Financial Problems

[ScotchW]

We currently have a division on our board - one side of directors that were born and raised in our county - part of the "good old boys network". The other half are directors that just moved to the county and/or became involved with our orgainzation. Up until 3 years, the financial statements consisted of a checkbook register from a computer program. They didn't know how to setup financial statements. When we received our 501 (c) 3 exemption status, our financial records were completely redone to follow the UCOA for non-profits; setup in quickbooks; Assets were setup, etc. And we finally started filing our annual 990. We worked out a deal with the IRS to get our books in line, tax filings caught up, etc., with no penalities. For 2006 & 2007, everything was good. Then in fall of 2007, the "good ole boys" directors were able to get one of their director's friends elected as Treasurer and we are back to just seeing a checkbook register. He doesn't understand what a Balance Sheet is, etc. Periodically, as Secretary, I would check the transactions in the software. WHAT A MESS! End result is income is overstated, expenses are overstated and he is still showing liabilities on the books that were paid off. When questioned, we are told to stop picking on him, that he is doing a good job. We the, other side of the board, is very concerned! We receive funds from the state and we have been awarded grants. We understand the "importance" of proper, correct financial statements for a non-profit. Two months ago, the "other side" approved having a review done on the current and previous years. The motion was approved! Now they refuse to get bids. When brought up at a meeting, we are shot down.

We don't have enough votes to change things... What should we do?

You could threaten to report it all to the IRS if they don't follow the law and your resolutions. They likely would not want that...