Where forth art thou?: Aren't charities supposed to be non-profit organizations?

Tuesday, December 20, 2005

Aren't charities supposed to be non-profit organizations?

I know I am supposed to be on hiatus now but KMPG's audit findings on NKF managed to stir up such strong emotions in me that I feel that I will be doing an injustice to my readers and myself if I were to take no actions (passive reading).

Therefore I am going to write about my personal feelings after reading The Straits Time's extensive coverage/summary of KMPG's major findings.

You see, I was a donor myself. I contributed financially to NKF and even helped in the process of raising funds (through NKF donation cards) because I believed that the funds raised will go meaningfully towards helping Kidney Patients. But today I learnt that only 10cents out of every dollar donated goes towards helping the patients.

I also learnt that a substantial amount of funds raised went towards the salary packages of the previous top management team - towards the luxury cars they drove, their first class air tickets, their $70,000 Las Vegas "study" trip amongst other things.

But most importantly of all, I learnt that they have blatantly deceived the whole of Singapore, citing inaccurate figures and statistics to mislead and misrepresent.

I cannot tell you how it was like as I took in each and every word of each and every article devoted to the NKF issue today. It was more than anger. It was more than the feeling of being deceived. I felt outraged. Especially when I read that NKF was turning in a profit from selling the medical drugs that patients need. A profit the top management team used to finance their own extravagant lifestyles.

As far as I know, the top management team is definitely legally liable for their actions/decisions and should be dealt with accordingly. I see no reason for leniency just because NKF is a high profile charity organization. While we are waiting to see what actions, if any at all, will be taken towards NKF's former board of directors, let's look at a layman's (aka my) analysis of the situation.

I looked up the definition of fraud in an auditing textbook:

Fraud denotes a false representation of a material fact made by one party to another party with the intent to deceive and induce the other party to justifiably rely on the fact to his or her detriment.

According to common law, a fraudulent act must meet the following five conditions:

1. False Representation. There must be a false statement or a nondisclosure.
2. Material Fact. A fact must be a substantial factor in inducing someone to act.
3. Intent. There must be the intent to deceive OR the knowledge that one's statement is false.
4. Justifiable reliance. The misrepresentation must have been a substantial factor on which the injured party relied.
5. Injury or loss. The deception must have caused injury or loss to the victim of the fraud.

Fraud in the business environment has a more specialized meaning. It is an intentional deception, misappropriation of a company's assets or manipulation of its financial data to the advantage of the perpetrator.


The textbook goes on to point out that two key questions in a checklist to uncover fraudulent activity during an audit includes: "Do any key executives have close associations with suppliers?" and "Do one or two individuals dominate the company?"

From my personal understanding, even if the former board of directors escape charges of misappropriation of NKF funds, at the very least, they can be charged for providing false information/inaccurate claims/lying under oath in a court of law and thus holding the court in contempt (SPH has published the claims that NKF made and the actual findings that KMPG uncovered).

Of course we know that the claims were not directed at the court alone. It was directed at each and every Singaporean, especially those that have once forked out their hard earned money to give to the NKF in the belief that it will be put to proper use towards our kidney patients. The injury to us is the anger/hurt that we suffered upon coming to terms with the truth as to how the funds were actually used (instead of how they were claimed to be used) and the loss to us is the opportunity cost of the money we have donated had we known better.

The public will not be appeased until there is proper legal recourse.

Related News:
KPMG's report on investigation into the National Kidney Foundation (NKF)
NKF's press release
Former NKF CEO got more money than he appeared to: report
Report finds extravagance, lack of governance at Singapore's NKF
Two women in the fast lane
Regulators wasted opportunity to prevent NKF saga: KPMG report
Former NKF Patron did not know of Durai's salary until court case
Durai's retorts to the KPMG report
Health Ministry to present govt's response to NKF report
Health Minister says no one above scrutiny in NKF saga
'Accounting inconsistencies' in NKF's 2004 financial statements


Trackbacks/Related Entries:
Charitable Charity (Jeff Ooi)
Oops, TT Durai did it again!


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33 comments:

jim said...

make no mistake about it: despite the pleas of the interim chairman, it's a no brainer that nkf don't need any more donations.

they can invest part of the reserves - yes, even bonds can sustain them forever.

take no more money from the public - that's the least they should do

Anonymous said...

There will never be justice. The peanuts are actually melons in disguise.

Anonymous said...

that durai is a cheebye!

its really sad that such thing can actually happen in singapore.. he was suppose to help kidney failure patients but now he is going to make them suffer and die cos ppl will not donate like b4 liao.. they will think 3 times 1st then decide wanna donate or not and even if donate also very little like peanut (really peanut not that cheebye durai's "peanut")..

haiz.. i'm still waiting wat justice is going to be done on that cheebye.. i mean durai..

DirtyDancer said...

I feel cheated, deceived, and very foolish. Like you, I do believe that someone must be brought to justice.

Anonymous said...

dun believe everything u read on the newspaper.
there may still be a lot of things that are still being covered up.

Anonymous said...

The board of directors and the executive committee were paid to discharge their duty, and they didn't do it--instead passing on the buck. The thing they should be made to do now is pass the buck back--return all the money they were paid from the time when the problems started (call it backdating if you will). And with interest.

Anonymous said...

to think, all these mediacorp artistes risked life and limb so these bastards could live it up...

Anonymous said...

the mediacorp artistes were paid quite a lot for the 'risking their limbs n legs'. if i remember what was reported on the news correctly, abt a quarter of each dollar donated is spent as the fundraising costs. cant be sure though

Anonymous said...

don't you think that all involved (and I mean the whole committee) should also be held to account. The whole point of a committee is for check and measures to exist. So, if some of that committee turned a blind eye, could not be bothered to get more involved in checking and measuring, then aren't they negligent too? Don't get me wrong, I believe Durai must be held accountable, but for the rest of the negligent to get off scott free and only one to be fried seems like propagating a rotten system.

Anonymous said...

No no no... you all got it wrong. NKF is blameless. The one we should go after is the whistleblower contractor who install the gold taps. How dare he shake the foundations of our stable society. Now even the regulatory bodies have been implicated in not uncovering this earlier. We should catch that contractor and put him in jail, for being so kay poh.

Anonymous said...

more posts about xiaxue please :)

Anonymous said...

How about post more about the evil maniac woman ( xiaxue ) that appearntly she will win the best asian blog that also don't deserve it !!

and by the way i will never ever donate agian to that cheap con org !!

Anonymous said...

Does anyone knows how much the mediacorp actors/actress gets when they do a charitable act like performing for NKF? I thought their act are really all for charity...??? Or issit not?Im very sure alot of people wants to know!!!

Anonymous said...

I hope they castrate TT Durai along with the whole board. Man wish i was the one with the knife. Does anyone expect him to be charged? Mrs Peanuts is backing him.

Anonymous said...

I get this message at the kopi shops:

If Durai and his gang are let off lightly, then don't expect the public to support the NKF and other charity organisations in future.

Anonymous said...

wahlau! Use our donation to fly first class, not just DULAN but the whole group, I can only DREAM of flying first class.......

Malayan Tapir said...

They should forcefuly extract TT Durai's (and possibly the other committee members who perpetrated these crimes) kidneys for donation to those waiting for transplants. And then make him/them live off dialysis for the rest of their lives. Unsubsidised, of course.

mork said...

Oh look, the fucking hypocrite xialanxue has finally reopened the comments to public.

*snigger*

I thought you're gonna turn your back on "Freedom of Speech"

nic84 said...

what an apt name mork
dont make a mockery of urself here
ppl talking about nkf u dono anything then don't show your ignorance

12" said...

now they're trying to win people over by portraying the rest of the employees as angels.

"ooo, look, we werent aware of a single thing that was happening. i work here because i'm such an angel and angels care for the kidney patients. now durai did that, making me feel betrayed and disgusted. but hey, we'll still legit! donate so i can still have my 5% raise when the new year comes! blahblahblah."

Anonymous said...

why do you need donation when you're a physically able working adult?
-Elaine

simplesandra said...

Some of the issues (like the double tax deduction) are offences that are serious enough to warrant criminal proceedings, if you ask me--especially given NKF's high profile as a national charitable organisation.

What with patients getting only 10cents from every dollar donated--this is preposterous....

Only wonder if we'll see Durai defending himself in court, 'cos I'm pretty sure this is only the tip of the iceberg.

So much for Singapore Inc being incorruptible. =)

major said...

35% of the doantion is gaven to TCS is i amnot wrong

Anonymous said...

i am quite convinced that xlx received a very nasty threat from the blogging community not to continue writing "hate" posts. which is why xlx is veering towards moralistic posts now. in essence, there is really no such thing as free speech like what xlx was trying to advocate when he/she set up this site.

jim said...

(1) ok, now you've convinced yourself, you can go away

xlx was already writing posts you claim to be moralistic ages ago

about the so-called "hate" stories: they may have an angle to them. but, in trying to givr every party a voice, they were reasonable and balanced

ah, now can we go get durai to speak here. haha

(2) someone go tell nkf to employ a decent investment fella to help boost their reserves. don't take any more of the public's $$$

Scarletr0se said...

I felt angry when I saw what that durai did. Damn!

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Anonymous said...

man.. it's fucking spammers and flamers like the one above me that give anonymouses a bad name

FUCKING SPAMMERS AND FLAMERS DON'T BE GAY

Anonymous said...

it's quite boring to talk about this issue over and over again..


can you post something more interesting?

Pissing on you ass said...

dude what is agsm?

you never say leh.anyway....

the nkf fiasco is nothing short of the lee junta's peasants sucking scheme.now that the cash cow is sluaghtered,leeky will be furious with "you know who" for ruining his money sucking scheme.

on the other hand,the lee junta are pretty quick to admit "oversight" must be press control in case other dirty linen are hung out to dry.

uniquely shittyland indeed.

long live the scums

Anonymous said...

to write something worth writing or read, you can stop the plagiarism

Anonymous said...

what plagiarism? what fuck you talking?

Sharry said...

It's not only Mediacorp who gets a cut. I think the phone companies get a slice of the juicy pie too. So it works out brilliantly for everyone except those innocent donors. EAT THE RICH!