The long awaited 2007 audit of the Boothbay Region Humane Society (BRHS) shows the organization has net assets of $2 million.
Direct public support totals $224,203.
IRS Form 990, the financial information return for tax-exempt organizations, shows BRHS holds land, buildings and equipment worth $1 million (reflecting $171,038 in depreciation), a parcel of land in Boothbay Harbor valued at $158,000, and other investments totaling $703,351.
Fred Brewer, certified public accountant with the Bath firm of William Brewer, conducted the audit over the past six months and completed it Thursday. He said there was also, at year’s end, $231,232 in certificates of deposit and checking accounts.
Dividends and interest from securities were $24,757 and interest on savings and temporary cash investments was $9663.
Two individuals and a foundation contributed $100,000, $5000, and $6000.
Total revenues of $333,647 were $80,000 less than total expenses of $414,523, a shortfall Brewer described as “not a big deal” considering the size of the fund balances. He said $29,000 of the deficit “is stuff they already paid for.”
Functional expenses total $414,523, of which $380,598 went to program services for the society’s stated purpose of providing humane care, food, and shelter for stray and abused animals.
Among the expenses are salaries and wages of Lincoln County Animal Shelter employees ($167,961), employee benefits ($8090) and payroll taxes ($19,852); $7860 in compensation to treasurer Harold Orne, who is also a member of the board; depreciation totaling $29,371 and including $4181 for the Thrift Store in Boothbay Harbor which BRHS president Loraine Nickerson operates as a shelter fundraiser; $33,139 for supplies; $12,974 for office expense, $83,713 for veterinarian services, $6341 for insurance, and $23,719 for utilities. Total fundraising costs were $11,277.
Gross rents on rental property in Wiscasset were $6875 but expenses ($8501) outstripped income by $1626 because of property taxes, depreciation, and repairs and maintenance costs.
Finishing the audit was delayed primarily because of having to ascertain the historical cost of properties acquired by or transferred to BRHS as a gift. The properties were valued at their original cost, that is, when they were acquired many years ago. The figures in the audit do not reflect the increase in value of a house bought, for example, for $20,000 ten years ago that could now be worth $50,000, Brewer explained.
While unable to comment on the cost of the audit, Brewer said the expense of follow-up audits and annual filings of Form 990 would not be so great because paperwork that has been neglected in recent years has now been done. The cost of the audit will appear as a functional expense on the 2008 Form 990, which is due to be filed May 15, 2009. BRHS sought and received an extension on filing this year.
“The state is going to want to see a 990 every year as part of their licensing requirements under the Charitable Organization Act,” Brewer remarked. Because of questions of accountability and finances, originally raised by former trustee Don Loprieno of Bristol, the state will “want to be satisfied that things were resolved,” the auditor said.
As for the lengthy process of obtaining accurate financial information from the BRHS, a quest initiated by Loprieno, Brewer said, “I don’t think anyone had any idea, they just didn’t understand. They weren’t covering anything up.” After the person handling investments died, “no one (on the board of directors) kept up with them because they didn’t have the background.”
BRHS treasurer Harold Orne delivered copies of the audit and Form 990 to state Assistant Attorney General Carrie Carney last Friday for approval, said society president Loraine Nickerson.
Several messages seeking further information for this news story were left with Asst. AG Carney.
The society’s registration as a charitable organization with the state’s Office of Licensing and Regulation (OLR) was pending as of last week when the Charitable Solicitations Program administrator Elaine Thibodeau said she was expecting an application.
“I know the Attorney General’s Office has been in communication with Harold Orne,” she said.
Under pressure last September from an AG’s Office order to cease from soliciting until registering with the OLR as an exempt or non-exempt charity, BRHS incorrectly submitted an application as an exempt charitable organization. “Based on the amount of money they seem to be taking in,” said Thibodeau last week, “we question whether (that category) is applicable.” It seemed there was some misunderstanding about the word “exempt,” she added, and that BRHS thought the term applied to exemption under IRS law.
At press time there was no response from Thibodeau to a telephone message seeking updated information.
The man who asked BRHS nearly two years ago to see its financial information, former board director Loprieno, has his own perspective.
“Anyone who knows me knows how I feel about animals and the loving care they deserve,” he said. However, for too long a group that depends for its existence on public charity has acted as “a private club.”
It was founded in 1959, Loprieno recalled, and over the years, while responsible for hundreds of thousands of dollars, it has “repeatedly ignored its own bylaws, which require an annual audit.” In addition, unlike other humane societies, he said, “it never bothered to register as a charitable organization with the state, thereby avoiding having its finances reviewed by an outside body.”
By failing to submit the Form 990 annually, which is the public’s primary way of inspecting a tax-exempt organization’s financial profile, “it resists fiscal transparency to its own directors and complies only when under legal pressure to do so.”
Taking all this into consideration, “it’s difficult to support the conclusion that BRHS didn’t understand their monetary obligations,” said Loprieno.
With the completion of the audit, “their first in eight years,” Loprieno noted, “the Boothbay Region Humane Society, under close scrutiny, is starting to do what it should have been doing all along – accounting for the many donations it receives on behalf of the animals in its care.”
While the federally required public document “will help shed light on finances that have not been previously disclosed,” Loprieno said, “if BRHS is interested in retaining the confidence of the citizens who support it, it will make the new audit available to the public as well.”
