Per the California Attorney General Vanguard is operating illegally as a non profit

[MGCpimpOtimp]

2 hours ago, Richard Lesher said:

So we are all trying to figure out what all this partial information means. There is a lot of speculation that being delinquent is not a big deal. I don't disagree. 

What is a bid deal is that both their Drum Corps are gone, and millions of revenue is being pulled in by Bingo. See, Bingo never goes away. SCV or not, those bingo players are out there spending money be it at SCV or elsewhere. 

When a non profit organization fails to provide it's mission that's a big deal. When they are out of compliance with audits that escalates the importance of what would have been found in an audit. Audits are to protect the stakeholders and the public from getting dupped. 

Below is the expense break out for SCV for FY2017, 2018, 2019, and 2020. These are their IRS form 990 they filed with the IRS. 

The astronomical red flag is their accounting services expenses went to $0. Are they $0, or submitted with errors? I can't tell you. What I can tell you is they used to have bookkeeping outsourced. So this kind of stuff would never be a problem.

Now accounting services is $0?

Now they don't have audits?

Now they are out of compliance?

Bingo is still pulling in Bingo Revenue?

Now the Drum Corps are gone? 

Is it possible that they took the accounting in-house or that someone is doing it as an in-kind donation?

[Eustis]

6 hours ago, MGCpimpOtimp said:

Is it possible that they took the accounting in-house or that someone is doing it as an in-kind donation?

Sure, possible. But it looks like SCV got what they paid for: NP status delinquency, at minimum.

[IllianaLancerContra]

7 hours ago, MGCpimpOtimp said:

Is it possible that they took the accounting in-house or that someone is doing it as an in-kind donation?

Vanguard having in-house accountants/auditors would raise even more red flags.  

[scheherazadesghost]

8 hours ago, MGCpimpOtimp said:

Is it possible that they took the accounting in-house or that someone is doing it as an in-kind donation?

I think the corps has a history of this from time to time. In normal circumstances, it's probably not uncommon for board members/volunteers in a small NP to donate accounting labor sure. Without rigorous internal protocols though, it can go bonkers fast. (And I wouldn't personally trust the oversight of $15 MIL changing hands via gambling with volunteer hands, honestly. But that's just me.) With the amount of turnover at SCV, I've expressed more than once I'm concerned about the preservation of key institutional knowledge such as this.

The current and previous CFOs' profiles (despite their histories with the corps) don't indicate that they've worked in NPs as accountants prior to their hiring. NP accounting is wildly different than for-profit accounting. You don't just know this stuff, it takes time to learn it all because NPs make up a unique industry. Being on a board doesn't mean you know how to be an NP administrator. Governance and administration are different too.

'19/'20 saw a letter from the CA DOJ requesting an independent audit after they first went delinquent. That can't be done internally, from my understanding. (Or at least, I would highly un-recommend completing an required audit in-house.) Yeah, I'm reading that CPAs, who are in charge of the conducting audits for NPs, must be independent of their audit engagements.

But before the CEO leadership shift, alumni were assured that independent audits happened yearly. So where did those audits go if not to the CA DOJ that requested them (who shows they weren't received?) If bureaucratic backlog is the problem, then is there a way to request a letter from the DOJ stating that VMAPA is in the clear and that the registry is out-of-date?

[Eustis]

On 5/7/2023 at 2:19 AM, rjohn76 said:

Also have to add that bingo/gaming is still an extremely common source of funding/fundraising for nonprofits in many parts of the country.  When I look at the organizations in my area that run regular bingo games, it runs a wide gamut from church groups, the Lion's Club, and even the local 4th of July Fireworks Committee.  Assuming that all guidelines are currently being followed from the perspective of the IRS and state/local government, utilizing gaming to fund a portion of the budget shouldn't be dismissed based solely on previous transgressions.  Of course it would be great for the organization to diversify their sources of funding, but that's a larger topic that quite honestly the entire marching arts activity can work to improve upon.

Agreed. While it may be that 'gambling' in the form of bingo, scratch-offs and the like are inconsistent with the stated missions of drum corps (and even more so, churches), the fact is that it is one of the legacy forms of income for such organizations. Bingo games are, broadly speaking, reliable income, low overhead (assuming you can get a bingo hall on the cheap; otherwise the equipment isn't exorbitantly expensive), easy to start up and easy to staff. Bingo is and has been the 'low-hanging fruit' for an np that otherwise can't be self-sustaining from its' core operations. Bingo traditionally and IMHO doesn't have quite the stigma of more high stakes gambling like slots and table games where the odds simply favor the house. Competition is minimal except in areas where casinos and arcades have been established. Bingo by its' nature can be susceptible to unethical acts though, if there is lots of cash flowing which can be siphoned off by less than scrupulous staff before it hits the books. That is, unless all cash (or credit) is collected and paid out centrally (at the door), and play is conducted only with scrip, chits or tokens. So in other words it's possible to make the games a bit more 'honest'.

Edited May 8, 2023 by Eustis

[Eustis]

3 minutes ago, scheherazadesghost said:

But before the CEO leadership shift, alumni were assured that independent audits happened yearly. So where did those audits go if not to the CA DOJ that requested them (who shows they weren't received?) If bureaucratic backlog is the problem, then is there a way to request a letter from the DOJ stating that VMAPA is in the clear and that the registry is out-of-date?

It would seem that all members of the BoD would be on distribution for the results of those audits (as well as other periodic financial statements). Without alumni org representation on the BOD, such assurances would be meaningless; do they have it?

[scheherazadesghost]

27 minutes ago, Eustis said:

Bingo is and has been the 'low-hanging fruit' for an np that otherwise can't be self-sustaining from its' core operations.

Eep. But doesn't it red flag anyone else here for an organization to opt for gambling as a revenue source when they can't be self-sustaining from their core operations? So your org can't put together a solid financial or strategic plan to be self-sustaining, but here's a revenue source that requires rigorous oversight to ensure money goes where it's supposed to?

Just seems silly and a bit lazy, honestly. It's why Vanguard and BD are getting labeled as bingo operations with a drum corps side gig. That feels great as an alumna.

And don't get me wrong. The conventional revenue sources for NPs require a LOT of legwork year-round to sustain, and NP employee burnout is a industry-wide problem. But at least the work to achieve these conventions would be supported by a broader community of state and national NP leaders, respectable donors, and affinity organizations. Right now, Vanguard's out on it's own 'cause DCI and member corps don't have the same incentives or loyalty that Vanguard could find in the NP community.

But I'm just pontificating. Bingo's not going anywhere. Only the side hustle is.

21 minutes ago, Eustis said:

It would seem that all members of the BoD would be on distribution for the results of those audits (as well as other periodic financial statements). Without alumni org representation on the BOD, such assurances would be meaningless; do they have it?

I'm hesitant to speak to my attendance of alumni meetings as I've received requests to censor my thoughts on those I've posted in this very thread. But I will say that recent changes to the VAA bylaws may allow for more alumni representation in the future. Like with everything else, I'm cautiously optimistic.

Edited May 8, 2023 by scheherazadesghost
typo

[Richard Lesher]

11 hours ago, Jeff Ream said:

Somehow BD’s bingo operation runs with few if any issues ever getting out. Maybe there’s the model to emulate 

Welp, frustratingly.................

BD's operations is run by the person that fixed SCV after the bingo fraud, and then resigned under Jeff Fielder, then got picked up by BD by who was the 2018 A-Corps Corps Director from SCV and was snatched up by BD.

SO BD had got the 2018 SCV A-Corps championship director and the SCV Operations Manager who kept SCV on the straight and narrow.  

What I'm essentially saying is SCV had those folks in hand that you are now saying SCV should copy from BD. 

Edited May 8, 2023 by Richard Lesher

[Richard Lesher]

10 hours ago, MGCpimpOtimp said:

Is it possible that they took the accounting in-house or that someone is doing it as an in-kind donation?

That's exactly what more than likely happened. 

I'm also privy to additional information that I have as hearsay (but entirely believe). I can only show here definitively by their own 990 filings  that they stopped paying for accounting services entirely as reported on their 990's, and that is 100% correlated with their lack of audits, lack of compliance, and end result of losing both their Corps.  

Basically, they do not have sufficient accounting and financial information about the economic direction of the organization to make sufficiently informed operational decisions in a fiscally responsible manner. 

What really pisses me off.................

When I was there overseeing finances............. it was just me (and I did it for free), and the operations manager and we were fixing a mess to begin with.

Right here, right now SCV has on the Board a CPA who is the Board President, and has been paying a CFO position going back to 2016 to people with accounting and business credentials. 

COME ON!!!!!!!!!!!!!!!!!!!

They have been spending $250K in regards to financial accounting, reporting, and CFO and Bookkeeping expenses to keep things straight. They cut out all the outsourced services and it goes completely sideways. 

It was the OUTSOURCED stuff they needed to KEEP if anything, and stop paying a non functional CFO six figures. 

 

[Eustis]

1 hour ago, scheherazadesghost said:

So your org can't put together a solid financial or strategic plan to be self-sustaining, but here's a revenue source that requires rigorous oversight to ensure money goes where it's supposed to?

To be clear I'm not part of any organization, I'm just asking what I consider to be valid exploratory questions. Which drum corps are you referring to that do have strategic and financial plans that allow them to market their core activities as their primary source of income (vs. bingo)? Do junior drum corps, any of them, get paid sufficiently for their performances (competitive or otherwise) to be primarily funded by that source? Or primarily from corporate sponsorships? By your own admission SCV and BD do not seem to be among them, and they are among the most historically successful corps on the field.

As I seem to recall even in the days of the one of the first corporately sponsored corps, Star of Indiana, that sponsorship had virtually nothing to do with the corps' on field (core) activities. Bill Cook's business was Cook Group which was/is in medical instrumentation (think heart stent, for example). A respectable and above board business of course, but drum corps was if any thing a loss leader (financially speaking) for Mr. Cook.