News about SSA from the SSA Treasurer, Phil Umphres

As SSA Treasurer, I have several news items about SSA that may be of
interest to the readers of this discussion group.

1. SSA'S FORMER CHIEF FINANCIAL OFFICER, ALAN GLEASON, PLEADS GUILTY
TO EMBEZZLING FROM SSA.

First, we are happy to report that Alan Gleason, SSA's former Chief
Financial Officer, pled guilty on December 17, 2006, in criminal
district court in Lea County, New Mexico, to eight felony counts of
embezzlement from SSA in violation of New Mexico criminal statutes
Section 30-16-8.

The guilty plea came as part of a plea bargain under which Gleason was
sentenced to a total of 24 years in prison, with the confinement
portion of the sentence being suspended. Gleason will now be on
supervised probation for the next five years. If he successfully
completes probation he will not serve any jail time. However, if he
violates the conditions of his probation the suspension can be lifted
and he can be ordered to prison.

One of the conditions of the plea agreement is that Gleason pay
restitution to SSA totaling $67,000, of which $50,000 was paid at the
time of sentencing and has now been received by SSA. The balance of
$17,000 to be paid at some point during the five year term of his
probation.

2. IRS WAIVES PENALTIES AGAINST SSA FOR LATE FILING OF FEDERAL
PAYROLL TAX RETURNS

As those of you who have been following SSA's financial saga over the
past 16 months know, one of the most devastating actions by our
previous financial officer, Alan Gleason, was his failure to pay more
than $260,000 in payroll taxes owed to the Internal Revenue Service
for the years 2003, 2004 and 2005 or to file the required quarterly
payroll tax returns (IRS Form 941) and annual information tax returns
(IRS Form 990) for those years. Although SSA was able to obtain the
money to pay the overdue payroll taxes by way of a loan from the SSA
Foundation, the IRS had also initially assessed penalties and interest
for the late filings that amounted to an additional $235,000.

I am pleased to report that the IRS has now granted our request for
relief from the penalties and will assess only interest for the late
payment of the payroll taxes. Although we are still awaiting word from
the IRS on the final interest amount owed, the figure will be
somewhere between $36,000 and $50,000. While this is still a painful
pill to swallow, it is one that fortunately can be swallowed. Indeed,
we have already made a payment of more than $31,000 to the IRS in
anticipation of satisfying our obligations to that organization and
putting this difficult experience behind us.

3. SSA'S CURRENT FINANCIAL CONDITION IS VERY GOOD, ALTHOUGH THERE ARE
CHALLENGES AHEAD.

Although the December financial statements have not yet been
completed, we can now safely state that SSA ended 2007 with a
significant operating surplus (non-profit organizations don't have
"profits" or "losses," but rather "surpluses" and "deficits"!) We also
are well into the process of preparing a budget for 2008, and
anticipate that next year will also show an operating surplus (prior
to payments on the debt owed to the SSA Foundation), although a much
smaller one as a result of some recent staff hirings and resulting
higher wage costs.

There has been a lot of uninformed speculation among the recreational
flying community (including writers of blogs on this discussion group)
about whether SSA could financially survive the financial crisis of
the past year. As your Treasurer, I can assure you that we HAVE
survived the crisis and that the financial future of our organization
looks good. We still have some financial challenges ahead of the
organization, not the least of which is the need to repay the balance
still owed on the $260,000 loan that was borrowed from the SSA
Foundation (a separate organization that is in effect a subsidiary of
SSA and that manages SSA's endowment and other designated gifts to
SSA). For the next four years, the loan repayments will drain over
$83,000 from our cash flow. That is money that we would prefer
spending on programs and additional staffing. Nevertheless, I am
confident that these challenges can be met, particularly given the
generous levels of financial support that SSA members have shown
through their tax deductible donations to SSA in both last years and
this years Eagle Fund campaign.

4. OTHER INFORMATION ABOUT SSA'S CURRENT AFFAIRS

I have read postings on this website complaining about the lack of
information available about SSA's affairs. I have found these
complaints perplexing, as the SSA website contains a wealth of
information. The minutes of all Excom and Board of Directors meetings
are posted on the website and are available to all SSA members once
they have logged on to the site. You can find the minutes by following
the menu buttons found on the home page from "Home The SSA
Governance." The link to the minutes is the second link under the
information for the Executive Committee.

You can also find financial statements for SSA on the same webpage at
the link under the "Budget and Finance Committee." Since becoming
Treasurer, I have made it a priority to get quarterly financial
statements posted as soon as possible after the end of each quarter.
With the help of SSA's dedicated and hard working Accounting Manager,
Judy Blalack, I expect that we will have the fourth quarter 2007
statement posted no later than the end of February.

I hope all readers of this posting will visit the SSA website and take
advantage of the information and resources that are posted there. If
nothing else, check out the cool new page containing links to YouTube
soaring videos that Doug Easton just set up. Thanks Doug!

Sincerely,
Phil Umphres, Treasurer
The Soaring Society of America, Inc.