of original source documents by the Board along with annual full audits of all accounts.
The Board has also contacted The Hartford Insurance Company where Africa Action has a policy to cover general claims, including employee fraud. The Board is working with the law firm of Harmon Curran to review Africa Action’s insurance policy documents in order to maximize this claim.
Pursuing all remedies
The Board is also determined to recover the embezzled amounts or seek what remedy or redress may be possible through legal means. To this effect, the Board has met with DC Metropolitan Police, the DC Corporate crime unit detectives, and we have also begun working with the investigative unit of the Secret Service’s financial crime division with the aim of preparing the case for action by the Attorney General’s office. We intend to pursue this crime to the fullest extent of the law.
New leadership and renewed commitment
While addressing the immediate needs of the organization, the Board recognizes the need to strengthen and recruit new actors to the Board. The Board, at its meeting on October 14, appointed Emira Woods, the current Board Chairperson, as interim Executive Director to help the organization navigate its internal and external challenges. Ultimately the Board will need to select a new Executive Director with strong program and development experience, as well as excellent management, and in particular fiscal, capabilities.
Towards this goal, the Board has convened a temporary advisory committee that it is regularly consulting on a confidential basis, in order to guide us at this critical time. The committee members were selected because of their experience handling similar matters and/or due to past affiliation as staff or Board of the organization or its predecessor groups.
The Board of Africa Action, with the support of the above advisory group, is confident that all measures taken will result in the rebirth of a new and re-invigorated organization with the historic commitment of promoting policy and providing information and analysis on Africa to a diverse U.S. constituency.
We need, now more than ever, the support of individuals and allied organizations. We urge you to have confidence in us and this process, which may be slow and tedious, but will be pursued in a way that upholds the values and principles that have helped Africa Action persevere for over half a century.
How YOU can help
While Africa Action has been dealt a tremendous blow, we remain confident in the importance of this organization for the 21st century. We are committed to advancing the vital work of this organization and urge you to stand with us. We are strengthened by the fact that many of you have continued to place your trust and valuable resources in the organization with your continued monthly charitable gifts. Similarly your CFC contributions have helped to sustain us. We want to take this opportunity to thank you and also to assure you that your contributions are well protected. We are also strengthened by the Africa Action student network, which received advocacy tool-kits at the end of August and has begun to take action on college campuses; in spite of dramatically diminished staff support. This show of solidarity will be the foundation on which we rebuild a stronger and better Africa Action. In the coming weeks, we will make some core programmatic decisions and begin to re-invigorate our web presence.
Conclusion
We value you tremendously, the members/supporters of Africa Action who number over 36,000 people and major donor partners, and we will do our best to keep you apprised of developments as we move forward.
The Board prepared this statement in consultation with the advisory board in recognition that full and open disclosure of the steps we are taking is a necessary and critical part of building confidence and soliciting ongoing support in the organization. Together, we can rebuild Africa Action and ensure that this vital organization reaches its fullest potential.
Thank you for your confidence and solidarity at this critical time.
Signed by all the board members
Adotei Akwei
Ajamu Baraka
Gary Giscombe
John Riggan
Makani Themba-Nixon
Emira Woods
