Director Bollerman Rejoins

Wednesday, March 30, 2011

Director Bollerman Rejoins

The following E-mail from Westhampton Free Library Director Matthew Bollerman will speak for itself.

It has, however, generated considerable comment from OtBB readers, which may evolve into a dialogue.

Dear Mr. Speir,

A recent post on your site included some comments about the Library's recent 990 filling. I wanted to answer some of the claims made.

  1. Our accountant did check a box on the 990 that says the IRS cannot discuss the return with him. In speaking to the accountant, he states that he does this so the IRS will call the client first and ask their questions. If that does not help in clearing up the matter and the ac­countant is needed to speak to the IRS they can get a power of attor­ney on our behalf. This is how the firm works with all their clients. The accountant stands behind his work.
  2. Guidestar has not listed a Friends of the Westhampton Free Library 990 since 2006. The Friends have filed to my knowledge using the new electronic short form "postcard." As they are a separate organization, I have no authority over their business.
  3. The list of contractors was filed with the IRS. It was not included on the Guide Star web site. It is included on our site with the rest of the year's 990.
  4. Our accountant interprets the issuance of the bond was done by the Suffolk County IDA, so we are not holding it. (2009 form 990, page 4, question 24). I see no mention of us claiming to have a private mortgage. We do state the outstanding indebtedness on page eleven, question 23.
  5. Our accountant includes our assets on a different schedule. GuideStar did not scan that into their database. It is included on our site with the rest of the year's 990.
  6. An amortization table is not required by the 990. We have information in our annual Audit in the notes section regarding the payback of the IDA bonds.
  7. We are not required to file a schedule K as per our accountant's interpretation of Part IV question 24.
  8. It is 100% my fault for not having the 990s on our website. I have added them this morning and do apologize for the oversight.
Should there be any other questions, please feel free to contact me by E-mail or at 631-288-3335 x. 116.

Sincerely,
Matthew Bollerman, Library Director

Thank you, Mr. Bollerman. This should provide plenty of material for others to digest.

Comments

1. Frank Wheeler said...

So what is this about?

What about res ipsa loquitur didn't you understand?
Dean

2. Dune Mind said...

Matt, we thank you for posting the 990s to the Library's website. It would be most helpful to have gone all the way back to FY'04, so that we could understand how, exactly, the Library acquired what had been the Annex lot for $711,224. Did we finance that, too? That would be news to us.

But to focus on the present: WFL's sum $11,741,142 indebtedness for the bond is our indebtedness. You are required to report it. Referring to the WFL's audits does nothing. The audits have never accounted for the actual debt either.

(Beginning with FY'08, the audits also stopped accounting for five figures' worth of fixed asset deductions for books removed from circulation each year; if the Friends of the Library have been selling those same books to raise funds for you, then you have... quite a problem.)

And a single entry in the 990's Schedule D, and one line summarizing the total value of the WFL's land, buildings and equipment in the attachments, would probably not cut the forensic audit mustard.

Beyond that, Matt, we can only wish you luck holding down the fort, and for having signed documents pertaining to the bond financing for which only the Treasurer is authorized by the WFL's own by-laws. You filed them with New York State in early 2010; they are worth reading.

OtBB's crack forensic auditing team in action!
Dean

3. EastEnd68 said...

I'm glad this matter has finally been cleared up. Thank you, Mr. Bollerman.

Well, it cleared up your question....
Dean

4. Hampton West said...

990s are a great source of information on so-called Not-for-Profits or 513c status organizations. I used it successfully with CHI (Community Housing Innovations... yes the same folks who at one time seemed to have won the contract from the County to house sex offenders). They had two properties in the old 'hood that were quite run down but I noticed on their filings there were loans given to some of the firm;s execs without the details that were required to be included. Eventually CHI sold one of the properties to a local family pretty much as a quid pro quo for me to stop asking questions about their loans.

Keep looking, "Waldo".

I wasn't kidding when I said this type of thing is w-a-a-a-y above me. But OtBB is not without resources, as WFL has found out.

But shouldn't that be "501(c)3" instead of 513c?
Dean

5. Dune Mind said...

All 501(c)s are tax-exempt organizations; there are 28 types defined by the IRS.

501(c)(3)s are "Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations." A housing advocacy organization would be a 501(c)(3). WFL is a free-standing 501(c)(3).

All 501(c)(3)s are required to complete a 990 and a Form 1023 (or 1024) annually. The 1023 is, more or less, the exam that a 501(c)(3) takes each year to prove that its functions and financial relationships qualify it to claim continuing tax exemption status. The Form requires a deeper narrative than does the 990 about the organization's activities, its definition of membership, and others who benefit from the organization; the qualifications and duties of directors, key employees, and independent contractors paid $100,000 or more; and the arrangements under which highly compensated parties are paid.

As with the 990, WFL has been reporting to the IRS that the 1023 is available on its website. Matt, this is a friendly alert; aside from posting IRS documents to WFL's website, the concerns about the Library's fiscal opacity long predate your tenure; the trusteeship's private club culture was firmly entrenched when you arrived. Your leadership in the areas for which you are directly responsible – upgrading the library's essential functions, vastly increasing resources, accessibility, and overall utility – deserves sustained applause.

Now, about that mortgage thing in the 990: under "Liabilities," Part X, page 11: line 20, there is a zero entered for "Tax-exempt bond liabilities;" and on line 23, for "Secured notes and mortgages to unrelated third parties," $7,397,820.

The Suffolk County IDA is assuredly an unrelated third party; WFL is not a subsidiary of the IDA. In fact, the WFL is so independent that its annual financial report to the Municipal Securities Rulemaking Board (see archived documents under "Continuing Disclosure"] now says on p.6 that WFL has the power to levy taxes for the bond debt, an assertion that conflicts with NYS Education Law (as well as page 9 of the original Bond Agreement).

In any case, WFL is an independent entity with substantial support from a tax-exempt bond. Whether the Schedule K is completed by WFL or by the IDA on WFL's behalf, District taxpayers should have access to it because it details how the bond is managed. It would be great if WFL would at least link to it.

Whew! There ya go.
Dean

6. Hampton West said...

Yes. I stand corrected.

7. Hampton West said...

Dune Mind:

Wow – nice job!!!!

It may seem to some like crossing Ts and doting is, but under-reporting or not reporting at all can be quite serious.

DM has been delving into the WFL situation for more than year now.
Dean

8. Dune Mind said...

Thanks so much, HW. The Library means a lot.

9. Jeanne Speir said...

Funny; my accountants have never declined to be contacted by the IRS first. It has always been their assertion, however, that their accounting was only as good as the information they were given. Garbage in, garbage out....

I understand from outside library sources that Mr.Bollerman is a very good Library administrator. So maybe this isn't about him.

However, it has been my contention from day one that this project was ridiculously over-sized; it hit our pocketbooks in 2008, a painful year where the forwardthinking planners did not miss the looming economic crisis. I read other library budgets that addressed these issues pro-actively. What people voted for, in blind trust here, was millions of dollars more expensive than was originally stated.

What's in your wallet?
A treasurer's hand, you say?

We have the right to receive a full and transparent accounting of how our money is being spent. Thanks, Dune Mind, for making this clearer.

Yes, dear... except that I do accept Director Bollerman's explanation of their accountant's protocol regarding communications with the IRS... but what do I know?
– Dean

10. Dune Mind said...

Bless you, Jeanne. There is so much more to ask about the Library's financials, and I hope that people do so. At very least, begin asking now for something other than a complete sham budget to support with a vote for FY'12.

I would submit that other Library District taxpayers need to ask some of these questions as well.
Dean

11. Jeanne Speir said...

Good grief, Dean. If you look at the budgets from year-to-year, line items don't match, are so obtuse as to be incomprehensible, do not account properly for income and expenditures, and if they were your tax records, the IRS would be all over your sorry butt!

You ask for "other Library District taxpayers to ask some of these questions" as well. That would be wonderful if we were all forensic accountants.

Can we hire one to analyze the library district financial reports? I would sleep so much easier if I didn't have to worry we were being dazzled by a shell game by the same two Village Trustees who cost us how much procrastinating in Police disciplinary hearings?

Further: do we get to vote as Library members this year on Board Officers?

No, the only WFL-related item on which Library District members "get to vote" is the budget.
Dean

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