The Clueless and the Culpable or What Happens when Financial Transparency Goes Out the Window

The Clueless and the Culpable

or

What Happens when Financial Transparency Goes Out the Window

Recent threads at the forum-susan-boyle.com have been so full of errors as to make this old bookkeeper gnash her teeth.  I’m going to correct some of them here, in the hope that the poor souls who are trying to make some sense out of the financial situation have some idea of what’s going on.

I resigned because the staff broke the agreement they made prior to the auction, which was for me to provide financial accountability, while they got the majority of seats and the director’s position on the Board.  When the staff—one or more administrators and one or more technical people—locked ALL of the financial team out of the financial accounts while I was in the midst of doing the Paypal entries, I could no longer guarantee that accountability.  This was a critical issue because staff has since provided false information regarding the Paypal accounts and their use.

The most blatant false statement was made by a techie who is a nurse by profession, not a bookkeeper.

Just as it would not be appropriate for me to give a patient an injection, it is inappropriate for her to make a statement concerning bookkeeping, particularly when it is untrue.  She stated that the Paypal account was not to be used for donations for operating expenses or loan repayment, and the donations were only small amounts of $7 or $8.   The records from Paypal show that the very first donation made was for $50, and was specifically designated for operating expenses by the donor.   From the beginning this was a concern for both lchris and myself, but the staff refused to allow lchris to modify the software to distinguish between the two types of donations, thereby commingling funds.  The lockout, and subsequent denial of what actually happened, appears to be a cover-up for this error by people who don’t know (or perhaps don’t care) squat about accountability.

Major pronouncements have been made by staff who are not even citizens of the United States, let alone knowledgeable about accounting,  concerning US tax law regarding non-profits.  Donations can be made to any corporation, whether it is for profit or not.  If the corporation is not tax-exempt, and the  income is more than the expenses, then taxes will need to be paid.  If there is $1000 left after expenses at the end of the year, then 15% of that, or $150, would be due in taxes.  It doesn’t make any difference whether it comes from ads or donations.  Ad money isn’t refused because you have to pay taxes on it.  Then why should donation money be refused for that reason?   In fact it was not refused.  That is a fiction.  It was accepted, and if it was used as a donation to a charity to impress Susan Boyle, then it was misappropriated.  If it is still sitting there, then it is up to the members who made the donations, NOT THE STAFF OR THE BOARD, to decide where they want their money to go.

Much of the confusion could have been avoided by inviting me to all meetings in which finances were discussed, as none of the Board members or staff, including the Treasurer, are bookkeepers.  This is normal for the NPO’s I have been associated with.  (Assuming finances were ever discussed.  The content of my reports shows up in the minutes just recently released, but since the Board never gave any feedback on them to me or the members, I don’t know if they were discussed or not.)

The site IS generating income.  At the beginning of November and again at the beginning of December I recommended to the Board that we began repaying our loans because we had sufficient funds to do so after expenses—about $345 at the end of November, and at least twice that by now.  In addition there was a surplus of over $700 in the Paypal account, and more than $450 of unused loan funds.  The staff loans are very small (some less than $100) and several could have been paid off by now, or partial payments could have been made to the larger lenders.  The Secretary, unfortunately is as inaccurate in her statements about finances as she is in her Board minutes.  There is absolutely no documentation that the staff has “paid off” the members who donated on their behalf.  All they have done is add their little portion to the larger amount their anonymous donor has contributed.  Again, staff had absolutely no right to donate the excess Paypal funds to Susan’s charity since some of those funds were intended for another purpose.  Clulessness or culpability on the part of the staff?  That is for the forum members to decide.

God help the new bookkeeper.