Lack of mandatory controls, audit requirements, leave youth sports programs open to fraud

Lack of mandatory controls, audit requirements, leave private youth sports programs open to fraud
Written byShawn Cohen

New City Little League President Lon Hofstein spent much of his week on damage control, holding emergency board sessions, contacting vendors and working the bleachers at three baseball games at Zukor Park to calm parents who were rattled by allegations that the league's treasurer had stolen $100,000.

"I assured them that the board of directors is committed to making sure the programs run smoothly," Hofstein said.

The arrest of longtime treasurer Joyce Bidnick, however, shed light on a problem that runs deeply not only in New City, but in nonprofit youth sports programs across the region and nation.

The problem: Many of these locally run programs have little or no financial oversight, minimal reporting requirements and no annual audits.

"In this case, the treasurer was in this position for eight years and had been stealing for eight years," Rockland County District Attorney Thomas Zugibe said. "Nobody was watching the store, except for the person that was watching the money. There are no controls, and that's the problem."

Little League International, which charters thousands of baseball and softball leagues in the United States with 2.35 million players, issues a manual that recommends ways to prevent fraud, but imposes no requirements on volunteers who run the local leagues.

"The local league is responsible for its finances," Little League International spokesman Chris Downs said. "We don't audit. We leave it in the hands of the local league — the board of directors elected by members of the league — to run their league and be responsible for the operation of their league, including their finances."

The same is true for the national Pop Warner Little Scholars, which oversees youth football programs.

Jon Butler, the executive director of Pop Warner who is also vice president of the National Council of Youth Sports, said theft in youth sports is increasingly common because more volunteers are recognizing how to exploit the lax system.

"I saw that in the news this morning," Butler said Thursday of Bidnick's arrest. "Theft and misuse of funds is a growing problem for all youth sports organizations, and it's a topic of regular discussion at our (NCYS) meetings. It used to be rare that we'd hear of it, either through Pop Warner or NCYS. Now I hear about one problem every week or two nationally. It's a shame because, in most cases, those kids helped raise that money and it goes towards uniforms and equipment to allow them to play in a very wholesome, healthy activity."

One factor that helps make youth sports leagues popular — that they are run exclusively for and by members of the community — is also a primary reason they are ripe for abuse.

"All youth sports organizations are manned by volunteers at the local level," Butler said.

"Frequently, there is not the level of accountability and oversight that you would hope there would be."

Getting experienced volunteers is part of the challenge.

"Many do not have enough (directors) to run their programs," said Joe Sagaria, administrator for the District 18 Little Leagues in Rockland County and Tuxedo in Orange County. "Parents would rather pay the money and not have anything to do with helping out. It's not like in the 1950s and '60s, when the leagues came into existence and participants were interested in volunteering. Parents basically say, 'I'll give you the money, don't bother me.'"

Bidnick, 58, a married mom who had been treasurer since 2003, was charged Tuesday with second-degree larceny, accused of stealing league money by writing checks to herself and to cash without authorization. She is accused of falsifying monthly account balances and reports she gave to the board.

League officials became suspicious and reported her to authorities when Bidnick tried to replace the stolen money, Zugibe said.

She is the second Rockland league treasurer in less than two years to face larceny charges.

Karen Ramos, 43, with the Stony Point Little League, was charged in July 2009 with stealing $156,150 from the organization. She pleaded guilty in June to grand larceny, avoiding prison by repaying the money with the help of her parents.

Dr. Russ Petro, a veterinarian from Stony Point, said he was so upset by that arrest that he chastised his 12-year-old son's Little League coach, who doubles as a board member.

"Geez, don't you have any checks and balances?" he asked the coach.

Petro, who pays a couple of hundred dollars a season so his son can play baseball, said, "I still get a little apprehensive about where the money is going."

Over in White Plains on Friday, Dr. Jeffrey Schoengold hadn't heard of the recent arrest. He was focused on his 10-year-old son, Joe, who was playing third base for the Volcanoes in a game against the Thunder.

"That's my son!" Schoengold, a local dentist, shouted after his son tagged out a runner trying to steal third.

He said he was disappointed someone would steal from youth sports, but acknowledged he has paid no attention to how his Little League money gets spent.

"I have enough trouble figuring the logistics of all the games," said Schoengold, who has four children in the league. "I would hope there's good oversight. With most parents, that's not on our minds. I hope that it does open eyes here, that the right people will be concerned."

Local sports leagues are generally not required by the federal or state government to undergo annual audits because of their size.

"A lot of Little Leagues and youth organizations do not have the level of revenue that requires an independent auditor," said David Ashenfarb, former chairman of the New York State Society of CPAs' nonprofit organizations committee. "That's the first problem or weakness in the system."
While the state Attorney General's Office says it will pursue all allegations of fraud, no one expects the agency will start investigating youth sports on a systematic level. Many leagues don't even have to register with the A.G.'s charities bureau because they make less than $25,000 a year.

"You're not going to get a lot of bang for your buck trying to search out smaller entities that haven't registered," Ashenfarb said.

So the policing of the leagues generally starts within the members themselves. In Stony Point, the board enacted new safeguards after its treasurer was arrested. In New City, Hofstein said his board has just appointed a committee to oversee finances.

There have been no recent reports of serious financial abuse in the sports leagues of Westchester and Putnam counties. Officials say this is at least partly because many of the organizations already institute recommended safeguards, such as requiring two signatures on checks and hiring accountants to audit their books.

"All money that's either taken in or spent is accounted for in a biweekly report," said Chris Cooper, president of the Eastchester Blue Devils, which runs a Pop Warner program. "This way everybody's on the same page."

Al Tarantino, treasurer of the Brewster Little League, said his board reviews all receipts, requires double signatures on checks and hires a CPA to do an annual audit.

"I think every Little League team should be audited every year, because the temptation is there," Tarantino said.

Rockland's district attorney said the abuse that led to two arrests in his county was easily preventable.

"If there were double signatures required, this would never have happened," Zugibe said. "It is within the power of these boards to stop this from happening."