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Date: 21 Jul 2008 20:49:41
From: samsloan
Subject: Grant Perks Undermines Delegate Mandate, Says $120,000 in Fake Money
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Grant Perks Undermines Delegate Mandate, Says $120,000 in Fake Money
Has Been Restored
In a shocking series of postings to Susan Polgar's Chess Discussion
Forum, Grant Perks stated on Saturday that the auditors had caught the
error made by the delegates in placing a $50,000 cap on the amount of
imaginary money the USCF office can claim to have received.
Here is what Perks wrote at:
http://www.chessdiscussion.com/phpBB3/viewtopic.php?f=4&t=1338&start=10
The $70K adjustment is a delegate mandate that impacts the 2008 and
2009 financials. The cap hits during the second half of the fiscal
year. Apparently the delegates thought the office would be more frugal
with this limitation in place. It doesn't make sense to me since the
office knows the year end adjustment will be made each year and they
can spend based on the cap being reversed.
Normally the USCF accounts for a life membership by amortizing the
dues payment. Currently, dues are amortized over 20 years, starting in
the year the member joins. $1,000 spread over 20 years is $50 per year
per member. Under GAAP the annual income recognized is about $120,000
for all of the life memberships currently being amortized.
The Delegates limited this recognition to $50,000 each year for 2008
and 2009. Since the annual statements are on a GAAP basis, the
auditors recorded this additional $70,000 as membership income. If it
wasn't recorded the auditors wouldn't have issued a standard "clean"
audit opinion letter.
There is nothing mysterious about the entry and the auditors didn't
"discover" it. It was known during the year that this limit was in
place.
I personally feel that life memberships should be amortized over 40
years instead of the current. I based this on the fact that the
average new life member is 41 years old. The life expectancy of a 41
year old is around 40 years. By switching to 40 years the obligation
to life members would increase significantly
Grant
=================================
Grant Perks states above that the offices knows that the $50,000 cap
on imaginary money will be reversed and therefore the office can go
ahead and spend the full $120,000 of non-existent money.
One wonders if Grant Perks told the auditors the reason for the
$50,000 cap. The reason is that the $120,000 does not exist. It is a
paper transfer of imaginary non-existent money.
This explains in large part why it was first reported that the USCF
had lost $144,000 for the 2007-2008 fiscal year, but now it is being
reported that the USCF lost only $53,000. Most of the $91,000
improvement comes from the $70,000 of fake money that was added back
in.
Former USCF President Tim Redman had a shocking comment yesterday. He
wrote:
I'm not aware of any money being borrowed from the LMA in August 1999
to August 2001, when I was on the Executive Board. It would have
required a Board vote and there was none to my recollection.
Cordially,
Tim Redman
However, in August 1999 the USCF had $2 million cash in the LMA. By
August 2003 that money had completely vanished. I have been asking
persistently what happened to the $2 million.
Based on Tim Redman's comment, I suspect that the Executive Director,
George DeFeis, simply withdrew money from the LMA without telling the
board about it. The question is: What controls are there on the LMA?
Who signs the checks? I asked this question persistently during the
one year that I was on the board and never got an answer.
Sam Sloan
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Date: 22 Jul 2008 19:43:15
From: samsloan
Subject: Re: Grant Perks Undermines Delegate Mandate, Says $120,000 in Fake
|
On Jul 22, 7:13 pm, [email protected] wrote:
> On Jul 21, 10:49 pm, samsloan <[email protected]> wrote:
>
>
>
> > Grant Perks Undermines Delegate Mandate, Says $120,000 in Fake Money
> > Has Been Restored
>
> > In a shocking series of postings to Susan Polgar's Chess Discussion
> > Forum, Grant Perks stated on Saturday that the auditors had caught the
> > error made by the delegates in placing a $50,000 cap on the amount of
> > imaginary money the USCF office can claim to have received.
>
> > Here is what Perks wrote at:http://www.chessdiscussion.com/phpBB3/viewtopic.php?f=4&t=1338&start=10
>
> > The $70K adjustment is a delegate mandate that impacts the 2008 and
> > 2009 financials. The cap hits during the second half of the fiscal
> > year. Apparently the delegates thought the office would be more frugal
> > with this limitation in place. It doesn't make sense to me since the
> > office knows the year end adjustment will be made each year and they
> > can spend based on the cap being reversed.
>
> > Normally the USCF accounts for a life membership by amortizing the
> > dues payment. Currently, dues are amortized over 20 years, starting in
> > the year the member joins. $1,000 spread over 20 years is $50 per year
> > per member. Under GAAP the annual income recognized is about $120,000
> > for all of the life memberships currently being amortized.
>
> > The Delegates limited this recognition to $50,000 each year for 2008
> > and 2009. Since the annual statements are on a GAAP basis, the
> > auditors recorded this additional $70,000 as membership income. If it
> > wasn't recorded the auditors wouldn't have issued a standard "clean"
> > audit opinion letter.
>
> > There is nothing mysterious about the entry and the auditors didn't
> > "discover" it. It was known during the year that this limit was in
> > place.
>
> > I personally feel that life memberships should be amortized over 40
> > years instead of the current. I based this on the fact that the
> > average new life member is 41 years old. The life expectancy of a 41
> > year old is around 40 years. By switching to 40 years the obligation
> > to life members would increase significantly
>
> > Grant
>
> > =================================
>
> > Grant Perks states above that the offices knows that the $50,000 cap
> > on imaginary money will be reversed and therefore the office can go
> > ahead and spend the full $120,000 of non-existent money.
>
> > One wonders if Grant Perks told the auditors the reason for the
> > $50,000 cap. The reason is that the $120,000 does not exist. It is a
> > paper transfer of imaginary non-existent money.
>
> > This explains in large part why it was first reported that the USCF
> > had lost $144,000 for the 2007-2008 fiscal year, but now it is being
> > reported that the USCF lost only $53,000. Most of the $91,000
> > improvement comes from the $70,000 of fake money that was added back
> > in.
>
> > Former USCF President Tim Redman had a shocking comment yesterday. He
> > wrote:
>
> > I'm not aware of any money being borrowed from the LMA in August 1999
> > to August 2001, when I was on the Executive Board. It would have
> > required a Board vote and there was none to my recollection.
>
> > Cordially,
>
> > Tim Redman
>
> > However, in August 1999 the USCF had $2 million cash in the LMA. By
> > August 2003 that money had completely vanished. I have been asking
> > persistently what happened to the $2 million.
>
> > Based on Tim Redman's comment, I suspect that the Executive Director,
> > George DeFeis, simply withdrew money from the LMA without telling the
> > board about it. The question is: What controls are there on the LMA?
> > Who signs the checks? I asked this question persistently during the
> > one year that I was on the board and never got an answer.
>
> > Sam Sloan
>
> The only money borrowed from the LMA was approx. $450,000 that went to
> pay the line of credit run up by Cavallo that the bank called. The
> LMA assets were used as collateral for the LOC. There were no other
> loans from the LMA from 2000-Oct/ 2001.
Thank you, Jeff Loomis, for your important insights into this
situation.
Jeff Loomis was the CFO of the USCF during the period in question. He
is also the only one from that period that we can still communicate
with. The rest are, as they say, Gone With the Wind.
Sam Sloan
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Date: 22 Jul 2008 17:13:58
From:
Subject: Re: Grant Perks Undermines Delegate Mandate, Says $120,000 in Fake
|
On Jul 21, 10:49=A0pm, samsloan <[email protected] > wrote:
> Grant Perks Undermines Delegate Mandate, Says $120,000 in Fake Money
> Has Been Restored
>
> In a shocking series of postings to Susan Polgar's Chess Discussion
> Forum, Grant Perks stated on Saturday that the auditors had caught the
> error made by the delegates in placing a $50,000 cap on the amount of
> imaginary money the USCF office can claim to have received.
>
> Here is what Perks wrote at:http://www.chessdiscussion.com/phpBB3/viewtop=
ic.php?f=3D4&t=3D1338&start=3D10
>
> The $70K adjustment is a delegate mandate that impacts the 2008 and
> 2009 financials. The cap hits during the second half of the fiscal
> year. Apparently the delegates thought the office would be more frugal
> with this limitation in place. It doesn't make sense to me since the
> office knows the year end adjustment will be made each year and they
> can spend based on the cap being reversed.
>
> Normally the USCF accounts for a life membership by amortizing the
> dues payment. Currently, dues are amortized over 20 years, starting in
> the year the member joins. $1,000 spread over 20 years is $50 per year
> per member. Under GAAP the annual income recognized is about $120,000
> for all of the life memberships currently being amortized.
>
> The Delegates limited this recognition to $50,000 each year for 2008
> and 2009. Since the annual statements are on a GAAP basis, the
> auditors recorded this additional $70,000 as membership income. If it
> wasn't recorded the auditors wouldn't have issued a standard "clean"
> audit opinion letter.
>
> There is nothing mysterious about the entry and the auditors didn't
> "discover" it. It was known during the year that this limit was in
> place.
>
> I personally feel that life memberships should be amortized over 40
> years instead of the current. I based this on the fact that the
> average new life member is 41 years old. The life expectancy of a 41
> year old is around 40 years. By switching to 40 years the obligation
> to life members would increase significantly
>
> Grant
>
> =A0=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
>
> Grant Perks states above that the offices knows that the $50,000 cap
> on imaginary money will be reversed and therefore the office can go
> ahead and spend the full $120,000 of non-existent money.
>
> One wonders if Grant Perks told the auditors the reason for the
> $50,000 cap. The reason is that the $120,000 does not exist. It is a
> paper transfer of imaginary non-existent money.
>
> This explains in large part why it was first reported that the USCF
> had lost $144,000 for the 2007-2008 fiscal year, but now it is being
> reported that the USCF lost only $53,000. Most of the $91,000
> improvement comes from the $70,000 of fake money that was added back
> in.
>
> Former USCF President Tim Redman had a shocking comment yesterday. He
> wrote:
>
> I'm not aware of any money being borrowed from the LMA in August 1999
> to August 2001, when I was on the Executive Board. It would have
> required a Board vote and there was none to my recollection.
>
> Cordially,
>
> Tim Redman
>
> However, in August 1999 the USCF had $2 million cash in the LMA. By
> August 2003 that money had completely vanished. I have been asking
> persistently what happened to the $2 million.
>
> Based on Tim Redman's comment, I suspect that the Executive Director,
> George DeFeis, simply withdrew money from the LMA without telling the
> board about it. The question is: What controls are there on the LMA?
> Who signs the checks? I asked this question persistently during the
> one year that I was on the board and never got an answer.
>
> Sam Sloan
The only money borrowed from the LMA was approx. $450,000 that went to
pay the line of credit run up by Cavallo that the bank called. The
LMA assets were used as collateral for the LOC. There were no other
loans from the LMA from 2000-Oct/ 2001.
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