SSA INVESTIGATION

Doug Haluza wrote:
You need to put more skin in the game than just your $65.

Doug, how much skin are YOU putting in?

Maby the real problem with the SSA is not the minority of dedicated
volunteers who try to make the organization work, it's the majority of
armchair critics live in their own worlds, unburdened by reality.

Maybe you need a little reality Doug, This minority of hard working
volunteers admitedly ignored the bylaws of the SSA for several
years.What part of reality am I missing here?
Frank

Frank wrote:
Doug Haluza wrote:
You need to put more skin in the game than just your $65.

Doug, how much skin are YOU putting in?

I have done hundreds of hours of volunteer work. And you?

Maby the real problem with the SSA is not the minority of dedicated
volunteers who try to make the organization work, it's the majority of
armchair critics live in their own worlds, unburdened by reality.

Maybe you need a little reality Doug, This minority of hard working
volunteers admitedly ignored the bylaws of the SSA for several
years.What part of reality am I missing here?

Then why didn't you say so sooner?

I feel the need to rise to the defense of the SSA board of directors and the
very small group of volunteers that work for the us, the SSA membership.

First, let me say that I accept the explanation of the SSA board. They have
stood up and taken responsibility for their oversight. I'm sure they are
working overtime to get to the bottom of this mess. I expect they are very,
very depressed that it could have happened on their watch.

Remember, these volunteers are dispersed around a very large country and,
for the most part, have full time careers and families. The problem, I
suspect, is less with these individuals than with the system that has them
spread thin yet charged with huge responsibilities of managing the affairs
of an organization with small group of paid employees in a very remote town.

Lets look at the weaknesses of the organizational structure before pointing
fingers at the fellow member/volunteers that serve us.

Further, I don't like the idea of a "broomcloset" SSA. No one would take us
seriously. In this world we need an organization to represent us that is
taken seriously. Lets get past this and build a far better organization to
serve us through the century. I'm sure it can be done.

Bill Daniels


"Doug Haluza" wrote in message
oups.com...

Frank wrote:
Doug Haluza wrote:
You need to put more skin in the game than just your $65.

Doug, how much skin are YOU putting in?

I have done hundreds of hours of volunteer work. And you?

Maby the real problem with the SSA is not the minority of dedicated
volunteers who try to make the organization work, it's the majority of
armchair critics live in their own worlds, unburdened by reality.

Maybe you need a little reality Doug, This minority of hard working
volunteers admitedly ignored the bylaws of the SSA for several
years.What part of reality am I missing here?

Then why didn't you say so sooner?

Doug Haluza wrote:

I have done hundreds of hours of volunteer work. And you?

Did you follow the bylaws while you were volunteering?Just kidding, I
have never done any volunteer work for the SSA (Except at a contest)
but I have done several years of volunteer work for the Civil Air
Patrol.I have given countless glider orientation rides to cadets,
provided tows, given dual instruction , helped with off season
maintenence and administrative duties .I had a senior member (whose son
had been a bit of a problem child in high school but had turned things
around and was starting his first semester at the Air Force Academy)
come up to me and tell me I was a tremendous influence on his son (Let
me tell ya, that will put a lump in your thoat).A few of these kids
have gone on to become rated glider pilots and are active in the
sport.So even though I have never done any volunteer work for the SSA,
I do feel that I have done what I could to foster the sport of
soaring.Whats more, in light of the current situation with the SSA, I
will consider helping out where I can with either a reorganized SSA or
a new national organization.

F

Dear Mr. 5-BG

The anonymous nature of your post, places it in the "Blow and Bluster"
category. Wake me up then the investigation is concluded, the damage
is understood, and the corrective actions identified.

David Walsh
SSA member



5-BG wrote:
The most recent note to members from the board answers some questions
but raises many more.

there seem to be two operative theories being investigated:
1. incompetence then panic resulted in the cfo and the ED knowingly
conspiring to withhold information and to actually present false
reports. Non payment of obligations was due to a shortfall in available
cash and they incompetently choose to hide the situation rather than to
cut costs.
2. The money was misappropriated (stolen) and disappeared into someones
pocket. This was covered up for years by falsifying financials.

the note states "

Your first letter reported that the CFAO claimed his reason for making a
unilateral decision not to pay withholding taxes was because of "...a
lack of available cash on hand..." Does the Executive Committee believe
this?

No. This is why a thorough investigation is underway. "

I guess the board feels #2 is the way things are headed.



We have yet to hear about the status of funds that are sequestered in
restricted and unrestricted special accounts for the purpose of
furthering special programs. These accounts are not consolidated in the
general financial reporting. The first note suggested that these
accounts could be a source of emergency funding to pay back taxes.

the note goes on"

SSA Bylaws require a yearly audit. When was this last accomplished?

Our accountants accomplished the last audit on October 31, 2002.

Why has an audit (or outside financial review) not been done since 2002?

The SSA hired its first CFAO during 2002. In retrospect, this may have
led to a false sense of security on the part of the Board. Over the
ensuing years, the Board decided not to spend funds on audits, instead
allocating money on other tasks felt necessary to grow the Society. In
retrospect, this was obviously “penny wise, and pound foolish.” A full
audit by an outside party is planned. "



The board has now public stated that it acted in direct violation of
the formal bylaws of the organization. To the extent that the board
willfully and knowingly took an action that was outside the bounds of
its authority, it is probably liable for damages on a personal level.

Organizations often have insurance policies to protect
shareholders/members from illegal acts by officers/boards. I wonder if
SSA has such coverage? Of course, the insurance company would, after
paying, go after the deep pockets of any involved.

Likewise, the accountants probably have E&O insurance.



OK here is the point... The SSA needs to file for bankruptcy and to be
reorganized. A master needs to be appointed by the court to investigate
and to vigorously pursue any and all avenues to recapture the lost funds
if in fact they were stolen and if in fact that theft was facilitated by
an illegal action by the board. To have the board oversee the
investigation is a basic conflict of interest and may result in one
avenue of recourse being ignored. I simply cannot see the board voting
to sue itself individually or as a group.

it is a shame that the decision, taken in 2003, not to have an audit
as required by the bylaws, is going to come back to haunt those who made
the decision.



we have already seen what happens when the fox is left to guard the
henhouse..

This just in from the SSA board:

"After the September, 2003 Board meeting, neither the Board nor
Executive Committee ever discussed audits at all. While this was
clearly an error, it was one of omission, not commission."

The facts seem quite clear so far and it is beyond any doubt that the
management and board of the SSA didn't do their jobs and every member
of the SSA should be outraged. This "Wait and See" attitude is
nonsense. A quarter million dollars (plus or minus) is missing and
neither the Board nor Executive Committee even discussed performing an
audit after September 2003?

When WERE they going to do the audit? 2010? Never?

Embezzlement. If it looks like a duck, walks like a duck, quacks.....


David Walsh wrote:
Dear Mr. 5-BG

The anonymous nature of your post, places it in the "Blow and Bluster"
category. Wake me up then the investigation is concluded, the damage
is understood, and the corrective actions identified.

David Walsh
SSA member



5-BG wrote:
The most recent note to members from the board answers some questions
but raises many more.

there seem to be two operative theories being investigated:
1. incompetence then panic resulted in the cfo and the ED knowingly
conspiring to withhold information and to actually present false
reports. Non payment of obligations was due to a shortfall in available
cash and they incompetently choose to hide the situation rather than to
cut costs.
2. The money was misappropriated (stolen) and disappeared into someones
pocket. This was covered up for years by falsifying financials.

the note states "

Your first letter reported that the CFAO claimed his reason for making a
unilateral decision not to pay withholding taxes was because of "...a
lack of available cash on hand..." Does the Executive Committee believe
this?

No. This is why a thorough investigation is underway. "

I guess the board feels #2 is the way things are headed.



We have yet to hear about the status of funds that are sequestered in
restricted and unrestricted special accounts for the purpose of
furthering special programs. These accounts are not consolidated in the
general financial reporting. The first note suggested that these
accounts could be a source of emergency funding to pay back taxes.

the note goes on"

SSA Bylaws require a yearly audit. When was this last accomplished?

Our accountants accomplished the last audit on October 31, 2002.

Why has an audit (or outside financial review) not been done since 2002?

The SSA hired its first CFAO during 2002. In retrospect, this may have
led to a false sense of security on the part of the Board. Over the
ensuing years, the Board decided not to spend funds on audits, instead
allocating money on other tasks felt necessary to grow the Society. In
retrospect, this was obviously "penny wise, and pound foolish." A full
audit by an outside party is planned. "



The board has now public stated that it acted in direct violation of
the formal bylaws of the organization. To the extent that the board
willfully and knowingly took an action that was outside the bounds of
its authority, it is probably liable for damages on a personal level.

Organizations often have insurance policies to protect
shareholders/members from illegal acts by officers/boards. I wonder if
SSA has such coverage? Of course, the insurance company would, after
paying, go after the deep pockets of any involved.

Likewise, the accountants probably have E&O insurance.



OK here is the point... The SSA needs to file for bankruptcy and to be
reorganized. A master needs to be appointed by the court to investigate
and to vigorously pursue any and all avenues to recapture the lost funds
if in fact they were stolen and if in fact that theft was facilitated by
an illegal action by the board. To have the board oversee the
investigation is a basic conflict of interest and may result in one
avenue of recourse being ignored. I simply cannot see the board voting
to sue itself individually or as a group.

it is a shame that the decision, taken in 2003, not to have an audit
as required by the bylaws, is going to come back to haunt those who made
the decision.



we have already seen what happens when the fox is left to guard the
henhouse..

Embezzlement? Quack? Sorry, but I'm not buying that...yet.

My great-great-great grandpa started a company in 1861 that is still
family owned (spreading thinner and thinner) and recently had over a
million embezzled...the CFO did it, Price Waterhouse verified he was
the lone bandit, and he's fled several jurisdictions, filed for "stress
disability." So it will be tied up in court (by lawyers no doubt) for
years...and the "recovery" will probably amount to pennies on the
dollar (for $1M, that would equate to at least $100k...). That's about
what Price Waterhouse charged for the investigation...but it proved
that the president, the CEO and nobody else needed to be hanged from
the short hairs.

Since it's a familly business, it MIGHT be chiseling out of my
daughters' college fund...am I mad? Yup. Do I want the lynch mob? Yup.
Do I expect to get it back? Nope.

In SSA's case, I don't see that the investigative process has been
completed...YET. Let's calm down, ask our VOLUNTEER directors to try
and put the candle back, well, as much as can be done...and THEN figure
out (collectively) how we want SSA to proceed. The independent audit
needs to proceed, and WE need to give it some time. Kudos to the BoD &
volunteers for making it public (well...sort of)...nevermind the
timing.

On the other hand...SSA's "cousin," the Social Security Administration
(SSA...coincidence???) is tetering on what some say is bankruptcy...
So IF there is a bankruptcy...I'd like to suggest a name change AWAY
from another organization that might have us "guilty by association..."
(pun intended) judgement. SFA (Soaring Federation of America)? AGA
(American Gliding Association...sorry BGA...who was there first, so to
speak)? TRW (Thermals, Ridge and Wave...oops, that's already been
taken...but then TRW got bought out by Northrop[Grumman])... I'm still
not sure that becoming EAA's or AOPA's unwanted step-child is the right
answer, either...and I feel those discussions are extremely
premature...be careful what you ask for...

I agree...let's be careful how we attribute malice where ignorance can
be the culprit. I suspect some of the VOLUNTEER directors were not as
aware of the legal requirements as we (and they) wish they had been. I
still appreciate the service I've received from my volunteer directors.

And closing, I was recently elected to the BoD of another International
Volunteer organization...and I'm shaking in my boots. So another
"thank you" to SSA for teaching me valuable lessons.

-Pete
#309

RIGHT ON, IT SEEMS TO ME.

309 wrote:

Embezzlement? Quack? Sorry, but I'm not buying that...yet.

My great-great-great grandpa started a company in 1861 that is still
family owned (spreading thinner and thinner) and recently had over a
million embezzled...the CFO did it, Price Waterhouse verified he was
the lone bandit, and he's fled several jurisdictions, filed for "stress
disability." So it will be tied up in court (by lawyers no doubt) for
years...and the "recovery" will probably amount to pennies on the
dollar (for $1M, that would equate to at least $100k...). That's about
what Price Waterhouse charged for the investigation...but it proved
that the president, the CEO and nobody else needed to be hanged from
the short hairs.

Since it's a familly business, it MIGHT be chiseling out of my
daughters' college fund...am I mad? Yup. Do I want the lynch mob? Yup.
Do I expect to get it back? Nope.

In SSA's case, I don't see that the investigative process has been
completed...YET. Let's calm down, ask our VOLUNTEER directors to try
and put the candle back, well, as much as can be done...and THEN figure
out (collectively) how we want SSA to proceed. The independent audit
needs to proceed, and WE need to give it some time. Kudos to the BoD &
volunteers for making it public (well...sort of)...nevermind the
timing.

On the other hand...SSA's "cousin," the Social Security Administration
(SSA...coincidence???) is tetering on what some say is bankruptcy...
So IF there is a bankruptcy...I'd like to suggest a name change AWAY
from another organization that might have us "guilty by association..."
(pun intended) judgement. SFA (Soaring Federation of America)? AGA
(American Gliding Association...sorry BGA...who was there first, so to
speak)? TRW (Thermals, Ridge and Wave...oops, that's already been
taken...but then TRW got bought out by Northrop[Grumman])... I'm still
not sure that becoming EAA's or AOPA's unwanted step-child is the right
answer, either...and I feel those discussions are extremely
premature...be careful what you ask for...

I agree...let's be careful how we attribute malice where ignorance can
be the culprit. I suspect some of the VOLUNTEER directors were not as
aware of the legal requirements as we (and they) wish they had been. I
still appreciate the service I've received from my volunteer directors.

And closing, I was recently elected to the BoD of another International
Volunteer organization...and I'm shaking in my boots. So another
"thank you" to SSA for teaching me valuable lessons.

-Pete
#309

Bad link.


At 13:06 10 September 2006, Skysoar wrote:

Mike Schumann wrote:
When you have an organization of this size, the back
office is a real
problem. The group is too large to run with volunteers,
but barely big
enough where professional management is efficient
and affordable.

That is the advantage of becoming affiliated with
a larger organization,
whether it is the EAA, AOPA or someone else. It provides
an opportunity to
leverage the existing professional back office infrastructure
of that
organization, so that the SSA volunteers can focus
on what they love:
soaring.

It may be that what the SSA needs is professional management,
but I
would submit that the mangaement not be under the EAA
or AOPA umbrella
(umbrellas don't protect you in ill winds). I'd bet
most people have
never heard of an association management company (AMC).
The AMC model
of association management may be just what an association
of SSA's size
and type of governance needs. You have economies of
scale on your side
with an AMC. For more info on AMCs: www.iaamc.org.

Bad link.


At 13:06 10 September 2006, Skysoar wrote:

Mike Schumann wrote:
When you have an organization of this size, the back
office is a real
problem. The group is too large to run with volunteers,
but barely big
enough where professional management is efficient
and affordable.

That is the advantage of becoming affiliated with
a larger organization,
whether it is the EAA, AOPA or someone else. It provides
an opportunity to
leverage the existing professional back office infrastructure
of that
organization, so that the SSA volunteers can focus
on what they love:
soaring.

It may be that what the SSA needs is professional management,
but I
would submit that the mangaement not be under the EAA
or AOPA umbrella
(umbrellas don't protect you in ill winds). I'd bet
most people have
never heard of an association management company (AMC).
The AMC model
of association management may be just what an association
of SSA's size
and type of governance needs. You have economies of
scale on your side
with an AMC. For more info on AMCs: www.iaamc.org.