Robert Anglen has a report in the Arizona Republic on a Mesa charity tied to inquiry. He had an interview with the CEO of the Breast Cancer Society.
The CEO says that what appeared to be an effort to vote CNN the number 1 network was a failed attempt to wave goodbye to the reporters while simultaneously holding a cell phone.
Far more serious is the discussion of variance power.
There is one shipment of Gardasil medicine to Ghana that keeps surfacing in news reports. The shipment was initially reported as revenue by World Help but upon restatement, I think that was removed from their financial statements.
That shipment pops up in Mr. Anglen’s article:
In 2011, the Breast Cancer Society said it delivered $4,144,704 worth of Gardasil vaccine to an organization in Ghana for treatment of human papillomavirus, or HPV, a sexually transmitted disease.
At least three other charities took credit for supplying the same Gardasil shipment, valued at the same amount to the same organization in Ghana. Officials with Axios Healthcare Development in Paris, the administrator of Gardasil Access Program, said the Breast Cancer Society has nothing to do with the vaccine program.
[The organization’s CEO] said Friday that his charity was involved in the shipment of the vaccine.
Mr. Anglen is asserting that four charities have recorded that one shipment as revenue. Not sure if that count includes World Help or not.
If I’m reading between the lines correctly, I think this article at Chronicle of Philanthropy about 1/3 of the way into the article identifies the names of two charities that received that shipment. That implies there are one or two more. I saw this shipment mentioned at the Tampa
Bay Times report as having been recorded by one of the charities, but can’t find that mention again after a cursory search.
The accounting question here is variance power. If World Help is not known to the donor and recipient, it seems unlikely they have any variance power to give and thus no other downstream organizations could get variance power from them. That makes it difficult to understand how they could record the income.
The Breast Cancer Society has a Response to Tampa Bay Times and AC360 posted on their website.
‘Inside baseball’ hint to auditors of the organizations booking that shipment as contribution revenue: There is sufficient information in print for you to consider that as information obtained after release of report. If you assess the reports in newspapers I mentioned as credible, you may also have indication there may be some other contributions to reconsider for past audits.
Hint to all auditors: If you consider as credible any of the reports in various media sources, you might want to revisit several of your risk assessments on your next audit.
What do you think?
Am I missing something? Misapplying the accounting rules? Putting together too many assumptions and inferences?