If the board felt that an audit was not cost effective, then the bylaws
should have been changed, not just ignored.

Mike Schumann

wrote in message
oups.com...
I still think people are missing the point regarding SSA's financials.
When I was on the Board in the late 1990s, I raised the issue of the
annual audit. I learned that the difference in cost of an audit over
the review we had done most years was on the order of $20,000 to
$30,000 per year (it's probably more now). And the Budget and Finance
Committee (FinComm) at that time kept in close touch with the
bookkeeper and the CPA firm. FinComm's rationale for not ordering an
audit every year was that it didn't make economic sense, as I noted in
my posting. And they were right...economically. We long ago saved more
in audit fees than this debacle will cost us. The other side of that
coin is that SSA would be much worse off economically now if audits had
been done every year.

As Tom Seim notes, the proper way would have been to change the ByLaws.
I'm not sure why that wasn't attempted except that any change in the
ByLaws was a monumental undertaking and this one would have been
controversial. So FinComm exercised their business judgment.

People have popped off about it being illegal to ignore the ByLaws. I'm
no lawyer but I suspect that's not strictly true. There may well be
civil liability. But for that, one must prove damages. And now we're
back to SSA being better off having not paid for all those audits even
after losing a bunch of money this time.

The REAL issue is why the Budget & Finance Committee (FinComm) chose to
stop doing reviews and took a much more hands-off approach to SSA
finances. The second half of that question is answered by "SSA hired a
CFO who did that." But prudence should have required FinComm to
maintain a close watch on the finances while continuing to engage the
CPA every year for at least a review. As it was, there appears to have
been no CPA engaged and relatively less oversight by FinComm, leaving
SSA totally dependent on the CFO. We know where that led.

And to return to my posting again, either FinComm or the accountants
(or both) must bear responsibility for letting this happen. Perhaps
ExComm. Yet all those parties are still deeply involved in
investigating and remedying it. That's a conflict of interest. That's
why independent oversight is needed...immediately.

ExComm is meeting tomorrow (29 Sep). The Board meeting is this Saturday
(30 Sep). Let your directors know how you feel. They do react to
rationale pressure.

Chip Bearden