They should not be proud of the situation, however the fact that it happened does not mean that others on the board were negligent in their duties.
Here is what is needed in all associations: I proposed this at the two that I sat as an executive member on:
I feel that all associations should have a simply rule of all spending has to be approved by the executive before a cheque is issued and signed, no exceptions. At every executive meeting a balance of each account as a print out from the bank is presented so that any discrepancy can be seen early.
The both executives that I sat on had 3 signing authorities, President, Vice President and Treasurer. Any combination of the three could sign. I disliked that as I believe one should always be the Treasurer.
Then these same executives had the Treasurer only produce numbers on a sheet, I had it changed to a bank statement at each meeting and all cheques ( no matter of the size had to be approved at an executive meeting ) They used to have the executive members sign cheques with the Payee or the amount Blank (not filled in) as it was easier???
I do agree that the executive as a whole has to take some responsibility for this, but accusing others on the executive of wrong doing is not correct.
Play hard, play fair