Fwd: Comments on financials

[Erica Holmes]

Team,

 

These are a few comments Ms. Reynolds, the accounting department chair, sent me at the request of Ms. Henley. While she also found it difficult to interpret the financials, she has agreed to meet with a small group of us on Wednesday at 11 AM to further review and make best of the information we have. She has suggested we request a copy of the organization's audit report; I will send an email request to WWR following our meeting today. I did hear back from Donna Peoples, the MD at WWR. She has promised to assist us in any way possible but we can further discuss this at today's meeting.

 

Kyle, Ms. Reynolds comments seem to be consistent with the work you've done thus far, excellent job! Again we will finalize the financial information we present at today's meeting.

 

See you all soon!

---------- Forwarded message ----------
From: <ruthieg...@aol.com>
Date: Sat, Feb 13, 2010 at 1:37 AM
Subject: Comments on financials
To: erica.n...@gmail.com
Cc: cdavis...@verizon.net

Hello,

 

 

I do not have time to give an in depth review of the statements since I have to drive to Nashville tomorrow starting at 7:00am.  However, these are a few comments:

 

1. The term, "net income" is not used in nonprofit accounting.  This organization has commingled business enterprise terminology with nonprofit terminology in several places on the financial statements. 
2. The "income statement" ( statement of revenues and expenses) shows that there are several sources of income, the largest being "public support."  Look up the meaning of this term.
3. The "income statement" shows that there is only one employee, the director.  Is this correct?  This one salary is the largest expense.
4. On the balance sheet, why does the company have several bank accounts?  Are these necessary and/or are they require?
5. There is a large (large in relationship to the other dollar amounts) amount in a checking account.  Good management practices would suggest to have the money at least in a money market account.
6. The presentation and the "net income" differences suggest that these financial statements cannot be relied upon to tell the results of operations and the financial position.
7. There is no statement of cash flow
8. Does the organization have an audit report?  If so, can you get a copy?  If not, all entities need an annual audit. 

 I  will return to town on Wednesday. I have a class at 12:40pm.  We can meet Wednesday morning at 11:00am if you like.

 

Due to the fact that I just got this today, I have not had a chance to do justice to the analysis.  It would also help to know something about the company and its mission.

 

R. Reynolds