Steamboat Education Fund Board moves forward
Group: Steps taken to ensure timely future tax returns
December 8, 2010
Steamboat Springs — Education Fund Board leaders said they have taken numerous steps to ensure that the nonprofit organization's annual tax returns are filed on time in future years.
Fund Board President Kristi Brown said the group has a new auditing firm and hired accountant Linda Johnson.
Brown said the volunteer board hired both positions to execute and double check accounting work, including tax returns. She said other measures taken since four years of missing tax returns were brought to the group's attention in June include amending the Fund Board's calendar to include an annual review of Internal Revenue Service Form 990, creating a finance subcommittee to work closely with the new accountant, and shifting the responsibility of checking the Fund Board's mail to its board secretary.
"I believe we've taken significant steps to ensure that nothing like this ever happens again," Brown said. "Now we have to make sure to minimize the impacts on the fund from what's already happened."
The missing tax returns from 2006, 2007, 2008 and 2009 have since been filed. However, the Fund Board, which allocates revenue from the city of Steamboat Springs' half-cent sales tax for education, learned in notices from the IRS dated Nov. 8 that it was being penalized $168,700 for not filing its tax returns on time for four consecutive years.
Brown said, according to the Fund Board's attorney, its accountant and a conversation with the IRS, it's likely the penalties will be reduced or rescinded. The Fund Board sent a letter to the IRS on Nov. 22 asking that the penalties be waived.
As a nonprofit group, the Fund Board does not pay taxes, but it is required to file an annual tax return that includes information such as revenue and contributions. Filing the group's tax returns was the responsibility of former Fund Board accountant Paul Strong. In addition to hiring a new accountant, the Fund Board has contracted the services of Bondi & Co. and is no longer working with auditing firm Catterson & Co.
Brown said members of the volunteer board, many of whom were not members in the years when the tax returns weren't filed, are working to get the situation resolved with as little impact as possible on education dollars for Routt County schools.
Of the current 11 voting members of the board, four — Jill Boyd, Roger Good, Dean Massey and Don Schwartz — didn't come on board until the 2009-10 fiscal year. Three of the 11 — Scott Berry, Ann Henderson and Teresa Wright — didn’t come on board until this year. Only one of the 11, Sue MacCarthy, has been a Fund Board member since 2006.
Separately Tuesday, the Fund Board released findings from its 2009-10 audit conducted by Bondi & Co. The audit summary essentially reports that all Steamboat Springs Education Fund Board money is properly accounted for.
"This new audit was reassuring because although we didn't suspect a mismanagement of funds, this confirms that didn't take place," Brown said.