Some details in the appeals filed by 3 charities

April 30, 2018, 12:44 pm

Image courtesy of Adobe Stock

As mentioned previously, appeals have been filed by the three charities receiving cease & desist orders from the California A.G.

This discussion will highlight some comments in the appeals. Will have a few observation from an auditor perspective along the way. Might want to get a fresh cup of coffee before you dig in. This will be a long post.

Previous posts:

 

Catholic Medical Mission Board appeal

At seven pages, this appeal is a bit shorter than the others. The page count includes the proof of service and a cover sheet which is the page the AG provided to request an appeal.

In the appeal, CMMB denies all the factual allegations and conclusions of law (para 4). Specific assertions are listed for emphasis:

  • The AG is not properly interpreting GAAP.
  • Geographic restrictions on medicine do not make the US a prohibited market for valuation purposes.
  • Representations to California citizens are neither unfair nor deceptive.

In the appeal, CMMB requests:

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Posted by Jim Ulvog

Three charities file appeal of California AG Cease and Desist order

April 13, 2018, 4:07 pm

Image courtesy of Adobe Stock

With a deadline of April 11 to appeal cease and desist orders from the California Attorney General, MAP International, Food for the Poor, and Catholic Medical Mission Board each filed their appeal on the 10th or 11th.

You may find a PDF copy of the appeals and cease and desist orders at the AG’s website.

The individual appeals may be found at:

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Posted by Jim Ulvog

Financial info for the 4 charities the California AG accuses of overvaluing donated medicine

March 14, 2018, 11:00 am

Image courtesy of Adobe Stock.

For future reference, here is some select financial information on the charities that have been accused of overvaluing donated medicine.

In March 2018, the Attorney General of California filed cease and desist orders against three charities and a complaint against one.

The complaint was resolved with a stipulated judgment the same day the complaint was filed. Resolution? The National Cancer Coalition agreed to dissolve.

Listed in this post is some data from the most recent set of financial statements available at the charities’ web sites along with the 2015 info, which is the latest year cited in the cease-and-desist orders.

Since the cease-and-desist orders allege material misrepresentation in the audited financial statements, the auditor is also listed. Therefore this is an audit issue as well as an accounting issue.

I will make an educated guess that the 2017 financial statements for MAP and FffP will not be available until after the impact of the AG’s cease and desist action is assessed. Looking in from the outside, it seems to me like this issue would constitute a material subsequent event.

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Posted by Jim Ulvog

California A.G. files complaint against a charity for overvaluation of donated medicine. That charity agrees to dissolve itself. Three other charities issued cease-and-desist order.

March 14, 2018, 8:51 am

(update: headline modified)

The conflict over donated pharmaceuticals has heated up again.

The California Attorney General has filed cease and desist orders against three large charities who received between 89% and 98% of their revenue from medical GIK.

Update:  Those percentages appear to include all GIK, not just medicines. For example, in 2015 Food for the Poor had $1,159M total income with $1,033M of donated goods, according to their audited financial statements. According to their 990 for 2015, of the total GIK $818.7M was drugs and medical supplies, $110.8M was clothing and household goods, with $103M of other GIK. For 2015 donated drugs and medical supplies are 70.6% of total support and revenue.

Update: For MAP in 2015, total drugs and medical supplies from Schedule M of the 990 ties to the donated inventory on the audited financial statements. The only other GIK listed on Schedule M are securities, which amount ties to the financial statements. For 2015, donated drugs and medical supplies are 97.8% of total revenue and support.  Likewise for CMMB, the drugs and medical supplies listed on Schedule M ties to the line donated pharmaceuticals, equipment and supplies on the audited financial statements. For 2015, donated drugs and medical supplies are 90% of total support and revenue.

A complaint was filed against another charity, National Cancer Coalition, for overvaluation of GIK. The charity conceded the state’s claims and agreed to terminate the charity’s existence.

The three large charities are Food for the Poor, MAP International, and Catholic Medical Mission Board.

The cease and desist orders can be found at the AG’s web site:

Actions regarding the charity closing its doors:

This post will describe the complaint against NCC and the stipulated judgment.

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Posted by Jim Ulvog

Podcast on turmoil involving Wounded Warrior Project

October 1, 2016, 11:44 am
Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

If you’ve been following the media turmoil surrounding Wounded Warrior Project, you will want to check out a podcast from The Contributing Factor (that is Bill O’Reilly’s website):  Podcast: Ousted Wounded Warrior Project Executives Speak Out.

There are interviews with the two departed senior executives.

That page also has written responses from the board denying the specifics in the Doug White report.

The board asserts that giving dropped as soon as the media reports surfaced. Mr. Nardizzi asserts that he was watching the giving until the day he was released and noticed the giving was only 1.7% below the projected income.

Check out the podcast. I’ll try to have more comments later.

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Posted by Jim Ulvog

A completely different perspective on the crisis surrounding Wounded Warrior Project.

September 26, 2016, 9:53 am
Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

Here are a few articles which will give you a different way of looking at the recent publicity surrounding Wounded Warrior Project. I’ve been swamped by several major projects so haven’t had much time to write recently. Those projects are still not done so I won’t be able to spend as much time on this post as I would like, yet I want to get some comments online for those who have been following the story.

The biggest article is The First Casualty: A report addressing the allegations made against the Wounded Warrior Project in January 2016 by Doug White, published September 6, 2016.

There is a lot of information about the entire story which has received minuscule coverage. Here is my quick recap of his major points:

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Posted by Jim Ulvog

Restructuring underway at Wounded Warrior Project

August 31, 2016, 9:14 am
Image courtesy of Adobe Stock.

Image courtesy of Adobe Stock.

Some of the recent news regarding WWP. Much more to say, not enough time today.

Wounded Warrior Project released their financial statements for fiscal year ending September 30, 2015. One sentence summary is they have continued the accounting practices in place for 2014, which have drawn lots of criticism. At first glance, looks to me like functional allocation of expense methodology is unchanged from 2014. Much more discussion is needed on the issue.

Tim Sandoval describes the issue on 8/17 at Chronicle of Philanthropy (behind paywall):  Wounded Warrior Sticks With Accounting Rules That Drew Fire.

Layoffs and restructuring have begun:

8/30 – News 4 Jax – I-Team: Executives laid off, reassigned at Wounded Warrior Project – Article says several executive vice presidents have been let go or reassigned. More changes at the EVP level are expected.

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Posted by Jim Ulvog

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