SSA and IRS

I think that this is a valid concern. I would suggest a couple of
alternatives:

1. Make the magazine available on-line in pdf format. This should happen
regardless as a resource for our members to look up old articles.

2. Make the print magazine optional. I suspect that there are a
significant number of members who would elect electronic delivery just to
help out the SSA.

3. Consider reducing the publication schedule to every other month, or some
other schedule.

As a passive member, it would be very interesting to see the full budget
laid out in detail so we can see where our money is going. I, nor most
members, don't have a clue on how many employees the SSA has (3, 6, 12,
.......????). It sounds like what is needed is a 5-10% budget reduction or
revenue increase. That doesn't sound impossible.

The other observation that I have is the apparent large number of SSA
directors. This is crazy. There should be a board with a manageable number
of people (6-8) who should run the organization. That's not to say that
there might not be volunteer committees to run various activities outside of
this.

Mike Schumann

wrote in message
oups.com...
5-BG:

" I suggest going to an all electronic magazine... THE NEWSLETTER
FORMAT ALREADY EXISTS. There is about 1/2 mil per year here.."

I think that the SSA would lose a lot of members without the magazine
since it is one of the only tangible benefits the SSA offers to a large
proportion of its members. At $64/year, the SSA costs more than the
AOPA or EAA. If you don't own a glider then you can't even get the
insurance coverage "discount". Since most of the SSA members don't
compete in soaring competitions, this aspect of the SSA organization is
of no utility either.

What the SSA cannot afford to do is lose a substantial number of
members. Losing the magazine would be like a failing restaurant
cutting back on its food quality to save money.....

Lindy

5-BG wrote:
A read of the letter to members is interesting.
1. the total amount due on taxes BEFORE interest was 208,000 to feds and
56,000 to state.
2. 84,000 was received as a gift and deposited into ssa operating
accounts. of that only 27,000 was transferred to the foundation. The
difference is therefore 57,000.
3. At this time the board is saying that it appears as if 150,000 was
misappropriated by the cfo and he has been sued and arrested.

Put all this together and the SSA has been living beyond its means for
the past several years to the tune of about 171,000 dollars.
the letter goes on to say that the magazine will continue to be
published and member services maintained.

Outside of the alleged misappropriation of 150,000 the ssa was
evidently running a deficit of somewhere between 43,000 and 57,000 per
year ( depending upon the number of years).

now we have a capital debt plus interest plus interest to feds and
state to pay off in addition to this annual shortfall.

It is obvious that some substantial services need to be cut back or
eliminated.. Even without the misdeeds, it wasn't working.

I suggest going to an all electronic magazine... THE NEWSLETTER FORMAT
ALREADY EXISTS. There is about 1/2 mil per year here..

I have been looking for the minutes of the excom and full board
meetings. recent ones have not been posted . I assume that there is a
reason that this is not being done .

The last posted excom minutes stated that the full board was going to
face the recommendation by the excom to change the bylaws to drop the
necessity of an annual audit. I certainly hope that the full board
rejected this "penny wise and pound foolish" cost savings measure in
light of recent happenings.

there is a big difference between a "review" and an audit.
A review of financials simply accepts information prepared by staff.
An auditor is required to independently check the information against
original records and by other means.

An Audit also normally produces a cash flow statement and includes an
analysis and opinion of the financial viability of an organization. Not
only would an audit have nipped the alleged misappropriation in the bud,
but it would have also required the auditor to give a formal opinion to
the board and members regarding the issue of cash shortfall.

Bottom line from my read, this situation developed over time by the ssa
living beyond its means and robbing peter ( uncle sam) to pay paul.. AND
was complicated by bad conduct.

now is not the time to save 15 grand a year by forgoing future audits.
15 grand a year will NOT solve the problem of repayment and will only set
the stage for the next fiasco.



5bg


wrote in message
oups.com...
From the e-news:

"On 10/11/06, using funds loaned from the SSA Foundation, SSA paid
delinquent federal payroll withholding taxes of approximately $208,000,
and state withholding taxes of approximately $56,000. Our outside
accountants are completing the remaining delinquent federal and state
income tax returns (upon which no taxes will be due) for 2004 and 2005.
Once submitted, SSA will be up to date in all respects with state and
federal tax authorities. It is likely the IRS will require the SSA to
pay interest on the overdue taxes, but we are working to mitigate all
penalties. State tax payments will most likely not incur interest or
penalties.

The SSA was unable to secure a commercial loan on terms it could meet,
to pay its delinquent taxes. Had the SSA Foundation not financially
assisted the SSA with this loan, tax authorities could have seized SSA
funds held by the Foundation in a single investment account. The choice
before the Trustees of the Foundation was to either provide a loan to
the SSA with the expectation of repayment (with 8.25% interest - higher
than that presently generated by the Foundation's investment account
as a whole), or risk seizure of assets to cover what the Society owed.
If seizure was required, the amount taken from the Foundation could
total nearly $600,000, since no mitigation of penalties would likely be
possible in this situation, and the funds would be gone forever.

Addendum: Late-Breaking Information Not Appearing in the Printed Letter
to Members:
On 10/9/06, SSA Ex-CFAO Alan Gleason was served with a civil lawsuit
brought by the SSA. On 10/11/06, at the direction of the New Mexico
District Attorney, he was arrested by the Hobbs Police Department."


Frank Whiteley wrote:
Yes, all in tonight's SSA eNews.

Frank Whiteley
Greeley, Colorado

Pete Reinhart wrote:
All,
Does anybody know if IRS got their money on time?
I seem to remember that October 11th was the deadline.
Cheers!

--
Pete Reinhart
Austin, Texas

------=_NextPart_000_0011_01C6ED73.1E32DE70
Content-Type: text/html; charset=iso-8859-1
Content-Transfer-Encoding: quoted-printable
X-Google-AttachSize: 7522

!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"
HTMLHEAD
META http-equiv=Content-Type content="text/html; charset=iso-8859-1"
META content="MSHTML 6.00.2900.2963" name=GENERATOR
STYLE/STYLE
/HEAD
BODY bgColor=#ffffff
DIVFONT face=ArialA read of the letter to members is interesting.
/FONT/DIV
DIVFONT face=Arial1. the total amount due on taxes BEFORE interest
was
208,000 to feds and 56,000 to state./FONT/DIV
DIVFONT face=Arial2. 84,000 was received as a gift and deposited
into 
ssa operating accounts. of that only 27,000 was transferred to the
foundation.
The difference is therefore 57,000./FONT/DIV
DIVFONT face=Arial3. At this time the board is saying that it appears
as if
150,000  was misappropriated by the cfo and he has been sued and
arrested./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  Put all this together and the SSA has been
living
beyond its means for the past several years to the tune of about 171,000
dollars./FONT/DIV
DIVFONT face=Arial  the letter goes on to say that the magazine
will
continue to be published and member services maintained./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial    Outside of the alleged
misappropriation of 150,000 the ssa was evidently  running a deficit
of
somewhere between 43,000 and 57,000 per year ( depending upon the number
of
years)./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  now we have a capital  debt plus
interest plus
interest to feds and state to pay off in addition to this  annual
shortfall./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  It is obvious that some substantial services
need
to be cut back or eliminated.. Even without the misdeeds, it wasn't
working./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  I suggest going to an all electronic
magazine...
THE NEWSLETTER FORMAT ALREADY EXISTS.  There is about 1/2 mil per
year
here../FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  I have been looking for the minutes of
the 
excom and full board meetings. recent ones  have not been posted . I
assume
that there is a reason that this  is not being done ./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial The last posted excom minutes stated that the
full
board was going to face the recommendation by the excom to change the
bylaws to
drop the necessity of an annual audit. I certainly hope that the full
board
rejected this "penny wise and pound foolish" cost savings  measure
in light
of recent happenings./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  there is a big difference between a "review"
and an
audit.  /FONT/DIV
DIVFONT face=Arial A review of financials  simply accepts
information prepared by  staff.  An auditor is  required
to
independently check the information against original records and by other
means.
/FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  An Audit also normally produces a cash flow
statement and includes an analysis and opinion of the financial viability
of an
organization. Not only would an audit have nipped the alleged
misappropriation
in the bud, but it would have also required the auditor to give a formal
opinion
to the board and members  regarding the issue of cash
shortfall./FONT/DIV
DIVFONT face=Arial  /FONT/DIV
DIVFONT face=ArialBottom line from my read, this situation developed
over
time by the ssa living beyond its means and robbing peter ( uncle sam) to
pay
paul.. AND was complicated by bad conduct. /FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial now is not the time to save 15 grand
a year by
forgoing future audits. 15 grand a year will NOT solve the problem of
repayment
and will only set the stage for the next fiasco.  /FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial5bg/FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px;
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"
DIV<A
"lonebeagle1@ya hoo.com/A>
wrote in message A

oglegroups.com"news:1160628246.735229.209750@h48g 2000cwc.googlegroups.com/A.../DIV>From
the e-news:BRBR"On 10/11/06, using funds loaned from the SSA
Foundation,
SSA paidBRdelinquent federal payroll withholding taxes of
approximately
$208,000,BRand state withholding taxes of approximately $56,000. Our
outsideBRaccountants are completing the remaining delinquent federal
and
stateBRincome tax returns (upon which no taxes will be due) for 2004
and
2005.BROnce submitted, SSA will be up to date in all respects with
state
andBRfederal tax authorities. It is likely the IRS will require the
SSA
toBRpay interest on the overdue taxes, but we are working to mitigate
allBRpenalties.  State tax payments will most likely not incur
interest
orBRpenalties.BRBRThe SSA was unable to secure a commercial loan
on
terms it could meet,BRto pay its delinquent taxes. Had the SSA
Foundation
not financiallyBRassisted the SSA with this loan, tax authorities
could have
seized SSABRfunds held by the Foundation in a single investment
account. The
choiceBRbefore the Trustees of the Foundation was to either provide a
loan
toBRthe SSA with the expectation of repayment (with 8.25% interest -
higherBRthan that presently generated by the Foundation's investment
accountBRas a whole), or risk seizure of assets to cover what the
Society
owed.BRIf seizure was required, the amount taken from the Foundation
couldBRtotal nearly $600,000, since no mitigation of penalties would
likely
beBRpossible in this situation, and the funds would be gone
forever.BRBRAddendum: Late-Breaking Information Not Appearing in
the
Printed LetterBRto Members:BROn 10/9/06, SSA Ex-CFAO Alan Gleason
was
served with a civil lawsuitBRbrought by the SSA. On 10/11/06, at the
direction of the New MexicoBRDistrict Attorney, he was arrested by
the Hobbs
Police Department."BRBRBRFrank Whiteley wrote:BR> Yes, all
in
tonight's SSA eNews.BR>BR> Frank WhiteleyBR> Greeley,
ColoradoBR>BR> Pete Reinhart wrote:BR> > All,BR>
>
Does anybody know if IRS got their money on time?BR> > I seem
to
remember that October 11th was the deadline.BR> >
Cheers!BR> >
BR> > -- BR> > Pete ReinhartBR> > Austin,
TexasBR/BLOCKQUOTE/BODY/HTML

------=_NextPart_000_0011_01C6ED73.1E32DE70--

Mike.. you estimated a budget reduction of 5 to 10% would square things away..

Here is what I come up with in VERY ROUND NUMBERS:

50,000 operating shortfall over the past few years
25,000 INTEREST to foundation for a loan of ABOUT 300,000 which was needed to pay off feds etc ( we haven't paid interest yet and have sent in 264,000)
An annual principal payment to the foundation of about 50,000 which represents a 5 year payback of loan.

These figures total 125,000 which is about 13% of the annual dues of about 1 million.

To this I would strongly SUSPECT that we will need to provide for INFLATION over the past 12 months or for the next 12 months.. ..My guess is a minimum of 3% and perhaps 5% depending upon the mix of our actual expenditures.. lets say 4%.. 40,000

So by my reckoning, the society budget needs to trim expenditures by about 165,000 per year from last year and to assume that membership will stay constant at current dues rate. Or it could raise dues by 10 to 11 bucks per member and hope membership stays constant.

I believe that we are looking at a 16% problem. I believe that a problem of that magnitude requires looking at the big expenditures rather than nibbling away at the small ones.
Also, remember the board "saved 15,000 to 20,000 by forgoing an audit.. I would hope that this expense will be considered appropriate in the future.. that brings the annual shortfall in the 180,000 range.

for the current year, I would guess that there are some very significant one off expenses (legal and accounting) associated with the mess. probably significant and I would GUESS in the 50,000 range. There may have been some one off separation expenses associated with ED.

It appears as if the board is headed towards borrowing the deficit for this year . this will increase the annual shortfall in the out years.

Based upon what has been told to membership those are the implications.

Those inferences indicate MAJOR overhaul of resource allocation and/ or dues increase.

Basically the current board presided over an organization that overspent ( and misappropriated) about 10% of it's annual resources. The EXCOM has taken the position that they were simply not told of the problem.

I believe that the PROBLEM ORIGINATED with the board. I believe that the board did not make the hard financial choices and that the cfo probably decided early on to skip a payment to the feds.. Once that sort of situation develops, it is not unusual for the books to begin to be cooked to cover up the problem.. Dipping into the cookie jar as has been alleged, is a temptation that some cannot resist at that point.

The point I am making is that we have discussed the board's failure to SUPERVISE. What we have not discussed was the boards failure to live within a budget.

There are some warning flags currently flying. Namely why haven't they posted the minutes of recent excom and board meetings? My read of what has been posted is that several important discussions were omitted from the minutes and that The excom made some pretty heavy decisions and did not expose the membership to the debate.
This is NOT transparency. I am not questioning their right to make certain decisions, but I am questioning their reasoning in being slow to post minutes and then to edit the minutes so heavily.
in my view, for the ssa to remain viable, the membership needs to be involved in the resource allocation AND dues increase process. We now have a small committee charged with restructuring and managing finances. we have 3 volunteers monitoring the excom. It is my hope that very soon someone will do the arithmetic, that I approximated above, with real numbers, and then present the hard choices to the membership for discussion and perhaps even a poll. They should have a handle on the annual dollar problem by now and there are only so many programs in last years budget. It will be a painful and contentious process, but one that the members should have a say in.
Transparency and member interaction with the process is essential. Anything less smacks of paternalistic governance.

5bg


"Mike Schumann" wrote in message nk.net...
I think that this is a valid concern. I would suggest a couple of
alternatives:

1. Make the magazine available on-line in pdf format. This should happen
regardless as a resource for our members to look up old articles.

2. Make the print magazine optional. I suspect that there are a
significant number of members who would elect electronic delivery just to
help out the SSA.

3. Consider reducing the publication schedule to every other month, or some
other schedule.

As a passive member, it would be very interesting to see the full budget
laid out in detail so we can see where our money is going. I, nor most
members, don't have a clue on how many employees the SSA has (3, 6, 12,
......????). It sounds like what is needed is a 5-10% budget reduction or
revenue increase. That doesn't sound impossible.

The other observation that I have is the apparent large number of SSA
directors. This is crazy. There should be a board with a manageable number
of people (6-8) who should run the organization. That's not to say that
there might not be volunteer committees to run various activities outside of
this.

Mike Schumann

wrote in message
oups.com...
5-BG:

" I suggest going to an all electronic magazine... THE NEWSLETTER
FORMAT ALREADY EXISTS. There is about 1/2 mil per year here.."

I think that the SSA would lose a lot of members without the magazine
since it is one of the only tangible benefits the SSA offers to a large
proportion of its members. At $64/year, the SSA costs more than the
AOPA or EAA. If you don't own a glider then you can't even get the
insurance coverage "discount". Since most of the SSA members don't
compete in soaring competitions, this aspect of the SSA organization is
of no utility either.

What the SSA cannot afford to do is lose a substantial number of
members. Losing the magazine would be like a failing restaurant
cutting back on its food quality to save money.....

Lindy

5-BG wrote:
A read of the letter to members is interesting.
1. the total amount due on taxes BEFORE interest was 208,000 to feds and
56,000 to state.
2. 84,000 was received as a gift and deposited into ssa operating
accounts. of that only 27,000 was transferred to the foundation. The
difference is therefore 57,000.
3. At this time the board is saying that it appears as if 150,000 was
misappropriated by the cfo and he has been sued and arrested.

Put all this together and the SSA has been living beyond its means for
the past several years to the tune of about 171,000 dollars.
the letter goes on to say that the magazine will continue to be
published and member services maintained.

Outside of the alleged misappropriation of 150,000 the ssa was
evidently running a deficit of somewhere between 43,000 and 57,000 per
year ( depending upon the number of years).

now we have a capital debt plus interest plus interest to feds and
state to pay off in addition to this annual shortfall.

It is obvious that some substantial services need to be cut back or
eliminated.. Even without the misdeeds, it wasn't working.

I suggest going to an all electronic magazine... THE NEWSLETTER FORMAT
ALREADY EXISTS. There is about 1/2 mil per year here..

I have been looking for the minutes of the excom and full board
meetings. recent ones have not been posted . I assume that there is a
reason that this is not being done .

The last posted excom minutes stated that the full board was going to
face the recommendation by the excom to change the bylaws to drop the
necessity of an annual audit. I certainly hope that the full board
rejected this "penny wise and pound foolish" cost savings measure in
light of recent happenings.

there is a big difference between a "review" and an audit.
A review of financials simply accepts information prepared by staff.
An auditor is required to independently check the information against
original records and by other means.

An Audit also normally produces a cash flow statement and includes an
analysis and opinion of the financial viability of an organization. Not
only would an audit have nipped the alleged misappropriation in the bud,
but it would have also required the auditor to give a formal opinion to
the board and members regarding the issue of cash shortfall.

Bottom line from my read, this situation developed over time by the ssa
living beyond its means and robbing peter ( uncle sam) to pay paul.. AND
was complicated by bad conduct.

now is not the time to save 15 grand a year by forgoing future audits.
15 grand a year will NOT solve the problem of repayment and will only set
the stage for the next fiasco.



5bg


wrote in message
oups.com...
From the e-news:

"On 10/11/06, using funds loaned from the SSA Foundation, SSA paid
delinquent federal payroll withholding taxes of approximately $208,000,
and state withholding taxes of approximately $56,000. Our outside
accountants are completing the remaining delinquent federal and state
income tax returns (upon which no taxes will be due) for 2004 and 2005.
Once submitted, SSA will be up to date in all respects with state and
federal tax authorities. It is likely the IRS will require the SSA to
pay interest on the overdue taxes, but we are working to mitigate all
penalties. State tax payments will most likely not incur interest or
penalties.

The SSA was unable to secure a commercial loan on terms it could meet,
to pay its delinquent taxes. Had the SSA Foundation not financially
assisted the SSA with this loan, tax authorities could have seized SSA
funds held by the Foundation in a single investment account. The choice
before the Trustees of the Foundation was to either provide a loan to
the SSA with the expectation of repayment (with 8.25% interest - higher
than that presently generated by the Foundation's investment account
as a whole), or risk seizure of assets to cover what the Society owed.
If seizure was required, the amount taken from the Foundation could
total nearly $600,000, since no mitigation of penalties would likely be
possible in this situation, and the funds would be gone forever.

Addendum: Late-Breaking Information Not Appearing in the Printed Letter
to Members:
On 10/9/06, SSA Ex-CFAO Alan Gleason was served with a civil lawsuit
brought by the SSA. On 10/11/06, at the direction of the New Mexico
District Attorney, he was arrested by the Hobbs Police Department."


Frank Whiteley wrote:
Yes, all in tonight's SSA eNews.

Frank Whiteley
Greeley, Colorado

Pete Reinhart wrote:
All,
Does anybody know if IRS got their money on time?
I seem to remember that October 11th was the deadline.
Cheers!

--
Pete Reinhart
Austin, Texas

------=_NextPart_000_0011_01C6ED73.1E32DE70
Content-Type: text/html; charset=iso-8859-1
Content-Transfer-Encoding: quoted-printable
X-Google-AttachSize: 7522

!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"
HTMLHEAD
META http-equiv=Content-Type content="text/html; charset=iso-8859-1"
META content="MSHTML 6.00.2900.2963" name=GENERATOR
STYLE/STYLE
/HEAD
BODY bgColor=#ffffff
DIVFONT face=ArialA read of the letter to members is interesting.
/FONT/DIV
DIVFONT face=Arial1. the total amount due on taxes BEFORE interest
was
208,000 to feds and 56,000 to state./FONT/DIV
DIVFONT face=Arial2. 84,000 was received as a gift and deposited
into 
ssa operating accounts. of that only 27,000 was transferred to the
foundation.
The difference is therefore 57,000./FONT/DIV
DIVFONT face=Arial3. At this time the board is saying that it appears
as if
150,000  was misappropriated by the cfo and he has been sued and
arrested./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  Put all this together and the SSA has been
living
beyond its means for the past several years to the tune of about 171,000
dollars./FONT/DIV
DIVFONT face=Arial  the letter goes on to say that the magazine
will
continue to be published and member services maintained./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial    Outside of the alleged
misappropriation of 150,000 the ssa was evidently  running a deficit
of
somewhere between 43,000 and 57,000 per year ( depending upon the number
of
years)./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  now we have a capital  debt plus
interest plus
interest to feds and state to pay off in addition to this  annual
shortfall./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  It is obvious that some substantial services
need
to be cut back or eliminated.. Even without the misdeeds, it wasn't
working./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  I suggest going to an all electronic
magazine...
THE NEWSLETTER FORMAT ALREADY EXISTS.  There is about 1/2 mil per
year
here../FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  I have been looking for the minutes of
the 
excom and full board meetings. recent ones  have not been posted . I
assume
that there is a reason that this  is not being done ../FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial The last posted excom minutes stated that the
full
board was going to face the recommendation by the excom to change the
bylaws to
drop the necessity of an annual audit. I certainly hope that the full
board
rejected this "penny wise and pound foolish" cost savings  measure
in light
of recent happenings./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  there is a big difference between a "review"
and an
audit.  /FONT/DIV
DIVFONT face=Arial A review of financials  simply accepts
information prepared by  staff.  An auditor is  required
to
independently check the information against original records and by other
means.
/FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  An Audit also normally produces a cash flow
statement and includes an analysis and opinion of the financial viability
of an
organization. Not only would an audit have nipped the alleged
misappropriation
in the bud, but it would have also required the auditor to give a formal
opinion
to the board and members  regarding the issue of cash
shortfall./FONT/DIV
DIVFONT face=Arial  /FONT/DIV
DIVFONT face=ArialBottom line from my read, this situation developed
over
time by the ssa living beyond its means and robbing peter ( uncle sam) to
pay
paul.. AND was complicated by bad conduct. /FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial now is not the time to save 15 grand
a year by
forgoing future audits. 15 grand a year will NOT solve the problem of
repayment
and will only set the stage for the next fiasco.  /FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial5bg/FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px;
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"
DIV<A
"lonebeagle1@ya hoo.com/A>
wrote in message A

oglegroups.com"news:1160628246.735229.209750@h48g 2000cwc.googlegroups.com/A.../DIV>From
the e-news:BRBR"On 10/11/06, using funds loaned from the SSA
Foundation,
SSA paidBRdelinquent federal payroll withholding taxes of
approximately
$208,000,BRand state withholding taxes of approximately $56,000. Our
outsideBRaccountants are completing the remaining delinquent federal
and
stateBRincome tax returns (upon which no taxes will be due) for 2004
and
2005.BROnce submitted, SSA will be up to date in all respects with
state
andBRfederal tax authorities. It is likely the IRS will require the
SSA
toBRpay interest on the overdue taxes, but we are working to mitigate
allBRpenalties.  State tax payments will most likely not incur
interest
orBRpenalties.BRBRThe SSA was unable to secure a commercial loan
on
terms it could meet,BRto pay its delinquent taxes. Had the SSA
Foundation
not financiallyBRassisted the SSA with this loan, tax authorities
could have
seized SSABRfunds held by the Foundation in a single investment
account. The
choiceBRbefore the Trustees of the Foundation was to either provide a
loan
toBRthe SSA with the expectation of repayment (with 8.25% interest -
higherBRthan that presently generated by the Foundation's investment
accountBRas a whole), or risk seizure of assets to cover what the
Society
owed.BRIf seizure was required, the amount taken from the Foundation
couldBRtotal nearly $600,000, since no mitigation of penalties would
likely
beBRpossible in this situation, and the funds would be gone
forever.BRBRAddendum: Late-Breaking Information Not Appearing in
the
Printed LetterBRto Members:BROn 10/9/06, SSA Ex-CFAO Alan Gleason
was
served with a civil lawsuitBRbrought by the SSA. On 10/11/06, at the
direction of the New MexicoBRDistrict Attorney, he was arrested by
the Hobbs
Police Department."BRBRBRFrank Whiteley wrote:BR> Yes, all
in
tonight's SSA eNews.BR>BR> Frank WhiteleyBR> Greeley,
ColoradoBR>BR> Pete Reinhart wrote:BR> > All,BR>
>
Does anybody know if IRS got their money on time?BR> > I seem
to
remember that October 11th was the deadline.BR> >
Cheers!BR> >
BR> > -- BR> > Pete ReinhartBR> > Austin,
TexasBR/BLOCKQUOTE/BODY/HTML

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I would tend to agree that some big cuts are in order. Obviously the
newsletter is one place to focus. Another has to be head count. People are
expensive. It would be nice if there was some org chart or something, so we
could see how many people there are and what they are doing.

Mike Schumann
"5-BG" 5-bghatesspam @ fake.com wrote in message
...
Mike.. you estimated a budget reduction of 5 to 10% would square things
away..

Here is what I come up with in VERY ROUND NUMBERS:

50,000 operating shortfall over the past few years
25,000 INTEREST to foundation for a loan of ABOUT 300,000 which was
needed to pay off feds etc ( we haven't paid interest yet and have sent in
264,000)
An annual principal payment to the foundation of about 50,000 which
represents a 5 year payback of loan.

These figures total 125,000 which is about 13% of the annual dues of
about 1 million.

To this I would strongly SUSPECT that we will need to provide for
INFLATION over the past 12 months or for the next 12 months.. ..My guess is
a minimum of 3% and perhaps 5% depending upon the mix of our actual
expenditures.. lets say 4%.. 40,000

So by my reckoning, the society budget needs to trim expenditures by
about 165,000 per year from last year and to assume that membership will
stay constant at current dues rate. Or it could raise dues by 10 to 11 bucks
per member and hope membership stays constant.

I believe that we are looking at a 16% problem. I believe that a
problem of that magnitude requires looking at the big expenditures rather
than nibbling away at the small ones.
Also, remember the board "saved 15,000 to 20,000 by forgoing an audit..
I would hope that this expense will be considered appropriate in the
future.. that brings the annual shortfall in the 180,000 range.

for the current year, I would guess that there are some very significant
one off expenses (legal and accounting) associated with the mess. probably
significant and I would GUESS in the 50,000 range. There may have been some
one off separation expenses associated with ED.

It appears as if the board is headed towards borrowing the deficit for
this year . this will increase the annual shortfall in the out years.

Based upon what has been told to membership those are the implications.

Those inferences indicate MAJOR overhaul of resource allocation and/ or
dues increase.

Basically the current board presided over an organization that overspent
( and misappropriated) about 10% of it's annual resources. The EXCOM has
taken the position that they were simply not told of the problem.

I believe that the PROBLEM ORIGINATED with the board. I believe that the
board did not make the hard financial choices and that the cfo probably
decided early on to skip a payment to the feds.. Once that sort of situation
develops, it is not unusual for the books to begin to be cooked to cover up
the problem.. Dipping into the cookie jar as has been alleged, is a
temptation that some cannot resist at that point.

The point I am making is that we have discussed the board's failure to
SUPERVISE. What we have not discussed was the boards failure to live within
a budget.

There are some warning flags currently flying. Namely why haven't they
posted the minutes of recent excom and board meetings? My read of what has
been posted is that several important discussions were omitted from the
minutes and that The excom made some pretty heavy decisions and did not
expose the membership to the debate.
This is NOT transparency. I am not questioning their right to make certain
decisions, but I am questioning their reasoning in being slow to post
minutes and then to edit the minutes so heavily.
in my view, for the ssa to remain viable, the membership needs to be
involved in the resource allocation AND dues increase process. We now have
a small committee charged with restructuring and managing finances. we have
3 volunteers monitoring the excom. It is my hope that very soon someone
will do the arithmetic, that I approximated above, with real numbers, and
then present the hard choices to the membership for discussion and perhaps
even a poll. They should have a handle on the annual dollar problem by now
and there are only so many programs in last years budget. It will be a
painful and contentious process, but one that the members should have a say
in.
Transparency and member interaction with the process is essential.
Anything less smacks of paternalistic governance.

5bg


"Mike Schumann" wrote in message
nk.net...
I think that this is a valid concern. I would suggest a couple of
alternatives:

1. Make the magazine available on-line in pdf format. This should happen
regardless as a resource for our members to look up old articles.

2. Make the print magazine optional. I suspect that there are a
significant number of members who would elect electronic delivery just to
help out the SSA.

3. Consider reducing the publication schedule to every other month, or some
other schedule.

As a passive member, it would be very interesting to see the full budget
laid out in detail so we can see where our money is going. I, nor most
members, don't have a clue on how many employees the SSA has (3, 6, 12,
.......????). It sounds like what is needed is a 5-10% budget reduction or
revenue increase. That doesn't sound impossible.

The other observation that I have is the apparent large number of SSA
directors. This is crazy. There should be a board with a manageable number
of people (6-8) who should run the organization. That's not to say that
there might not be volunteer committees to run various activities outside of
this.

Mike Schumann

wrote in message
oups.com...
5-BG:

" I suggest going to an all electronic magazine... THE NEWSLETTER
FORMAT ALREADY EXISTS. There is about 1/2 mil per year here.."

I think that the SSA would lose a lot of members without the magazine
since it is one of the only tangible benefits the SSA offers to a large
proportion of its members. At $64/year, the SSA costs more than the
AOPA or EAA. If you don't own a glider then you can't even get the
insurance coverage "discount". Since most of the SSA members don't
compete in soaring competitions, this aspect of the SSA organization is
of no utility either.

What the SSA cannot afford to do is lose a substantial number of
members. Losing the magazine would be like a failing restaurant
cutting back on its food quality to save money.....

Lindy

5-BG wrote:
A read of the letter to members is interesting.
1. the total amount due on taxes BEFORE interest was 208,000 to feds and
56,000 to state.
2. 84,000 was received as a gift and deposited into ssa operating
accounts. of that only 27,000 was transferred to the foundation. The
difference is therefore 57,000.
3. At this time the board is saying that it appears as if 150,000 was
misappropriated by the cfo and he has been sued and arrested.

Put all this together and the SSA has been living beyond its means for
the past several years to the tune of about 171,000 dollars.
the letter goes on to say that the magazine will continue to be
published and member services maintained.

Outside of the alleged misappropriation of 150,000 the ssa was
evidently running a deficit of somewhere between 43,000 and 57,000 per
year ( depending upon the number of years).

now we have a capital debt plus interest plus interest to feds and
state to pay off in addition to this annual shortfall.

It is obvious that some substantial services need to be cut back or
eliminated.. Even without the misdeeds, it wasn't working.

I suggest going to an all electronic magazine... THE NEWSLETTER FORMAT
ALREADY EXISTS. There is about 1/2 mil per year here..

I have been looking for the minutes of the excom and full board
meetings. recent ones have not been posted . I assume that there is a
reason that this is not being done .

The last posted excom minutes stated that the full board was going to
face the recommendation by the excom to change the bylaws to drop the
necessity of an annual audit. I certainly hope that the full board
rejected this "penny wise and pound foolish" cost savings measure in
light of recent happenings.

there is a big difference between a "review" and an audit.
A review of financials simply accepts information prepared by staff.
An auditor is required to independently check the information against
original records and by other means.

An Audit also normally produces a cash flow statement and includes an
analysis and opinion of the financial viability of an organization. Not
only would an audit have nipped the alleged misappropriation in the bud,
but it would have also required the auditor to give a formal opinion to
the board and members regarding the issue of cash shortfall.

Bottom line from my read, this situation developed over time by the ssa
living beyond its means and robbing peter ( uncle sam) to pay paul.. AND
was complicated by bad conduct.

now is not the time to save 15 grand a year by forgoing future audits.
15 grand a year will NOT solve the problem of repayment and will only set
the stage for the next fiasco.



5bg


wrote in message
oups.com...
From the e-news:

"On 10/11/06, using funds loaned from the SSA Foundation, SSA paid
delinquent federal payroll withholding taxes of approximately $208,000,
and state withholding taxes of approximately $56,000. Our outside
accountants are completing the remaining delinquent federal and state
income tax returns (upon which no taxes will be due) for 2004 and 2005.
Once submitted, SSA will be up to date in all respects with state and
federal tax authorities. It is likely the IRS will require the SSA to
pay interest on the overdue taxes, but we are working to mitigate all
penalties. State tax payments will most likely not incur interest or
penalties.

The SSA was unable to secure a commercial loan on terms it could meet,
to pay its delinquent taxes. Had the SSA Foundation not financially
assisted the SSA with this loan, tax authorities could have seized SSA
funds held by the Foundation in a single investment account. The choice
before the Trustees of the Foundation was to either provide a loan to
the SSA with the expectation of repayment (with 8.25% interest - higher
than that presently generated by the Foundation's investment account
as a whole), or risk seizure of assets to cover what the Society owed.
If seizure was required, the amount taken from the Foundation could
total nearly $600,000, since no mitigation of penalties would likely be
possible in this situation, and the funds would be gone forever.

Addendum: Late-Breaking Information Not Appearing in the Printed Letter
to Members:
On 10/9/06, SSA Ex-CFAO Alan Gleason was served with a civil lawsuit
brought by the SSA. On 10/11/06, at the direction of the New Mexico
District Attorney, he was arrested by the Hobbs Police Department."


Frank Whiteley wrote:
Yes, all in tonight's SSA eNews.

Frank Whiteley
Greeley, Colorado

Pete Reinhart wrote:
All,
Does anybody know if IRS got their money on time?
I seem to remember that October 11th was the deadline.
Cheers!

--
Pete Reinhart
Austin, Texas

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Content-Transfer-Encoding: quoted-printable
X-Google-AttachSize: 7522

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META http-equiv=Content-Type content="text/html; charset=iso-8859-1"
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BODY bgColor=#ffffff
DIVFONT face=ArialA read of the letter to members is interesting.
/FONT/DIV
DIVFONT face=Arial1. the total amount due on taxes BEFORE interest
was
208,000 to feds and 56,000 to state./FONT/DIV
DIVFONT face=Arial2. 84,000 was received as a gift and deposited
into 
ssa operating accounts. of that only 27,000 was transferred to the
foundation.
The difference is therefore 57,000./FONT/DIV
DIVFONT face=Arial3. At this time the board is saying that it appears
as if
150,000  was misappropriated by the cfo and he has been sued and
arrested./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  Put all this together and the SSA has been
living
beyond its means for the past several years to the tune of about 171,000
dollars./FONT/DIV
DIVFONT face=Arial  the letter goes on to say that the magazine
will
continue to be published and member services maintained./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial    Outside of the alleged
misappropriation of 150,000 the ssa was evidently  running a deficit
of
somewhere between 43,000 and 57,000 per year ( depending upon the number
of
years)./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  now we have a capital  debt plus
interest plus
interest to feds and state to pay off in addition to this  annual
shortfall./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  It is obvious that some substantial services
need
to be cut back or eliminated.. Even without the misdeeds, it wasn't
working./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  I suggest going to an all electronic
magazine...
THE NEWSLETTER FORMAT ALREADY EXISTS.  There is about 1/2 mil per
year
here../FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  I have been looking for the minutes of
the 
excom and full board meetings. recent ones  have not been posted . I
assume
that there is a reason that this  is not being done ./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial The last posted excom minutes stated that the
full
board was going to face the recommendation by the excom to change the
bylaws to
drop the necessity of an annual audit. I certainly hope that the full
board
rejected this "penny wise and pound foolish" cost savings  measure
in light
of recent happenings./FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  there is a big difference between a "review"
and an
audit.  /FONT/DIV
DIVFONT face=Arial A review of financials  simply accepts
information prepared by  staff.  An auditor is  required
to
independently check the information against original records and by other
means.
/FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial  An Audit also normally produces a cash flow
statement and includes an analysis and opinion of the financial viability
of an
organization. Not only would an audit have nipped the alleged
misappropriation
in the bud, but it would have also required the auditor to give a formal
opinion
to the board and members  regarding the issue of cash
shortfall./FONT/DIV
DIVFONT face=Arial  /FONT/DIV
DIVFONT face=ArialBottom line from my read, this situation developed
over
time by the ssa living beyond its means and robbing peter ( uncle sam) to
pay
paul.. AND was complicated by bad conduct. /FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial now is not the time to save 15 grand
a year by
forgoing future audits. 15 grand a year will NOT solve the problem of
repayment
and will only set the stage for the next fiasco.  /FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial5bg/FONT/DIV
DIVFONT face=Arial/FONT /DIV
DIVFONT face=Arial/FONT /DIV
BLOCKQUOTE
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DIV<A
"lonebeagle1@ya hoo.com/A>
wrote in message A

oglegroups.com"news:1160628246.735229.209750@h48g 2000cwc.googlegroups.com/A.../DIV>From
the e-news:BRBR"On 10/11/06, using funds loaned from the SSA
Foundation,
SSA paidBRdelinquent federal payroll withholding taxes of
approximately
$208,000,BRand state withholding taxes of approximately $56,000. Our
outsideBRaccountants are completing the remaining delinquent federal
and
stateBRincome tax returns (upon which no taxes will be due) for 2004
and
2005.BROnce submitted, SSA will be up to date in all respects with
state
andBRfederal tax authorities. It is likely the IRS will require the
SSA
toBRpay interest on the overdue taxes, but we are working to mitigate
allBRpenalties.  State tax payments will most likely not incur
interest
orBRpenalties.BRBRThe SSA was unable to secure a commercial loan
on
terms it could meet,BRto pay its delinquent taxes. Had the SSA
Foundation
not financiallyBRassisted the SSA with this loan, tax authorities
could have
seized SSABRfunds held by the Foundation in a single investment
account. The
choiceBRbefore the Trustees of the Foundation was to either provide a
loan
toBRthe SSA with the expectation of repayment (with 8.25% interest -
higherBRthan that presently generated by the Foundation's investment
accountBRas a whole), or risk seizure of assets to cover what the
Society
owed.BRIf seizure was required, the amount taken from the Foundation
couldBRtotal nearly $600,000, since no mitigation of penalties would
likely
beBRpossible in this situation, and the funds would be gone
forever.BRBRAddendum: Late-Breaking Information Not Appearing in
the
Printed LetterBRto Members:BROn 10/9/06, SSA Ex-CFAO Alan Gleason
was
served with a civil lawsuitBRbrought by the SSA. On 10/11/06, at the
direction of the New MexicoBRDistrict Attorney, he was arrested by
the Hobbs
Police Department."BRBRBRFrank Whiteley wrote:BR> Yes, all
in
tonight's SSA eNews.BR>BR> Frank WhiteleyBR> Greeley,
ColoradoBR>BR> Pete Reinhart wrote:BR> > All,BR>
>
Does anybody know if IRS got their money on time?BR> > I seem
to
remember that October 11th was the deadline.BR> >
Cheers!BR> >
BR> > -- BR> > Pete ReinhartBR> > Austin,
TexasBR/BLOCKQUOTE/BODY/HTML

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