|July 18, 2011|
|Financial Oversight Lacking at PRSA|
|By Jack O'Dwyer|
Sarbanes-Oxley, to which PR Society of America says it is “committed,” demands that the audit chair be on the board and also be a financial expert. Audit chair of the Society is Cheryl Ball, head of Curved Edge Consulting, Knoxville. She is not on the board and her website describes her as a “visionary marketing communications professional.”
Before opening her own firm, she was director of marketing for Le Blanc Financial Group, Knoxville, overseeing advertising, media relations, advisor marketing, special events, client relations and charitable giving.
She was also responsible for firm operations and was “Series 7 and 24 registered with the NASD.” This means she was a licensed broker and has some financial training. It is not the same as “Chartered Financial Analyst.”
Ball has some financial background but she goes along with the Society’s audit which violates FASB rule 958-605-2-1 that calls for dues to be booked over the period to which they relate.
Attempts are being made to find out who is on her audit committee. The PRS website only gives chairs of committees. Only they can identify their committee members although in the 1990s PRS published a booklet of more than 70 pages with all committee members listed.
Treasurer Tate Polices Self
The Finance Committee is headed by Phil Tate of Luquire George Andrews, Charlotte, N.C., who has been treasurer a record-breaking two years in a row. He is in the position of judging his own work.
Tate has been asked who else is on his committee.
Pisinski Ordered Proper DD Accounting
Steve Pisinski, 2000 chair, ordered Deloitte & Touche to defer the dues and this item was $813,116, up from $425,309 in 1999. However, the new boards headed by Kathy Lewton in 2001 and Joann Killeen in 2002 ordered D&T to sign off on non-deferral of dues again.
D&T quit. The Society announced in early 2002 that it was looking for a new auditor after the 2001 audit was finished. It looks like D&T wouldn't go along with the reversion to not deferring dues income.
The DD headed down again to $566,459 in 2001 and $389,941 in 2002. The 2010 audit by PKF shows only $290,948 in DD on dues income of $4.4M.
Kathy Lewton & Joann Killeen
This breaks FASB's rule on deferring dues income which all the major professional assns. obey as well as IABC. D&T had replaced Ernst & Young in 1992 which was the first audit after E&Y apparently was ordered by the Society to drop the Statement of Functional Expenses. This meant the loss of 324 dollar figures (27 categories of spending under 12 different headings).
There was no such statement in the 1991 audit. Members howled so loud that it was brought back for the 1992 audit but about eight categories were left out including legal; board of directors expenses; insurance and audit; chapter support; district support; member communications, and staff travel.
The costs of the board had gone from $102,749 in 1988 to $177,836 in 1990.
It appears that E&Y quit rather than take part in the truncated functional expenses.
As we all know, the nation is on its economic knees because of poor, late and non-existent financial reporting. The Society should be setting an example of the finest in financial reporting. It is not doing that.
Return to Latest News