Another charity restates 2012 GIK income upwards to AWP

When it rains, it pours.

That’s not just an advertising tag line from a salt seller. It’s also a saying in my family, meaning when a few things happen, there often is a string of things that follow.

That’s what it feels like in the GIK area now.  After months of not much happening, I’ve written five posts in two weeks on GIK issues.

Today’s news (at least it’s news to me) is another charity’s revision of the values used for GIK in 2012. It looks like the amounts are increased from wholesale acquisition cost to average wholesale price.

The 990 and audited financial statements for Children’s Cancer Fund of America filed with the New York Attorney General can be found at the AG’s website here. Click on the link next to the first 12/31/2012 date for the initial filing and the link next to the second 12/31/12 date for the amended filing.

The amended 990 is available at GuideStar. Sorry, can’t give a direct link to the page – a free registration is required.

I can’t find the financial statements on the charity’s website. Did I miss them?

I will again provide in this post just the numbers and basic description from the filings. Hopefully I’ll be able to discuss the context of the revision in a later post.

Upward restatement

Here are some select amounts from the reports. Drug GIK is the amount of drugs and medical supplies I pulled from line 20 of Schedule M of the 990. The dates listed are when the organization signed the 990 and the date on the accountants’ report.

  • Drug GIK   total revenue    year                      990/opinion date
  • $8.1M          $14.8M           2011                     5/7/12  /  2/10/12
  • $1.8M          $  8.3M           2012 first report   7/31/13 / 7/8/13
  • $8.9M          $15.4M           2012 revised         9/26/13 /  9/16/13

Valuation methodology – 2011

Disclosure is very brief in the 2011 financial statements of how the GIK is valued. Note 1 says:

Contributions of materials and equipment are recorded at their estimated market value on the date of receipt.

On 990 Schedule M (5/7/12), the line to describe valuation method is blank.

Initial 2012 methodology

The GIK as first reported is valued in the audit report (7/8/13 opinion date)  based on

… estimated fair market value (generally wholesale or less)

and in the 990 (7/31/13) on schedule M as:


Revised 2012 methodology

The amended 990 (9/26/13) on Schedule M discloses the valuation of medicines as:


Schedule O on the 990 (9/26/13) contain the following comment, which I will transcribe in sentence cap format instead of all upper case as used on the return:

Amended return explanation

Return is being amended to reflect a change in the valuation of gifts in kind from WAC to AWP.  This change was made by management and the board subsequent to the completion of the original 990.  The change was made to more accurateley (sic) reflect these values in accordance with generally accepted accounting principles and to be consistent with methods used in prior years.

The financials with opinion date of 9/16/13 contain the following comment in Note 8:

After revaluing the donations using Average Wholesale Price as used in prior years, donated Supplies and Commodities as restated are …

What say you?

I’ll repeat my comments from yesterday – I’m again interested in your thoughts. Did I misunderstand something? Leave out some pertinent details?

Any comments from readers?

As before, I’ll publish all comments that maintain a minimal amount of professionalism. Any falling below the threshold that I unilaterally define will either be edited or deleted. I’ve not had trouble with trolls on my blogs, but just want to make it clear this is my blog. If you wish to rant, feel free to do so, but on your own site.

Update: Here is the post from yesterday discussing another charity that restated from WAC to AWP.

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