The 990's

[garfield]

The Blue Knights

Revenue

Program Service Revenue

Camp Fees

2009: $27,415

2010: $0

2011: $63,748

Note: In 2010 there were listed two Revenue items not shown in '09 or '11: Membership Fees and Programs: $18,851 and Waiver Adjustments: $15,875, Total: $34,726. Because "Camp Fees" is not listed anywhere in the '10 990 line items or notes, it's possible that these numbers represent those fees.

Edited December 8, 2012 by garfield

[garfield]

The Blue Knights

Revenue

Other Revenue

Investment income was Not Meaningful, ranging from $415 in '09 to $90 in '11.

Net Gain (loss) from sales of assets other than inventory

2009: $3,665

2010: $49,324

2011: $6,903

Note: It's possible that there were new instruments in 2010 and the old ones were sold. It also could have been other equipment, but appears to have been a one-time event.

Net Income (loss) from fundraising events

2009: $70,312

2010: $0

2011: $0

Net Income from gaming activities

2009: $43,914

2010: $52,911

2011: $48,233

Miscellaneous Other Revenue

2009: $28,167 (minus Camp Fees, itemized in '10 and '11, Net: $752)

2010: $850

2011: $686

Edited December 8, 2012 by garfield

[garfield]

another of your bad jokes?

:tongue:/>/>

So, you're saying I AM the only one who didn't know?

That's entirely possible, I'm sure.

[audiodb]

Part of this confusion might have to do with varying winter program offerings. For example, it appears that BK ran one winter guard in 2009 and two in 2010. Right now, I see no winter guards listed on the BK website....perhaps Opus X became a separate organization?

[Stu]

Isn't anyone going to ask what Ascend is?

The back end of a horse? Or is that a different spelling?

[garfield]

Part of this confusion might have to do with varying winter program offerings. For example, it appears that BK ran one winter guard in 2009 and two in 2010. Right now, I see no winter guards listed on the BK website....perhaps Opus X became a separate organization?

Interesting. I would have expected that a winter program, drums or guard, would be listed in Program Service Accomplishments, yet there's nothing there.

[garfield]

The back end of a horse? Or is that a different spelling?

Or the last vehicle in a corps caravan?

:tongue:/>

[garfield]

The thrill of the hunt. Maybe I'm alone in my interest in financial reporting, and maybe it's a function of my profession, but I think trying to spot trends and crafting an explanation is a hoot. I suspect the people responsible for reporting the money for a drum corps, both the CFO and the CPA firm doing the audit and reporting, take these numbers very seriously, and do their best in all cases.

Still, BK's report of expenses is an interesting study on the data reporting decisions that are made each year. Again, we have no real answers unless, and until, BK is contacted directly but, with the presumption that everything is above-board and not nefarious, and in context with the change in cash flow each year, we can see past the vagaries of the reporting to the explain how healthy a corps may or may not be.

There are two, simple (edit: maybe not so simple), examples coming up.

Edited December 9, 2012 by garfield

[garfield]

The Blue Knights

Statement of Functional Expenses

(Note: Expenses are broken down into three, major categories: Program Service Expenses (PSE), Management & General Expenses (MGE), and Fundraising Expenses (FRE). Each line item expense is placed into one of these categories, or a Total expense can be divided by category. There are more than 30 line items printed on the 990 form, and the "Other" line item offers 5 blank lines where the corps can insert a specific expense that is not, normally listed on the IRS Form 990, like "Vehicle Expense" or "Food".)

Compensation of current officers, directors, trustees and key employees

2009: PSE: $9,917, MGE: $29,950, Total: $39,867

2010: Total: $0

2011: Total: $0

OK, so it's not reasonable to presume that they stopped paying Mark Arnold and other staff (Edit: Yes it is. See following posts), so in '10 and '11 their pay should show up somewhere else.

We're looking for something like $40,000.

Maybe it's here...

Compensation not included above, to disqualified persons (as defined...)

2009: PSE: Total: $0

2010: PSE: $7,203, MGE: $66,828, Total: $74,031

2011: PSE: Total: $0

Well, it's possible they threw Mark's salary in here in 2010, but the numbers don't gibe exactly. (And why would he be a "disqualified person"? I read the code definition, but let's leave that alone for now.) And what explains the $0 in 2011?

Here's one other line item printed on the form:

Again, we're looking for about $40,000...

Other Salaries and wages

2009: PSE: $7,000, MGE: $29,390, Total: $36,390

2010: PSE: $1,044, MGE: $9,399, Total: $10,443

2011: PSE: $3,677, MGE: $33,092, Total: $36,769

So, there's really no clue here. The totals are near $40-grand, but considering that, for instance, instructional staff wages should show up somewhere, these don't seem to gibe either.

But there's one more category, down the page in the "Other" line items, that the corps calls "Contract Service". This general name has been used in other filings to represent staff instructors so, maybe, there's a clue here.

Contract Service

2009: PSE: $133,815, MGE: $11,350, Total: $145,165

2010: PSE: $217,659, MGE: $0, Total: $217,659

2011: PSE: $245,272, MGE: $0, Total: $245,272*

*Note: In 2011 there's not an entry for "Contract Service" but there is one titled "Program Production". Obviously, the phrase "Program Production" can include lot's of things, but we'll stop there.

Did we find the missing compensation for Mark Arnold? Not sure, exactly. But, under the heading "Pay" we can, I think, make the case that totals of all these categories each year is fairly consistent. Here are the totals by year:

2009: $221,422

2010: $302,133

2011: $282,041

Further, these totals seem to match the general flow of revenue and expenses in each of these years, namely, up significantly in 2010 and down a little less in 2011.

The decisions for where to list items lay with the CFO and CPA firm and this excersize is a good example of how a casual reader could get way-layed into an incorrect conclusion. I enjoy the hunt in the numbers and, if you've followed through this post, you may as well. It's kind of like reading a book where the chapters are out of order but, in the end, the story seems to make sense. If things looked really out of line or inconsistent, I'd consider contacting those who collated the numbers.

In the case of BK's compensation to all those involved in the corps, I'm not prompted to make that call after looking at all the categories.

Now, wasn't that fun? :blink:/>/>

Edited December 9, 2012 by garfield

[traverbanking]

Sevral years ago Drum Corps World reported that Mark Arnold and his wife (who is a physician) decided that her salary was enough for the two of them to live on and that, consequently,he would no longer receive compensation for being the executive director of the Blue Knights.