A $900M error, poor system design, and failed internal controls intersected in a recent court case decided in New York. Citibank, in its role as administrator for loans that a group of lenders, or syndicate, had made to Revlon, was responsible for coordinating between lenders and Revlon.
errors or omissions
Charities need to be vigilant when accepting donations in kind. These include any non-monetary items, such as art, rare books, equipment and materials, personal objects of value, real property and computer-related assets. Receiving such donations is quite acceptable, but only after proper due diligence and professional advice is sought and followed. Donations in kind must be properly valuated by independent third party valuators specialized in such work. For art and other related assets, there are additional steps that must be followed in regard to seeking approval of the government agency responsible for monitoring such acquisitions, the Canadian Cultural Property Export Review Board. At least two separate valuations should be obtained. These independent valuations should be the basis for determining the amount on the charity receipt issued to the donor.
Some assets are easier to valuate than others. For example, the donation of real property can be assessed by real … Continue reading “Donations in kind and appropriate due diligence”