Month: September 2012

Check out this set of financial statements to see a live example of the pharmaceutical GIK issues – part 5

This series of posts looks at the issues surrounding valuation of GIK medication in the nonprofit community that have been getting attention lately by seeing how those issues present themselves in one set of financial statements. 

See the first post in this series for tips on downloading a copy of the full 990 and audited financial statements.

I just checked their website today and found it is up and operating. You can find their last 3 audited financial statements here and the last three 990s here.

The 2011 financial statements have the cover letter from Dr. Harder indicating the ministry will use cost for 2012.

Kudos to the organization for making the reports for the last three years easily available on their website. 

As I’ve mentioned before, the goal is to see a live set of financials that lets us see the issues, not to pick on any particular NPO.

Supplemental schedule

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Jim Ulvog

Here’s a graph to show why it feels like this is a lousy recovery

If it feels like the recovery that started over 3 years ago isn’t really going anywhere, there’s a reason you might be thinking that.

This is a graph of the percentage of the population that is employed. The exact description is civilian employment as a percent of the population. That means what proportion of the population is employed.

Check it out:

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Jim Ulvog

If you know the names of donors, you can’t list them as anonymous on the 990

Sometimes a large donor will want to avoid being listed on the schedule B attachment to Form 990.  Even though schedule B is not disclosable to the public, some donors worry there is a risk of becoming known. Can you accommodate that request from donors?

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Jim Ulvog

Check out this set of financial statements to see a live example of the pharmaceutical GIK issues – part 4

This series of posts looks at the issues surrounding valuation of GIK medication in the nonprofit community that have been getting attention lately.  We are looking at how those issues can be seen in one specific set of financial statements. 

See the first post in this series for ideas on downloading a copy of the full 990 and audited financial statements.

This post continues a discussion of note 3 regarding valuation of purchased meds. See previous post for text of the note.

Note 3 – continued discussion

As mentioned earlier, Note 1 says the “bulk” of medicines were purchased from two  overseas suppliers.

Note 3 indicates the

..majority of the value of the Ministry’s pharmaceutical products are not legally permissible to be sold in the United States..

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Jim Ulvog

Standard Chartered Bank admits laundering $250B, will pay $340M fine. By the way, looks like a repeat violation.

Standard Chartered signed a consent decree with the New York Department of Financial Services on September 21.  The signed agreement, which you can read here, acknowledges about $250 billion of wires in approximately 59,000 transactions were “repaired” with the intent of hiding whose money was involved. By way, there is a previous enforcement action that didn’t detect any problem, which tells me this is a repeat violation.

Current settlement

The Wall Street Journal report StanChart Formalizes Settlement in Iran Case describes the settlement. The line that caught my interest is:

Standard Chartered, which contested the allegations when they were filed last month, acknowledged misconduct tied to 59,000 transactions totaling about $250 billion.

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Jim Ulvog

Check out this set of financial statements to see a live example of the pharmaceutical GIK issues – part 3

This series of posts looks at the issues surrounding valuation of GIK medication in the nonprofit community that have been getting attention lately.  The 2011 financial statements for Blessings International illustrate these issues.  This series of posts show how those issues appear in one set of financial statements. 

See the first post in this series for ideas how to download a copy of the full 990 and audited financial statements.

Notes to the financial statements – continued observations

The final item I will quote at length is note 3, which describes the valuation of donated meds.

Kudos again to Blessings International for spelling this out clearly.  My guess is that we would see similar issues, explanations, and general relationships in many other financial statements if all organizations were as clear as Blessings International.

By the way, this is a great description of current valuation methodologies in use today. Considering the topic, it is also reasonably concise. (more…)

Jim Ulvog

We need a new way to evaluate charities – Part 2

Previous post discussed explained that is a major point by Mr. Dan Pallotta in two articles he wrote:

His main point is the excessive focus we as a society have evaluating organizations based on their “overhead” ratios and our intolerance for NPOs paying market salaries.  The unintended consequence is that we are restricting organizations from getting the money to have the full impact they could realize.

Action plan

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Jim Ulvog

Check out this set of financial statements to see a live example of the pharmaceutical GIK issues – part 2

This series of posts looks at the issues surrounding valuation of GIK medication in the nonprofit community that have been getting attention lately.  The 2011 financial statements for Blessings International illustrate these issues.  This series show how those issues appear in one set of financial statements. 

See the first post in this series for suggestions on how to download a copy of the full 990 and audited financial statements.

Statement of activity

The statement of activity is presented on the “pancake” method, which means that all of the unrestricted activity is listed first followed by the temporarily restricted items. To find out the amount of total revenue requires doing some math. Total revenue for 2011 is $61.25M (calculated as $3.36 plus $57.82 plus $0.07). Total revenue for 2010 is $39.0.

Donated meds are $57.8 in 2011, which is 94.4% of total revenue.

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Jim Ulvog

We need a new way to evaluate charities – Part 1

That is a major issue for Mr. Dan Pallotta. He suggests the excessive focus we as a society have on rating the effectiveness of NPOs by “overhead” ratios and our intolerance for NPOs paying market salaries are restricting organizations from getting the money to have the full impact they could have.

I read two articles by Mr. Pallotta on the same day. Please check them out.

Why Can’t We Sell Charity Like We Sell Perfume, from the Wall Street Journal.

Charities Must Battle Public Misconceptions About Overhead Costs, from the Chronicle of Philanthropy.

In the WSJ article he says:

We have two separate rule books: one for charity and one for the rest of the economic world. The result is discrimination against charities in five critical areas.

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Jim Ulvog

Check out this set of financial statements to see a live example of the pharmaceutical GIK issues – part 1

If you want to see an illustration of the issues surrounding valuation of GIK meds, check out the 2011 financial statements for Blessings International.  Many of the issues in discussion around the NPO community are visible in these financials.

This series of posts will be in 6 parts which will be posted over the next two weeks or so.

Their website went down a few weeks ago, so you can’t get the 990 or financial statements from their site. It is in operation again but only with a few pages working. You can find their website here.

You can find their 990 and audited financial statement for 2011 at the North Carolina Secretary of State’s web site. The specific page is here.

In case that link doesn’t work, you can go to the NC Secretary’s web site and use their search page, which is here.

Cover letter

Some time ago when the Blessings International website was up, I read a cover letter from the NPO’s president which was attached to the audited financial statements.  The report at the NC SoS site does not have that cover letter.  I will quote from the copy of the report I downloaded at the time. 

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Jim Ulvog

How to find financial reports for nonprofit organizations

Here are a few ideas in case you would like to find some financial info on a charity.

For donors, it is easy to find financial reports for charities you would like to support. For ministries, please understand how incredibly easy it is for your donors to find your financial data. 

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Jim Ulvog

How many stern warnings does a bank get before it winds up in real trouble?

Barclays settled with US regulators over its role in the fiasco about manipulating Libor. I’ve mentioned that mess in my other blog. As a part of that settlement, they signed a deferred prosecution agreement.

They were already on probation for an earlier deferred prosecution agreement for money laundering.

A Wall Street Journal article, Corporate Probation: Punishing or Punting? by Michael Rothfeld, gives the details (article behind paywall).

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Jim Ulvog

Wages of fraud – loss of licenses

The sad tragedy of fraud in a neighboring city is in the next to last chapter. Yesterday one of the admitted middleman in the Upland bribery scandal was sentenced to a year and a day in federal prison.

The Inland Valley Daily Bulletin discusses the case and sentencing in their article Co-defendant in Pomierski case is sentenced to one year.

Previously I described the wages earned from a felony conviction.

Add to the high cost the probable loss of any professional credentials or state licensing necessary to do your job.

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Jim Ulvog

Another graph illustrating why it feels like the recession hasn’t ended

The recession officially ended in June 2009, which means we’ve seen just over 3 years of recovery. GDP has finally passed the peak from before the recession. Yet it doesn’t quite feel like recovery, at least here in California. Saw another graph that shows why it feels so odd.

In a graph called The Zero Recovery, Tim Kane calculates the number of people who are employed as a percentage of the population. For the last six recessions he tracks the change in the employment to population ratio from the start of the recession. For the previous five recessions the drop wasn’t as severe as this one and there had been substantial recovery by the 4½ year point after the start of the recession.

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Jim Ulvog