SBA financial report ‘inflated’: auditors

SBA members to vote on recommendations at special July 9 meeting

A case of “wishful thinking” has the Sidney Business Association’s financial statements looking inflated.

“Basically where we are now, looking at their most recent statements which were May, many of those should not have been receivables as such. It was wishful thinking basically,” said Richard Talbot of Talbot Consultants, an SBA member on the audit committee reviewing the association’s 2011 financials.

SBA members, concerned about a lack of information in the statements, asked for a review starting in May. A special general meeting for members has been called for July 9 to discuss the audit committee’s findings.

Among those findings, said Angus Matthews, executive director of the Shaw Ocean Discovery Centre (an SBA member) is little marketing was done to bring visitors to tourists.

“The declared objective of the organization is to bring more footsteps to Beacon Avenue,” he said, adding the summer market, which is run by the SBA, is one of the town’s bigger tourist draws.

“In fairness it’s a small organization …[but] it was rather alarming to us that over $100,000 was spent on administration costs.”

At the July 9 meeting, members will discuss the three-person audit committee’s recommendations.

“Our recommendation was to apply common sense and sound business practices and end wishful thinking,” Talbot said. “Obviously that’s going to make the finances look shakier – a deficit really.”

According to the committee, made up of Talbot, Matthews and Jane Powell, owner of Buddies Toys, receivables were four times higher in 2011 than 2010, at $20,145. They were just over $5,000 the year before.

Matthews writes in his summary: “$10,631 was billed out in December, accounting for half of the receivables and significantly inflating the assets just prior to year end.”

“Every board wants to make [the finances] look good to the membership,” Talbot said. “Like Enron, you’re better off to tell them the truth of the situation. Don’t try to pull the wool over their eyes because you’ll get caught.”

 

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SBA finances under the microscope

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