HANCOCK COUNTY — A banking error dating back to late 2013 led to inflated account balances for 250 funds overseen by the Hancock County Community Foundation, officials said.
Bank records show approximately $145,000 was inadvertently credited to the foundation’s endowment funds, even though those dollars had actually been placed in foundation’s reserve account, said Tim Clark, the foundation’s board chair.
In 2014, the foundation deposited $145,000 into its reserve account with the National Bank of Indianapolis. The money, generated by administrative fees, went into the foundation’s reserve account as planned, but a computer glitch showed the $145,000 also was distributed among the endowment funds, giving the foundation credit for the deposit twice, Clark said.
Essentially, an average of $580 was added to each account balance of the foundation’s 250-plus endowment funds, Clark said.
Endowment funds are established by local nonprofit organizations, as well as individuals and families, who utilize the community foundation to invest on their behalf and administer gifts to causes they support.
The community foundation issued letters early this month to endowment-holders, alerting them to the error and the correct balance in their accounts.
The notice included a letter from the foundation restating the correct fund balance and a letter from National Bank of Indianapolis in which Vice President Douglas Tirmenstein took responsibility for the mistake, stating “the bank unintentionally provided the foundation with certain account balance information which necessitated an adjustment.”
The error was traced to an overstatement of net earnings from June 2013 through December 2014, foundation president Mary Gibble said in an email to the Daily Reporter. As of Dec. 31, 2015, the balance of all funds was correct, she said.
The foundation’s board learned of the banking error in the spring after a routine audit, and its finance committee spent weeks studying how best to handle the situation, Clark said. The committee decided to inform its donors at the end of 2015 so they would start the new year off with the proper balance, he said.
The Greenfield Parks and Recreation Department is among those that holds an endowment fund with the foundation and works closely with the organization.
Department director Ellen Kuker received a letter earlier this month and said she appreciated the foundation clarifying what happened and being upfront about the mistake.
Kuker said the issue would not impact the department’s future work with the foundation.
Clark said the foundation has received only a few phone calls from donors seeking more information about the error, but everyone has been understanding of the situation.
Gibble said although the error resulted in no loss of money, and the adjustment to correct the error was nominal, the foundation felt it imperative to make its donors aware of any unusual activity, Gibble said in the statement.
“Transparency is a key component of trustworthy stewardship,” she said.