In March, 2012, Mr. Donald Meyer, the Facilities Manager for The Carr P Collins Social Services Center, owned and operated by The Salvation Army, mishandled money on two separate occasions. The incidents related to the sale of scrap metal. At the time I was the Finance Manager for the facility.
The Carr P Collins policy and procedure for selling scrap metal is
simple. It must be sold to an approved dealer who issues a weight
ticket showing a calculation of the amount paid for the scrap metal.
The representative selling scrap metal must immediately turn any cash
received over to the Finance Department along with a weight ticket.
This procedure ensures timely accounting for the cash receipt and
creates the proper audit trail which adheres to Generally Accepted
Accounting Principles.
One of the employees who observed what we now know was Meyer's second incident with respect to the sale of scrap metal.was a finance department employee who knew the procedure for selling scrap metal and handling the cash received for it. She was the employee to who should have received the money and supporting documents from Meyer and she had not received the money or support for it. She reported to me that she had observed and the fact that she had not received money for the sale of scrap.
I reported the incident to Meyer's supervisor, Jeffrey Upperman, Associate Director for the Carr P Collins Facility. Upperman stated that he was not aware of the sale, but he would remind Mr. Meyer to turn in the money and weight ticket.
Later that day Upperman informed my staff that Meyer sold the scrap metal for $150.00 and would be turning over the money and weight ticket. Approximately thirty minutes later, Meyer turned over $127.00 in cash, stating it was for the sale of scrap metal. No weight ticket was offered. I instructed one of my staff to call the approved scrap metal dealer and request copies of the weight ticket.
She was told by the approved dealer that no one from The Salvation Army sold scrap metal to them on the date in question. The procedure for selling scrap metal was not followed. We had to ask Meyer for the money he received and he turned in an amount that was $23 less than he told his supervisor he received.
Meyer was reminded by a finance staff member that the finance department needed support for the cash receipt. Meyer said he did not have support documentation, but he did offer the name of the scrap metal dealer who allegedly purchased the scrap metal. The finance department attempted to contact the scrap dealer by phone, but did not get an answer. The purpose of the attempted contact was to ask the dealer to fax a copy of the receipt and weight ticket to The Salvation Army.
On the morning of March 30th Mr. Meyer turned in a support document dated March 30th for the $127.00 he turned in on March 28th. The document did have a company name, but no information with respect to weight and price per pound for the $127.00 payment. The document did not meet accounting standards.
Later that day finance was informed me of another issue. Meyer and one of his staff was observed loading scrap metal in the warehouse about one week prior to the March 28h incident. Meyer had not turned in money and support for scrap metal he was observed loading a week earlier than the March 28th incident.
I reported the earlier incident to his supervisor, Jeffrey Upperman. Again, Upperman stated that he knew nothing about it, but would talk to Meyer.
I also informed The Human Resources Manager, Kacye Harvey who told me she would look at surveillance camera tapes from the warehouse to see if scrap metal was loaded by Meyer a week earlier. I told her I would follow up with the scrap dealer and try to verify the authenticity of the receipt. She agreed it was appropriate for me to do it
The next day I went to the scrap metal dealer and request back up documentation for the receipt provided by Meyer. The dealer informed me that he had not purchased any scrap metal from Meyer, or anyone else from The Salvation Army.
I returned to the office and informed the Human Resources Manager what I had learned. By then she had visited with The Director of Operations, Blake Fetterman about the issue. Harvey asked me why I followed up with the scrap dealer. I reminded her that she agreed it was an accounting issue. She said there was no hurry and that Fetterman wanted it handled discreetly.
I disagreed with respect to the urgency of the matter, from an accounting standpoint and assured Harvey that I was handling the matter discreetly. Any disciplinary action that may resulted from Meyer not following Salvation Army procedures was a Human Resources matter, but the documentation issue was a finance department matter.
Later that day Upperman and Fetterman came to my office to confront me. Both were upset that I was investigating the issue. Upperman said there was no issue with anything related to accounting principles. He also said I was not an auditor and should not have investigated the issue related to Meyer.
Upperman's assertions were laughable. Both demonstrated his lack of knowledge with respect to accounting principles and internal controls. One of my duties as Finance Manager was to insure internal controls were maintained and Generally Accepted Accounting Principles were followed. I had performed audits in the past and was commended by Salvation Army leadership for my work. This time, instead of supporting me, Upperman called me an “out of control cowboy”. I took exception to that characterization and told him so.
Fetterman then tried a different spin. She said my actions placed The Salvation Army at risk for legal action; an opinion she alleged came from the Human Resources Manager, Kacye Harvey. To this day Harvey has never conveyed that opinion to me. Why? Harvey knows my actions were within legal boundaries. She knew then and knows today that I did my job.
I told Fetterman and Upperman that it was my opinion I was doing my job; something I have since verified with the internal audit staff at The Texas Divisional Headquarters of The Salvation Army and The Financial Secretary, Durai Pandithurai. I was doing my job, no question about it.
Fetterman then said, “I don’t believe Donald Meyer would steal money. He is a minister and has his own church.” I confess that I was surprised to hear the Meyer was a minister, given the language I heard him use in the past. However, that was irrelevant with respect to the issue at hand.
Fetterman's us of the word "steal" was the first time anyone used that word with respect to the incident. I was trying to secure the proper documentation for an accounting transaction and had accused no one of theft. I was concerned about the fact that Meyer had not been forthcoming about a possible earlier incident when he was asked about the March 28th sale, but made no accusation with respect to theft.
At that time I did mention my concerns that Meyer had not been forthcoming with respect to a possible earlier sale of scrap metal. Being asked about a sale on March 28th should have jogged his memory about a sale he made a week earlier. I asked Fetterman and Upperman if they wondered why Meyer had not volunteered information about an earlier sale at the time he was asked about a sale he made on March 28th. There was no answer to that question.
Finally, Fetterman offered her real concern. She did not want any information relating to Meyer leaving The Carr P Collins facility. She did not want her bosses at The Dallas/Fort Worth Area Command for The Salvation Army to know about the issue. It was her position that we were working to recover The Salvation Army's money and the issue was a "closed matter".
It is important to note here that at least seven other employees had first-hand knowledge of the incident and the issue was being talked about throughout the facility at the time Upperman and Fetterman paid their "closed mater" visit to my office. Ignoring it, from a finance department perspective, was not an option.
I documented my findings and turned them over to Human Resources. Fetterman, Upperman and Harvey swept the issue under the carpet, never once considering it was not the ethical thing to do and never once considering that loyal employees throughout the facility knew about the incident. Director Blake Fetterman only wanted to make sure her superiors did not find out about the incident. She covered up the incident to avoid embarrassment.
A day or two after Fetterman and Upperman confronted me, Upperman gave the finance department $160.00 cash, stating it was for the first sale of scrap by Meyer. Upperman turned the money over to the finance department with a note stating documentation related to the sale of the scrap metal could be found in Human Resources. Donald Meyer still works at the facility. Case closed? No, incident covered up.
The handling of the incident by Fetterman, Upperman and Harvey was an embarrassment and a testament to the fact that they are not ethical. Numerous employees know the three of them swept the incident under the carpet. Those same employees know that a counselor was terminated for taking $5.00 from a client. Meyer was a manager at Carr P Collins; he got a pass for mishandling much more money.
Until now, I have not discussed the details of the incident with anyone other than those mentioned in this piece. However, I was asked about it by numerous employees who knew a cover up had taken place. I performed the duties of my job ethically.
Fetterman, Upperman and Harvey are very intelligent people. There is no question that they know they did not handle the issue with Donald Meyer by any standards approaching ethical behavior. Fettermand an Upperman wanted to avoid the embarrassment of having Salvation Army leadership find out that one of its managers got away with breaking rules for which others are terminated.
I believe Harvey was apparently talked into turning her head for future considerations. Within months of the incident she was promoted to Human Resources Manager at The Dallas/Fort Worth Metroplex Command (Area Command). She was recommended for the job by Blake Fetterman. With Kacye Harvey's promotion, knowledge of the Donald Meyer incident made it to The Area Command of The Salvation Army where the cover up was still a secret until I wrote this piece.
What about the five core values of The Salvation Army?
Trustworthy. How trustworthy is someone who hides the truth and shirks responsibilities? Fetterman, Upperman and Harvey all swept the incidents under the carpet and chastised me for doing my job.
Uplifting. Is covering up the truth uplifting to the loyal employees who know the truth?
Bravery. Only cowards hides the truth. Facing the truth would be an example of bravery.
Compassionate. Were the actions of Fetterman, Upperman and Harvey compassionate toward Donald Meyer, or did they just empower him with respect to breaking the rules.
Passionate. Fetterman and Upperman were certainly passionate in their attempts to coerce me into ignoring my duties as The Finance Manager of The Carr P Collins facility. However, neither of them passionately approached their jobs with any semblance of ethical behavior.
Showing posts with label cover up. Show all posts
Showing posts with label cover up. Show all posts
Saturday, August 3, 2013
Wednesday, July 24, 2013
Let's Examine That 18% Overhead Claim
The Salvation Army states the organization has an 18% overhead cost, claiming 82% of the dollars you donate go directly to the benefit of those in need. Let's examine that claim. It is very misleading.
The organization claims that it submits to annual audits, performed by Arthur Andersen, yet those audits are not public record. The claims that The Salvation Army submits to annual audits is very public, but the annual reports you can access on the organization's website contain only unaudited financial statements. Check online, you will not find an audit financial statement. Why not put the audited financial statements online?
Why does The Salvation Army submit to an annual audit? The organization claims it is under no obligation to do so. That is a false claim. The Salvation Army has state and federal government contracts that require the organization to have annual audits, conducted by an outside audit firm. So, why not release those financial statements to the public? What is The Salvation Army hiding from the public that it cannot hide from state and federal government agencies?
The Salvation Army is hiding a lot! With respect to this blog, the organization buries overhead expenses in a category called program expenses. Program expenses are not reported as overhead.
For example, anything paid for an officer, as part of his/her compensation package, is considered program expenses. The Salvation Army sees its officers as gods over the corps they manage. As such, they are the administrative managers and fund raisers for the corp, as well as the chaplains. There is no question that administrative and fund raising expenses are overhead expenses.
Most officers claim to spend at least 50% of their time on administrative and fund raising matters. It follows that the same percent of officers compensation should be considered as overhead expense, but The Salvation Army does not report any part of officers' compensation as overhead expense.
Let's take a look at that compensation package. Officers in The Salvation Army say that there compensation is slightly above minimum wage. I truly believe they are taught that in officer train school. The fact that it is a bold face lie seems irrelevant. It sounds good when the officer is asking for donations.
It is true that most officers receive money allowances that are close to minimum wage. There are no taxes taken from that allowance. The Salvation Army calculates the tax liability for the officer and gives the officer a grant to pay that tax liability.
In addition to a cash allowance, The Salvation Army pays all living expenses, transportation, medical insurance costs and retirement plan costs for its officer. It also treats them to luxury vacations, such as cruises disguised as conferences. The Salvation owns the homes the officers live in, pays all utilities, insurance and upkeep on the home. The Salvation Army owns the vehicle (s) driven by its officers, pays all gasoline, insurance and maintenance costs.
Salvation Army officers enjoy a higher standard of living than most who donate money to the organization.
The Salvation Army officer's compensation package is bullet proof with respect to downturns in the economy. When utility costs rise, The Salvation Army pays the increase. When gasoline prices rise, The Salvation Army pays the increase. Actually, your donations pay the increased costs.
All officer compensation is reported as program costs by The Salvation Army. At least 50% of these costs should be reported as overhead, which would change the 18% overhead claim dramatically. There is no way 82% of the money you donate makes it to those in need.
Two other expenses The Salvation Army does not report as overhead are "Support Services" and "Statewide Services". These two expenses total 11.8% of all money received by Salvation Army Corps from donations, grants and agency contracts. If you donate $1.00 to The Salvation Army, the organization's Divisional Headquarters offices and Territorial Headquarters offices skim nearly 12% of that dollar off the top, as administrative overhead.
This percentage is left out of the equation when calculating a minimal 18% overhead. This does not follow Generally Accepted Accounting Principles. Why is the Salvation Army allowed to make the 18% overhead claim? You allow them to without questioning the claims! Start asking questions. Your questions will not be answered. The Salvation is not a transparent organization. It's attractive public image is manufactured by very well oiled public relations firms. The view is much less attractive within the organization.
Another issue with respect to costs reported as program expenses, is the "expense" category, "Gifts In Kind". This represents donated food, clothing and supplies, charged to program expenses at market value. Public volunteer hours are also valued at $15 to $20 per hour and charged to program expenses. (This hourly rate is higher than the hourly pay rate of most The Salvation Army employees).
Also it is questionable as to whether gifts-in-kind should be classified as a program "expense". The Salvation Army pays nothing for these items, but values them as expenses to the organization. The Salvation Army also books income for these gifts-in-kind, equal to the amount of the expenses charged to program expenses, but does not include that income when it calculates the percentage of income to expenses that go directly to those in need. This definitely inflates that claim that 82% of all donations go directly to those in need. Remember, The Salvation Army pays nothing for gifts in kind, but accounts for these items as program expenses, at market value.
You should be aware of these facts before you choose to believe The Salvation Army's claim that it holds its overhead costs to 18% of your donated dollars. Whether, or not, you donate to The Salvation Army is a choice you should make based on all the facts. The Salvation Army spends much more of your donated dollars on overhead than the organization reports. How do you think The Salvation Army built a net worth of $8.8 billion? That net worth came from your donations!
The organization claims that it submits to annual audits, performed by Arthur Andersen, yet those audits are not public record. The claims that The Salvation Army submits to annual audits is very public, but the annual reports you can access on the organization's website contain only unaudited financial statements. Check online, you will not find an audit financial statement. Why not put the audited financial statements online?
Why does The Salvation Army submit to an annual audit? The organization claims it is under no obligation to do so. That is a false claim. The Salvation Army has state and federal government contracts that require the organization to have annual audits, conducted by an outside audit firm. So, why not release those financial statements to the public? What is The Salvation Army hiding from the public that it cannot hide from state and federal government agencies?
The Salvation Army is hiding a lot! With respect to this blog, the organization buries overhead expenses in a category called program expenses. Program expenses are not reported as overhead.
For example, anything paid for an officer, as part of his/her compensation package, is considered program expenses. The Salvation Army sees its officers as gods over the corps they manage. As such, they are the administrative managers and fund raisers for the corp, as well as the chaplains. There is no question that administrative and fund raising expenses are overhead expenses.
Most officers claim to spend at least 50% of their time on administrative and fund raising matters. It follows that the same percent of officers compensation should be considered as overhead expense, but The Salvation Army does not report any part of officers' compensation as overhead expense.
Let's take a look at that compensation package. Officers in The Salvation Army say that there compensation is slightly above minimum wage. I truly believe they are taught that in officer train school. The fact that it is a bold face lie seems irrelevant. It sounds good when the officer is asking for donations.
It is true that most officers receive money allowances that are close to minimum wage. There are no taxes taken from that allowance. The Salvation Army calculates the tax liability for the officer and gives the officer a grant to pay that tax liability.
In addition to a cash allowance, The Salvation Army pays all living expenses, transportation, medical insurance costs and retirement plan costs for its officer. It also treats them to luxury vacations, such as cruises disguised as conferences. The Salvation owns the homes the officers live in, pays all utilities, insurance and upkeep on the home. The Salvation Army owns the vehicle (s) driven by its officers, pays all gasoline, insurance and maintenance costs.
Salvation Army officers enjoy a higher standard of living than most who donate money to the organization.
The Salvation Army officer's compensation package is bullet proof with respect to downturns in the economy. When utility costs rise, The Salvation Army pays the increase. When gasoline prices rise, The Salvation Army pays the increase. Actually, your donations pay the increased costs.
All officer compensation is reported as program costs by The Salvation Army. At least 50% of these costs should be reported as overhead, which would change the 18% overhead claim dramatically. There is no way 82% of the money you donate makes it to those in need.
Two other expenses The Salvation Army does not report as overhead are "Support Services" and "Statewide Services". These two expenses total 11.8% of all money received by Salvation Army Corps from donations, grants and agency contracts. If you donate $1.00 to The Salvation Army, the organization's Divisional Headquarters offices and Territorial Headquarters offices skim nearly 12% of that dollar off the top, as administrative overhead.
This percentage is left out of the equation when calculating a minimal 18% overhead. This does not follow Generally Accepted Accounting Principles. Why is the Salvation Army allowed to make the 18% overhead claim? You allow them to without questioning the claims! Start asking questions. Your questions will not be answered. The Salvation is not a transparent organization. It's attractive public image is manufactured by very well oiled public relations firms. The view is much less attractive within the organization.
Another issue with respect to costs reported as program expenses, is the "expense" category, "Gifts In Kind". This represents donated food, clothing and supplies, charged to program expenses at market value. Public volunteer hours are also valued at $15 to $20 per hour and charged to program expenses. (This hourly rate is higher than the hourly pay rate of most The Salvation Army employees).
Also it is questionable as to whether gifts-in-kind should be classified as a program "expense". The Salvation Army pays nothing for these items, but values them as expenses to the organization. The Salvation Army also books income for these gifts-in-kind, equal to the amount of the expenses charged to program expenses, but does not include that income when it calculates the percentage of income to expenses that go directly to those in need. This definitely inflates that claim that 82% of all donations go directly to those in need. Remember, The Salvation Army pays nothing for gifts in kind, but accounts for these items as program expenses, at market value.
You should be aware of these facts before you choose to believe The Salvation Army's claim that it holds its overhead costs to 18% of your donated dollars. Whether, or not, you donate to The Salvation Army is a choice you should make based on all the facts. The Salvation Army spends much more of your donated dollars on overhead than the organization reports. How do you think The Salvation Army built a net worth of $8.8 billion? That net worth came from your donations!
Monday, July 15, 2013
Corruption In The Salvation Army's Vehicle Donation Program
There are issues with The Salvation Army's vehicle donation program.
One Salvation Army Corp officer sold donated vehicles, pocketed the
money and issued fraudulent letters of donated value to donors who may
have used those fraudulent documents to take deductions when they filed
their income tax returns.
The Salvation Army sells 500,000 donated vehicles annually, raising more than $250 million for the organization's coffers. Corruption within this program is nationwide. It is far to easy for corp officers to sell donated vehicles and pocket the money. Because The Salvation Army wants you to keep donating vehicles and money, the organization conspires to cover up the illegal actions of its officers.
In Harlingen, Texas one Salvation Army officer accepted 18 vehicles from donors over one fiscal year. One of those vehicles was sold by the Salvation Army, four were not in condition to be sold, one was repaired, using donated dollars, and given to The Salvation Army officer's daughter. Thirteen of the vehicles were sold by The Salvation Army officer. He pocketed the money and issued fraudulent letters to vehicle donors.
The Internal Revenue Service allows you to donate your vehicle to a non-profit organization for resale. If you donate a vehicle the tax code allows you to take a deduction equal to the amount for which the vehicle is sold to its new owner. The non-profit organization must send a letter to you indicating the amount for which the vehicle sold before you can legally take a deduction for the donated vehicle.
I was one of two people who audited the Harlingen Corp's vehicle donation program, so I have first hand knowledge of the issues related to that Corp and its Corp Officer. What follows are some of the issues.
Thirteen of the vehicles in question were sold for an undetermined amount. The amount of sale was never determined because the Corp Officer pocketed the money and refused to say how much he received from the sales. We do know that the officer issued letters to the donors for sales values of some of the vehicles, ranging from $700 to $3,200. These letters, even if the officer sold the vehicles for the amounts stated in the letters, were fraudulent since The Salvation Army, a non-profit organization, never received the money.
One vehicle was repaired, using dollars donated to the Corp by the public, and was being driven by the Corp Officer's daughter. At the time I participated in the audit, title to the vehicle was still in the name of The Salvation Army. A donor letter was issued, even though the vehicle was not actually sold.
The Corp Officer was not prosecuted. No real attempt was made to quantify the amount he pocketed from his criminal actions. It's likely he never paid income taxes on the money he pocketed, which constitutes tax evasion on his part. All of the letters he issued to donors were acts of fraud against the federal government, specifically The Internal Revenue Service.
At least three officers in The Texas Divisional Headquarters of The Salvation Army, Major Everett Wilson, Major Ken Johnson and Major James Taylor conspired to cover up the Harlingen Corp Officer's actions. They conspired to cover up acts of fraud against the federal government.
The Salvation Army has a standard procedure of cover up when one of its black uniform wearing officers breaks the law. There is a think black line of protection that covers up his/her actions. If the officer's actions are known within the community, he/she is transferred to a new location where the officer can continue to prey on the unsuspecting, trusting public.
The think black line is there for all Salvation Army officers. They all know it exists. Even those who have not yet participated in cover up know the cover ups exist. They turn their heads. Somehow they all sleep well at night. How is this possible? Could it be that they all know the thin black line will be there for them if they ever need a cover up on their behalf?
Sadly, your donations pay the cost of their cover up actions. Think twice before you donate to this corrupt organization. Find a worthy charity for you dollars.
The Salvation Army sells 500,000 donated vehicles annually, raising more than $250 million for the organization's coffers. Corruption within this program is nationwide. It is far to easy for corp officers to sell donated vehicles and pocket the money. Because The Salvation Army wants you to keep donating vehicles and money, the organization conspires to cover up the illegal actions of its officers.
In Harlingen, Texas one Salvation Army officer accepted 18 vehicles from donors over one fiscal year. One of those vehicles was sold by the Salvation Army, four were not in condition to be sold, one was repaired, using donated dollars, and given to The Salvation Army officer's daughter. Thirteen of the vehicles were sold by The Salvation Army officer. He pocketed the money and issued fraudulent letters to vehicle donors.
The Internal Revenue Service allows you to donate your vehicle to a non-profit organization for resale. If you donate a vehicle the tax code allows you to take a deduction equal to the amount for which the vehicle is sold to its new owner. The non-profit organization must send a letter to you indicating the amount for which the vehicle sold before you can legally take a deduction for the donated vehicle.
I was one of two people who audited the Harlingen Corp's vehicle donation program, so I have first hand knowledge of the issues related to that Corp and its Corp Officer. What follows are some of the issues.
Thirteen of the vehicles in question were sold for an undetermined amount. The amount of sale was never determined because the Corp Officer pocketed the money and refused to say how much he received from the sales. We do know that the officer issued letters to the donors for sales values of some of the vehicles, ranging from $700 to $3,200. These letters, even if the officer sold the vehicles for the amounts stated in the letters, were fraudulent since The Salvation Army, a non-profit organization, never received the money.
One vehicle was repaired, using dollars donated to the Corp by the public, and was being driven by the Corp Officer's daughter. At the time I participated in the audit, title to the vehicle was still in the name of The Salvation Army. A donor letter was issued, even though the vehicle was not actually sold.
The Corp Officer was not prosecuted. No real attempt was made to quantify the amount he pocketed from his criminal actions. It's likely he never paid income taxes on the money he pocketed, which constitutes tax evasion on his part. All of the letters he issued to donors were acts of fraud against the federal government, specifically The Internal Revenue Service.
At least three officers in The Texas Divisional Headquarters of The Salvation Army, Major Everett Wilson, Major Ken Johnson and Major James Taylor conspired to cover up the Harlingen Corp Officer's actions. They conspired to cover up acts of fraud against the federal government.
The Salvation Army has a standard procedure of cover up when one of its black uniform wearing officers breaks the law. There is a think black line of protection that covers up his/her actions. If the officer's actions are known within the community, he/she is transferred to a new location where the officer can continue to prey on the unsuspecting, trusting public.
The think black line is there for all Salvation Army officers. They all know it exists. Even those who have not yet participated in cover up know the cover ups exist. They turn their heads. Somehow they all sleep well at night. How is this possible? Could it be that they all know the thin black line will be there for them if they ever need a cover up on their behalf?
Sadly, your donations pay the cost of their cover up actions. Think twice before you donate to this corrupt organization. Find a worthy charity for you dollars.
Saturday, July 6, 2013
Salvation Army's Pension Liability
For the fiscal years 2008 - 2011, The Salvation Army reported a $1.6 billion deficit, (expenses over income). The annual average income for the four fiscal years was $2.7 billion. These numbers come from the organization's unaudited annual reports.
The Salvation Army states that the organization has annual audits by an outside audit firm. It would be nice to see the auditor's opinions with respect to the operations for those years, but the audited financials are not available to the public. Unaudited financial statements reflect an operating deficit (loss) of almost $250 million for the fiscal year ending September 30, 2009.
During that fiscal year many hourly employees were told to reduce their hours from a 40 hour workweek, to 36 hours. They were also told The Salvation Army could not give raises that year, yet Salvation Army officers got raises and were treated to a luxury cruise, courtesy of your donations and sacrifices made by hourly employees. Salvation Army officers made no sacrifices when the economy was at is lowest point, during the recession.
One item on the most current unaudited balance sheet, the fiscal year ended September 30, 2011, is a liability for pensions, approaching $1.8 billion. The liability for unfunded pensions is 67% of the organization's average annual income for the past four years. Is The Salvation Army breaking the law by not paying this liability?
The answer is actually no. Since The Salvation Army offers its retirement plan as a benefit, and does not ask for participation from employees and officers, the organization cannot be held accountable for failure to fund the retirement plan. However, is it Trustworthy (one of the organizations five core values)? Is it ethical? Is it moral? The answer to those questions is also no.
The Salvation Army is booking a liability for pensions, but from where will that money come to pay that debt? It will come from potential future donors. The Salvation Army is hoping you, and many like you, will donate enough money in future years to bail them out. At some point, The Salvation Army will divert money you donate for those in need to fund its officers and employees retirement.
Donors beware of this organization, especially if you are responding to one of The Salvation Army's disaster pleas, such as the tornado in Moore, Oklahoma. The money you donate does not go to the victims of the disaster. The money goes to The Salvation Army. The Salvation Army sells disaster relief at a profit. You may think you are donating to the victims of disasters; in reality your donations may be diverted to pay Salvation Army officers' retirements.
The Salvation Army states that the organization has annual audits by an outside audit firm. It would be nice to see the auditor's opinions with respect to the operations for those years, but the audited financials are not available to the public. Unaudited financial statements reflect an operating deficit (loss) of almost $250 million for the fiscal year ending September 30, 2009.
During that fiscal year many hourly employees were told to reduce their hours from a 40 hour workweek, to 36 hours. They were also told The Salvation Army could not give raises that year, yet Salvation Army officers got raises and were treated to a luxury cruise, courtesy of your donations and sacrifices made by hourly employees. Salvation Army officers made no sacrifices when the economy was at is lowest point, during the recession.
One item on the most current unaudited balance sheet, the fiscal year ended September 30, 2011, is a liability for pensions, approaching $1.8 billion. The liability for unfunded pensions is 67% of the organization's average annual income for the past four years. Is The Salvation Army breaking the law by not paying this liability?
The answer is actually no. Since The Salvation Army offers its retirement plan as a benefit, and does not ask for participation from employees and officers, the organization cannot be held accountable for failure to fund the retirement plan. However, is it Trustworthy (one of the organizations five core values)? Is it ethical? Is it moral? The answer to those questions is also no.
The Salvation Army is booking a liability for pensions, but from where will that money come to pay that debt? It will come from potential future donors. The Salvation Army is hoping you, and many like you, will donate enough money in future years to bail them out. At some point, The Salvation Army will divert money you donate for those in need to fund its officers and employees retirement.
Donors beware of this organization, especially if you are responding to one of The Salvation Army's disaster pleas, such as the tornado in Moore, Oklahoma. The money you donate does not go to the victims of the disaster. The money goes to The Salvation Army. The Salvation Army sells disaster relief at a profit. You may think you are donating to the victims of disasters; in reality your donations may be diverted to pay Salvation Army officers' retirements.
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