3abn Vs. Il Property Tax Lawsuit, Trust Funds and Valuation of Assets-3ABN Financial Documentation Options

[Fran]

Go to http://www.revenue.state.il.us/legalinform...s/pt/pt04-1.pdf to read the full document and verify what I have posted.

The words in quotes are not my words. They are words from the 3ABN vs IL State Ptoperty Tax Lawsuit and the 2001 IRS Form 990

STATE OF ILLINOIS
DEPARTMENT OF REVENUE
OFFICE OF ADMINISTRATIVE HEARINGS
SPRINGFIELD, ILLINOIS

3 ANGELS BROADCASTING NETWORK

Vs.

THE DEPARTMENT OF REVENUE
OF THE STATE OF ILLINOIS

Page 17 # 61 Under subtitle Financial Information beginning on page 15
61. The Independent Auditor’s Reports for 2000 and 2001 state:

Dowlink equipment acquired by gift is not recorded in the financial statements. In our opinion, generally accepted accounting principles require that such donated property be recorded at its fair value at the date of receipt. It was not practicable to determine the effects of the unrecorded equipment on the financial statements.

In connection with the recording of real estate revocable trusts, the fair values of the trusts were based on internal estimates performed by the organization. We were unable to obtain sufficient evidential matter in connection with the estimates of fair value.14 ([b]Applicant’s Ex. Nos. 14,15)15

14 The financial report for 2000 contains additional concerns found by the independent auditors.

15 Applicant’s financial reports raise additional questions and concerns. For example, the unrecorded contribution
revenue related to charitable gift annuity agreements were not recorded in conformance with generally accepted
accounting principles. The “related party transactions” were acknowledged without identifying the parties. The notes
refer to “split interest agreements,” where applicant received the assets funding the trusts and applicant is to pay
certain amounts for specified periods of time to the donors. There is nothing in the record to identify the donors or
the assets. None of the trust agreements were supplied. (Applicant’s Ex. Nos. 14, 15)
Foot notes:


(The 2001 Form 990 has 5 pages of notes attached to the return.)

Page 1; Statement 2

Form 990, Part I, Line 20

Other Changes in net Assets or Fund Balances
Record Split Interest Agreements previously
unrecorded------------------------------------------------------------------- $2,451,034

Reclassification of amounts due to Other Ministries previously classified as
Temporarily Restricted-------------------------------------------------------$(14,282)

Net Unrealized Gains on Marketable Securities---------------- ---------$13.862

Total Changes in Net Assets or Fund Balance-------------------------$2,450,614

Money Received for other ministries is NEVER INCOME! It is a Liability.

It is a Liability because it is Income for someone else and is to only be held until forwarded to the other ministries. Once that is done, the Liability is cleared. These Liabilities should appear on the Balance Sheet Statement. It should not appear on the 3ABN Income/Loss Statement as it did

This is exactly what I felt would happen to donations that were sent to 3ABN for ADRA. Funds are posted incorrectly and get lost in 3ABN's funds. The other ministry has no idea a donation has been made. That $14, 282 belonged to someone else. This is the amount that maybe the audit found or the Treasurer of 3ABN found. This is why I suggest you always make your donations directly to the ministry you desire.

Does everyone understand what this means? “Other Changes in net Assets or Fund Balances” is where the auditors have made correction entries for the Balance Sheet.

It is where Tax Accountants make changes in fund balances to reflect what actually was. The above are from the final numbers submitted to the IRS Form 990 for 2001. This Form is a Non-Profit Organizations Financial Statement in the form of a Tax Return that must be filed on a yearly basis. These are audited figures. These are supposed to audited by independent auditors.

Split Interest Agreements are:

The notes refer to “split interest agreements,” where applicant received the assets funding the trusts and applicant is to pay certain amounts for specified periods of time to the donors. There is nothing in the record to identify the donors or the assets. None of the trust agreements were supplied.

These facts stated in the Lawsuit and the Form 990 clearly tell us the financial Statements are not presented accurately. How can I, as an end user, use these reports and have confidence when auditors clearly state that the most basic Generally Accepted Accounting Practices are not being followed by 3ABN.

[Stan]

So was this fraud? or an accounting error? Did they lay charges?

What is your professional opinion?

[Shiny Penny]

So was this fraud? or an accounting error? Did they lay charges?

What is your professional opinion?

Stan, you are too kind! Fran's professional opinion? Her opinion, okay.

Nevertheless your questions are fair.

[Snoopy]

And why shouldn't Stan be kind? He sure sounds like a kind person!! You are certainly entitled to your opinion, Shiny Penny, as am I. Fran obviously knows her stuff whether or not you happen to like what she has to say! Personally, I am very interested in her PROFESSIONAL opinion. Please carry on, Fran, and know you are in my prayers!!

Stan, you are too kind! Fran's professional opinion? Her opinion, okay.

Nevertheless your questions are fair.

This post has been edited by Snoopy: Mar 16 2008, 07:42 PM