C. Dianne Black-Nixon wrote:
SSA Members,

Please visit the SSA homepage at www.ssa.org for an important message
regarding the Society.

[ Why it's not posted here is beyond me. Text below. ]

Message from the SSA Chairman

September 1, 2006

Dear SSA Member:

As Chairman of the SSA Board of Directors, I am committed to keeping
members fully informed regarding all issues relating to our Society, and
must now report some serious societal financial problems, and actions
the Executive Committee has taken to deal with them.

On August 5 th 2006, I notified the Board of Directors that the
Executive Committee had been informed by the SSA Executive Director,
Dennis Wright, that the Society had not filed federal tax-exempt
information returns with the Internal Revenue Service since 2002. In the
past, Johnson, Miller & Co. PC, CPA, our outside accounting firm,
prepared SSA’s returns. Both Dennis Wright and James Francis, a
principal of Johnson, Miller & Co., reported to the Executive Committee
that this omission was due to our Chief Financial and Administrative
Officer, Alan Gleason, not providing sufficient financial data required
by Johnson, Miller & Co. to prepare the returns. The Executive Committee
immediately asked Johnson, Miller & Co. to come to the SSA’s office and
obtain all the requisite data to enable them to do so.

On August 17, 2006, Mr. Wright reported to the Executive Committee that
during the gathering of information to prepare the delinquent returns,
Mr. Francis had discovered that the SSA had not submitted federal
payroll withholding, social security or Medicare, as well as New Mexico
state withholding taxes for at least five quarters beginning in 2003.
Although payments were made for other quarters, SSA did not file
appropriate returns for at least twelve quarters. Additionally, the
financial statements, specifically the balance sheets presented to the
Board and the membership, did not reflect the unpaid taxes as
liabilities of the Society. At this time, it is not known whether
anything else is inaccurate in the balance sheets, however, further
investigation is ongoing.

The Executive Committee immediately retained an outside attorney and
investigated the situation. On August 23, 2006 Mr. Gleason claimed that
a lack of available cash on hand caused him to decide to not pay the
taxes when due. When questioned, he admitted not to have made anyone
else, including the Board, aware of such decisions. The Executive
Committee placed Mr. Gleason on paid administrative leave until such
time as all information required to submit the state and federal tax
returns is ascertained and it is determined exactly what federal and
state taxes are due. Once those issues are resolved, appropriate further
action regarding Mr. Gleason will be considered. Measures to protect SSA
funds and other assets have already been put in place, as has an interim
system to control SSA financial matters.

While accurate figures have not yet been derived, it appears that the
actual tax liability could be between $200,000 and $300,000 which with
the addition of interest and, to the extent not mitigated, penalties,
could total as much as $600,000.

This obviously signals a potentially catastrophic situation. The
Executive Committee intends to have a thorough and independent financial
investigation conducted to ascertain, among other things, the reasons
for the apparent cash shortfall.

To the best of its ability, the SSA will pay all applicable taxes,
penalties and interest imposed by state and federal governments. Doing
so will strain Society finances to the limit, however the SSA can borrow
from certain unrestricted funds within the SSA Foundation. To place our
Society on a sound financial footing going forward, significant
reductions in services must occur. A task force of present and former
SSA Board members has already been established to assist the Board in
this regard.

The situation I have described above is clearly the single most serious
challenge the Society has faced in its 75 year history. Please
understand that SSA leadership is totally committed to reaching a
successful resolution to this problem, but doing so will require
significant continued support by the membership. SSA members have a long
history of aiding the Society when most needed. I hope I can rely on you
personally to support your SSA leaders during this extremely difficult
time, as we strive to bring these matters to a successful resolution.
Our goals are to meet our financial obligations to state and federal
governments and to transform what has always been a struggling
organization operating “on a knife-edge” into one that is financially
strong, and that meets your needs as a member.

To save costs, all subsequent communications from me regarding these
important issues will be posted on the members-only section of the SSA
website and in SSA e-News. You may contact your Regional Director, other
members of the Executive Committee, or me directly should you have
further questions.

Sincerely yours,

C. Dianne Black-Nixon
Chairman of the Board of the Soaring Society of America