The Audit, the board, the by-laws

There is still some confusion on the subject of the
audit, or lack thereof, and the board. The answer
given by the Excom to the members in their first statement
was not correct. That is 'the board decided .....'.
Then the attempted clarification was also not clear.
So let me state it very clearly for all.

The SSA Board of Directors never, I repeat never, discussed
the issue of 'not doing an audit'. The SSA Board of
Directors never, I repeat never, decided (or voted
on the option) of 'not doing an audit'. I hope that
is clear for all.

So what happened? The Board simply did not think about
nor discuss an audit after 2003. Stupid? Yes! Deliberately
breaking the by-laws? No! Thus, the statement from
the excom concerning 'omission versus comission'.

Does the above excuse the Board's lack of oversight
in not assuring that the by-laws were being followed
i.e. that an audit was taking place every year. No.
But it was an oversight by the Board. Nothing more,
nothing less.

Those are the facts.

Frank Reid

Frank Reid wrote:
There is still some confusion on the subject of the
audit, or lack thereof, and the board. The answer
given by the Excom to the members in their first statement
was not correct. That is 'the board decided .....'.
Then the attempted clarification was also not clear.
So let me state it very clearly for all.

The SSA Board of Directors never, I repeat never, discussed
the issue of 'not doing an audit'. The SSA Board of
Directors never, I repeat never, decided (or voted
on the option) of 'not doing an audit'. I hope that
is clear for all.

So what happened? The Board simply did not think about
nor discuss an audit after 2003. Stupid? Yes! Deliberately
breaking the by-laws? No! Thus, the statement from
the excom concerning 'omission versus comission'.

Does the above excuse the Board's lack of oversight
in not assuring that the by-laws were being followed
i.e. that an audit was taking place every year. No.
But it was an oversight by the Board. Nothing more,
nothing less.

Those are the facts.

Frank Reid
What's an Excom?

Frank,
You are 100% correct. But I would counter with "coulda, shoulda,
wouldve"! This is one of those "dead right" scenarios. For instance,
"He/she never wouldve run out of gas", or "he/she never wouldve run
into that mountain", he/she was an excellent pilot/board member. Yep,
right, now let's look at all the facts.

Companies select supposed high level individuals to make sure all these
bases are covered, and ask the devils advocate questions. And when they
don't, and time goes by and a problem raises it's head, well I guess
that's where the "jury of our peers" will take over, and they will
decide if it was just an "oversight". All the fancy, technical, "the
minutes will show" stuff is out the window.

It's who's sitting in the jury box, and how they feel about people who
make mistakes with other peoples lives, money and family. Serious, but
interesting stuff, the kind of stuff that dad expressed with "don't do
anything that you don't want to have to explain".

"Nothing more, nothing less".

Cheers,
snoop

wrote:

What's an Excom?

Executive committee.....

Frank Reid wrote:
There is still some confusion on the subject of the
audit, or lack thereof, and the board. The answer
given by the Excom to the members in their first statement
was not correct. Then the attempted clarification was also not clear.
So let me state it very clearly for all.

Frank, here we go again.There has been endless speculation on R.A.S.
about what the EXCOM did and what their motivation was, criminal
intent, etc. etc..How do you know exactly what the boards motivation
was?


The SSA Board of Directors never, I repeat never, discussed
the issue of 'not doing an audit'. The SSA Board of
Directors never, I repeat never, decided (or voted
on the option) of 'not doing an audit'. I hope that
is clear for all.

Here again, how do you know why they chose to ignore the bylaws.If you
look at the Excom update dated 9-7-06 you cant help but notice that the
ED was well aware of the fact that payroll taxes had not been paid for
3 years.Tell us Frank, what was his motivation?
I have been communicating with my regional director who has informed me
that he is assembling a committee (The members of which have not been
involved with the SSA during the past two scandals) to investigate what
happened.With all due respect Frank, you might want to save your
speculation until this committee's investigation is complete.

So what happened? The Board simply did not think about
nor discuss an audit after 2003. Stupid? Yes! Deliberately
breaking the by-laws? No! Thus, the statement from
the excom concerning 'omission versus comission'.

More speculation here.Lets wait until the investigation is complete.

Does the above excuse the Board's lack of oversight
in not assuring that the by-laws were being followed
i.e. that an audit was taking place every year. No.
But it was an oversight by the Board. Nothing more,
nothing less.

"The hatch just blew"

Those are the facts.

Frank Reid

snoop wrote:
Frank,
You are 100% correct. But I would counter with "coulda, shoulda,
wouldve"! This is one of those "dead right" scenarios. For instance,
"He/she never wouldve run out of gas", or "he/she never wouldve run
into that mountain", he/she was an excellent pilot/board member. Yep,
right, now let's look at all the facts.


Snoop,

I do not understand your comments at all. In my comments I said the
board did "run out of gas", and "did run into that mountain". I simply
pointed out that they did not deliberately do so by voting to "run out
of gas" and by voting to "ignore the by-laws. Additionally I made no
comment whatsoever about any board members being an excellent
pilots/board members.

Are you suggesting that those who rune out of gas do so deliberately?
That they conspire to run into the mountain?

Companies select supposed high level individuals to make sure all these
bases are covered, and ask the devils advocate questions. And when they
don't, and time goes by and a problem raises it's head, well I guess
that's where the "jury of our peers" will take over, and they will
decide if it was just an "oversight". All the fancy, technical, "the
minutes will show" stuff is out the window.

You, the SSA members select the board members.

To suggest that the volunteer SSA Board members did anything other than
make an honest error (be it a stupid one) is to imply some type of
conspiracy theory. I know the vast majority of the board members and
all of the current excom members. While I have certainly had my
disagreements with some of them I believe it is absolutely absurd to
think that any one of them or any group of them has anything other than
the best interests of the SSA in their decisions on the board. I take
great offense with your statement "... they will decide if it was just
an oversight".


It's who's sitting in the jury box, and how they feel about people who
make mistakes with other peoples lives, money and family. Serious, but
interesting stuff, the kind of stuff that dad expressed with "don't do
anything that you don't want to have to explain".

As for judging what the penality should be for a mistake by the board,
I was not discussing that issue at all. It is something you decided to
throw into the mix. Certainly there are situations where an simple
mistake has some bad legal consequences. I hope that no member of the
board due to an honest mistake has to experience that. I also hope
that none of you here on the ras have to experinece that from making
veiled accusations as to the integrety, honesty and the intentions of
the members of the SSA Board.

You would indeed be wise to adhear to your dad's advise, "don't do (or
say) anything that you don't want to have to explain".

Regards,

Frank Reid


"Nothing more, nothing less".

Cheers,
snoop

alice wrote:
Frank, here we go again.There has been endless speculation on R.A.S.
about what the EXCOM did and what their motivation was, criminal
intent, etc. etc..How do you know exactly what the boards motivation
was?

I have made no speculation about what the excom did nor what their
motivation was. Nor have I made any comments as to what the boards
motivation was.

I have on the other hand read all the board minutes from 2002 foreward
and there is no mention at all about an audit, much less some sort of
vote or discussion. I have also corresponded with many of the board
members and to the entire current excom.
Each and every one agrees. There was no vote, no discussion, and no
decision of any kind about an audit.


The SSA Board of Directors never, I repeat never, discussed
the issue of 'not doing an audit'. The SSA Board of
Directors never, I repeat never, decided (or voted
on the option) of 'not doing an audit'. I hope that
is clear for all.

Here again, how do you know why they chose to ignore the bylaws.

This sentence is what is known as begging the question. You apparently
cannot accept that the board did not make a decision on the audit. So
I will say it again. The board did not make a decision of any kind
about the audit and therefore, in no way did "they chose to ignore the
bylaws". If you insist on making that statement the premise of your
comments then you have already declared them guilty of some "big bad
conspiracy". Is that what you really mean to do?

If you
look at the Excom update dated 9-7-06 you cant help but notice that the
ED was well aware of the fact that payroll taxes had not been paid for
3 years.Tell us Frank, what was his motivation?

As above I have made no comment as to the motivation(s) of anyone. I
have been addressing the volunteer SSA Board members and nowhere have I
even mentioned the paid staff including the ED and the CFAO. So tell
me Alice, do you have trouble sticking to a topic or did you just throw
this in as "smoke"?


I have been communicating with my regional director who has informed me
that he is assembling a committee (The members of which have not been
involved with the SSA during the past two scandals) to investigate what
happened.With all due respect Frank, you might want to save your
speculation until this committee's investigation is complete.

With all due respect, Alice, I have made no speculation. I have told
you facts that you have decided are speculation. However, since you
want to call my comments speculation please tell us all what you know
that makes what I have said speculation instead of fact.

Additionally, what would you call someone who, before this grand
investigation has concluded, has accused the Board of Directors of the
following: "they chose to ignore the bylaws"? And before you answer
make sure you know the definition of the word "chose". It is the past
tense of "choose - to select freely and after consideration, to decide
on esp. by vote". Are you sure you want to accuse the SSA Board of
Directors of this action? Or is it just possible that you have been
speculating just a little on your own?

Indeed, your "hatch may just blow" if you continue to accuse the Board
without absolute proof of your acccusations.

Regards,

Frank Reid



So what happened? The Board simply did not think about
nor discuss an audit after 2003. Stupid? Yes! Deliberately
breaking the by-laws? No! Thus, the statement from
the excom concerning 'omission versus comission'.

More speculation here.Lets wait until the investigation is complete.

Does the above excuse the Board's lack of oversight
in not assuring that the by-laws were being followed
i.e. that an audit was taking place every year. No.
But it was an oversight by the Board. Nothing more,
nothing less.

"The hatch just blew"

Those are the facts.

Frank Reid

A direct quote from 9/7 note to members from board "
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 direct quote from 9/8 update "

Did the Board decide not to do audits?

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. "



How can the board "DECIDE" not to spend funds without discussion. ???

the second note IMPLIES that a decision was taken at the 2003 meeting and then carried forward without further discussion into following years.



I have been a member of several boards of rather large companies, some as an inside member due to my equity position and on some as an outside director. IN THE REAL WORLD, many decisions are taken upon recommendation of the specific sub comittee ( on maters of executive compensation and options for example) WITHOUT DISCUSSION. There are currently several hundred very large companies ( and their boards) under fire for questionable and sometimes downright illigal option pricing plans. The companies are in trouble, the management is in trouble and the boards are in serious legal trouble. No where in the minutes will you find a discussion of backdating stock options and a board discussion of the legality of it. Class action lawsuits are flying and the boards are named individually.

The MINUTES of board meetings are normally transcribed and edited. The real power edits the minutes and then passes around drafts to the members for comment. During the following meeting the normal first order of business is to approve the minutes of the last meeting which may or may NOT represent all that was discussed.

then there is the issue of executive sessions. As a significant shareholder/director and inside board member, I demand to be included in any executive session. it is not uncommon to be EXCLUDED from executive sessions of sub board committees as an outside director.

my point is that your read of the minutes conflicts with the two statements issued. The issue was discussed at least once according to the first statement. "THE BOARD DECIDED" Does that not fit your dictionary definition??? IN FACT the first note admits that they DECIDED to forego the audit to save money. There are two parts to that. 1. their motivation was noble. 2. they made a conscious decision.



Where to from here is the real question. T

he first note says "The long answer is that our hired management failed us, and although all volunteer Directors were well meaning, they all share in the blame. The root cause of leadership's failure to uncover the problem until now was the complete absence of outside financial reviews or audits since 2002. Between 2003 and the present, the SSA has had one Chief Financial and Administrative Officer, one Executive Director, two Directors who served as Treasurers, three Directors who were Chairmen of the Board, ten Directors who served as Vice Chairmen (making up the Executive Committees) and forty-three different Directors. To varying degrees and for various reasons, we have all let the SSA membership down."

and goes on to say "

Once the Society emerges from this awful situation, our intent is to tender resignations in respect of our leadership positions, hoping that new, qualified individuals will assume these roles."

I believe that a dysfunctional system has been in place which has placed volunteer board members at risk. It seems to me as if the board became a pawn of the professional staff and that the board has acknowledged as much.

My answer to the real question is to cut the size of the board to 4. have the regional directors, all of whom are well meaning individuals who are in an unfortunate position right now, become policy advisors with a page or two dedicated in each magizine to their discussion of issues brought to the board's attention on the behalf of the members. Perhaps a review of and change to the bylaws re term of office and possible recall needs to be considered as part of the process of rebuilding.

Pilots who make a hard landing , or worse, because they did not flare properly normally do not CHOOSE to hurt themselves, their passangers and their equipment, BUT THEY ARE RESPONSIBLE.. Not choosing to do something is actually a choice NOT TO TAKE THAT ACTION.

Are we to understand that the two directors who served as treasurers and the ED were unaware that an audit was required???








"Frank Reid" wrote in message oups.com...

alice wrote:
Frank, here we go again.There has been endless speculation on R.A.S.
about what the EXCOM did and what their motivation was, criminal
intent, etc. etc..How do you know exactly what the boards motivation
was?

I have made no speculation about what the excom did nor what their
motivation was. Nor have I made any comments as to what the boards
motivation was.

I have on the other hand read all the board minutes from 2002 foreward
and there is no mention at all about an audit, much less some sort of
vote or discussion. I have also corresponded with many of the board
members and to the entire current excom.
Each and every one agrees. There was no vote, no discussion, and no
decision of any kind about an audit.


The SSA Board of Directors never, I repeat never, discussed
the issue of 'not doing an audit'. The SSA Board of
Directors never, I repeat never, decided (or voted
on the option) of 'not doing an audit'. I hope that
is clear for all.

Here again, how do you know why they chose to ignore the bylaws.

This sentence is what is known as begging the question. You apparently
cannot accept that the board did not make a decision on the audit. So
I will say it again. The board did not make a decision of any kind
about the audit and therefore, in no way did "they chose to ignore the
bylaws". If you insist on making that statement the premise of your
comments then you have already declared them guilty of some "big bad
conspiracy". Is that what you really mean to do?

If you
look at the Excom update dated 9-7-06 you cant help but notice that the
ED was well aware of the fact that payroll taxes had not been paid for
3 years.Tell us Frank, what was his motivation?

As above I have made no comment as to the motivation(s) of anyone. I
have been addressing the volunteer SSA Board members and nowhere have I
even mentioned the paid staff including the ED and the CFAO. So tell
me Alice, do you have trouble sticking to a topic or did you just throw
this in as "smoke"?


I have been communicating with my regional director who has informed me
that he is assembling a committee (The members of which have not been
involved with the SSA during the past two scandals) to investigate what
happened.With all due respect Frank, you might want to save your
speculation until this committee's investigation is complete.

With all due respect, Alice, I have made no speculation. I have told
you facts that you have decided are speculation. However, since you
want to call my comments speculation please tell us all what you know
that makes what I have said speculation instead of fact.

Additionally, what would you call someone who, before this grand
investigation has concluded, has accused the Board of Directors of the
following: "they chose to ignore the bylaws"? And before you answer
make sure you know the definition of the word "chose". It is the past
tense of "choose - to select freely and after consideration, to decide
on esp. by vote". Are you sure you want to accuse the SSA Board of
Directors of this action? Or is it just possible that you have been
speculating just a little on your own?

Indeed, your "hatch may just blow" if you continue to accuse the Board
without absolute proof of your acccusations.

Regards,

Frank Reid



So what happened? The Board simply did not think about
nor discuss an audit after 2003. Stupid? Yes! Deliberately
breaking the by-laws? No! Thus, the statement from
the excom concerning 'omission versus comission'.

More speculation here.Lets wait until the investigation is complete.

Does the above excuse the Board's lack of oversight
in not assuring that the by-laws were being followed
i.e. that an audit was taking place every year. No.
But it was an oversight by the Board. Nothing more,
nothing less.

"The hatch just blew"

Those are the facts.

Frank Reid

Frank Reid wrote:

Snoop,

I do not understand your comments at all. In my comments I said the
board did "run out of gas", and "did run into that mountain". I simply
pointed out that they did not deliberately do so by voting to "run out
of gas" and by voting to "ignore the by-laws. Additionally I made no
comment whatsoever about any board members being an excellent
pilots/board members.

Are you suggesting that those who rune out of gas do so deliberately?
That they conspire to run into the mountain?

Snoop, if I may join in? Frank, I think what Snoop meant by this is
that running out of gas suggests a lack of planning or situational
awareness.

You, the SSA members select the board members.

True, but the board picks the Executive Committee.

To suggest that the volunteer SSA Board members did anything other than
make an honest error (be it a stupid one) is to imply some type of
conspiracy theory.

There! behind the grassy knole!Just kidding.

I know the vast majority of the board members and
all of the current excom members.

Why is it that most of the people on RAS claim to know all these
people?Do you know Dennis Wright also?What was he thinking?

I also hope
that none of you here on the ras have to experinece that from making
veiled accusations as to the integrety, honesty and the intentions of
the members of the SSA Board.

Frank, To most of us on RAS or the SSA its not about accusing anyone.
Its about seeing that our dues $$$$ (And contest fees, bussiness dues,
etc.) are invested in such a maner as to further the sport.In the past
few years this has clearly not been the case.

You would indeed be wise to adhear to your dad's advise, "don't do (or
say) anything that you don't want to have to explain".

Regards,

Frank Reid


"Nothing more, nothing less".
A

Bingo! Thanks Alice for clarifying that for Frank. Stictly a white elephant scenario to address Franks, "But it was an oversight by the board" message.