Accountant Charges

Goodponyz asked in her comment about the accountant charges in the past.  Here’s the scoop, drawn from the organization’s 990’s for fiscal years 2005 through 2008 (JACC’s fiscal year ends on May 31) and based on checks written so far in FY 2009:

2005     $ 4,339
2006       4,173
2007       6,381
2008       4,070
2009       3,096 (first 7 months)

A budget was approved by the JACC board (old leadership) in November or December 2008 for FY 2009 that included $9,600 for accounting fees.  Mr. Moore, the former executive director, told the board that the budget was prepared by the accountant, whom he referred to as JACC’s Chief Financial Officer.  [NOTE:  At the “opening of the books” meeting on 12/19/08, the accountant went to great lengths to insist that the title of Chief Financial Officer did not apply and that the accountant was working as an independent contractor only.]

Part of the justification for the high budget amount was given by the JACC treasurer at that time, Robert Scott.  He said that the accountant wanted to go to a different accounting package (JACC uses QuickBooks).  A large number of small businesses use QuickBooks, so it is well known and many people know how to enter data.  It was not discussed what package the accountant wanted to move JACC’s accounts to, but there would have been the cost of the software as well as the accountant’s time to convert JACC’s QuickBooks database to the new system and to set up imports from the new system to produce the MS Access Reports provided to the board each month.  Would the new system have made it easier for JACC staff to enter data and thus cut down on hours charged for accounting services?  Probably not.  QuickBooks is pretty easy to use, and in earlier times, the JACC staff used to do much of the QuickBooks data entry.

It is interesting to note how much JACC paid for FY 2009 for accounting despite the fact that no accounting work was being done on the FY 2009 books.  $651 was charged in June and July 2008.  Those were likely the accountant’s charges for completing the FY 2008 entries so annual 990 tax forms could be filed.  So about $2,445 was charged for the period in which no bookkeeping/accounting was done.  The accountant attended a couple of meetings in the community, and the rate charged for that is $84 an hour.  That works out to nearly 30 hours of consulting, or about 6 hours per month for August through December when the accountant was only working half time.  It works out to about 7.5% of the accountant’s working hours…yet no accouting was being done.

So there you have it.

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7 Responses

  1. So THIS is what it’s like to have Abbott and Costello, CPA, as an accountant.

    • I’m not sure if it’s Abbott and Costello or Tony Soprano. The attitude has not been one of making silly mistakes but of deliberately withholding the information. The accountant was provided with the documentation from the city and NRP certifying the current board and officers. Since the accountant has, in the past, worked quite closely with our NRP representative and has done so responsibly and intelligently, this feels much more deliberate and intended to harm the organization.

    • She is as big a SLUG THUG as her old JACC board members and a RIP OFF to boot.

    • She needs to be behind bars with all the other SLUG THUG members/friends of the old JACC board. They should all FRY.

  2. Yeah, you guys are in a dreadful situation but with the legal recognition, the law is on your side. And the accountant should be made aware. if they haven’t been already that their reputation (and license) could suffer if they are shown to be colluding or helping to cover up with financial irregularities. They may think that their contract was with the old group and this is just some kind of internal dispute. If you can make it clear to them (preferably in a legally framed letter) that their contract is with the organization and that the new board represents the organization now (and any other representation to the contrary is fraudulent) they may take a different approach to helping you. A reputable accountant will make their own independent legal inquiries to verify the situation and their position and then cooperate fully with legally recognized authorities. If they are not reputable, well, then there are civil and criminal ways to go after them but I can understand if you don’t want to go there.

    The kind of bookkeeping/accounting you describe should not be very expensive. Clearly either their activities and/or cash flow increased in the intervening time or the finances were permanently in a state of chaos and the accountant was doing expensive bookkeeping as well as the stuff you need an accountant for.

  3. Here’s a thought, from my experience at working in several non-profits and it may not correspond to what’s happening here but for what it’s worth–what most non profits need is an accounting process that works, not just an accountant. You need nearly everybody who works there to at least be aware of appropriate charges, purchasing and reimbursement processes and how to fill out time cards correctly (to stipulate the all important balance between fundraising/projects/administrative costs that many donors and grantors will use as a basis for whether you are well run or not. Next you need a bookkeeper who regularly keeps the books, deposits checks and pays the bills. (This is the person who should keep quick books). Ideally this should be one full time or two part time people. More than that and coordination and consistency will be a problem. The Accountant (whose time is the most expensive) should be able to swoop in at the end of the year, read the bookkeeping statements, check them against the paper and do your 990. Depending on how active you are and what kinds of other statements you need, they should be able to do this quickly and relatively reasonably every time you need it if you have consistent day to day bookkeeping. What may be happening is that your accountant is actually have to do some of your bookkeeping because it’s messy, inconsistent or incomplete. So they have to do a fair amount of digging, organizing and figuring with lots of extra hours. It’s a very expensive way to get your financial work done and a waste of money. Non-profits often suffer from this problem because they rely on a lot of part timers and volunteer or donated bookkeeping services. It can kill you though.

    If an accounting firm wants to give you a system that only they can use, I’d fire them in a heart beat. They are just trying to make you dependent on them. They are supposed to work for you, not the other way around.

    • Thank you for your wisdom, Margaret. Bookkeeping at Jordan was never a big time item (10-30 minutes a week). We didn’t write many checks in a month. When I was executive director, I did about 90% of the bookkeeping in QuickBooks (I’ve worked as a finance person for most of the past 15 years–accountant, chief financial officer, etc.). I don’t know what Jordan’s recent bookkeeping practices were, but it does seem a bit strange. The accountant was supposed to get the bank statement, the receipts with notes as to where things were to be charged. When I was there, it was more a case of verifying everything and then generating the draw requests for reimbursements and putting together the financial reports. If the past executive directors were not up to speed with QuickBooks, they may have dumped all the bookkeeping on the accountant (at $48 an hour). I hope we’ll find out more in the future. Right now, though, things don’t look particularly positive–the accountant may have turned all the financial stuff over to the “old majority” despite being advised by the city that they are no longer in charge. Don’t know if JACC will ever get its financial records back, and that would be a real pain in the you-know-what. But it appears that this is exactly what the “old majority” members (5 of them) are all about–causing the organization as much pain as they can. Why else would they file a lawsuit instead of following the grievance procedures that they insisted everyone had to follow when they were in charge? They are out to cause pain and suffering, and it hurts one of the most vulnerable neighborhoods in the city. But then, why else would they have spent so much money on what appear to be unjustified things. There are tens of thousands (if not hundreds of thousands) of Jordan money that could have done so much for the neighborhood that is now gone. And the accountant appears to be assisting in doing as much damage as possible as well. Sad!

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