[Vision2020] Chamber Squandered a Public Opportunity

Thu Oct 28 11:19:04 PDT 2004

Tom,

Thank you for posting this timely editorial.  However, the editorial appeared to 
contain at least one serious error.  Below is a letter I sent to the Daily News 
concerning the editorial.

Murf,

Thank you for your insightful editorial yesterday on the Moscow Chamber of 
Commerce.  It said part of what many of us have long thought.

I think it likely that the editorial did contain one quite misleading assertion:

"The full audit didn't materialize but a review did. The review, by an 
independent accounting firm, found nothing major enough to warrant a full 
audit."

Nowhere in the narrative of the review did the author say that a full audit was 
not necessary or desirable.  As far as I know, the only people to make that 
assertion are Janice McMillan and Paul Kimmell.  I have seen nothing that 
indicates that Hayden & Ross said that a full audit would not be desirable. 
Word in the street is that Jim Pilcher is not happy with some of the public 
representations about the review that McMillan and Kimmell have made, including 
the lack of the desirability of an audit.

In fact, a close reading of the review indicates that very little was said about 
the chamber's financial health or the quality of its financial management:

"All information included in these [revised] financial statements is the 
representation of the management of the Moscow Chamber of Commerce."

This means that none of the basic financial data used to construct the revised 
chamber financials was not closely examined for accuracy or validity.  The 
chamber's basic numbers were accepted basically without verification.

Further, the review carefully says:

"Based on our review, we are not aware of any material modifications that should 
be made to the accompanying financial statements in order for them to be in 
conformity with accounting principles generally accepted in the United States of 
America."

Combining the two statements, we are left with the slim conclusion that if the 
data is correct, then the format of the revised chamber Balance Sheet and 
Income/Activity Statements and calculations within that format are within the 
bounds of "generally accepted accounting practice."  [Major news reports of the 
last few years which have exposed the possible fraudulence that can be contained 
under "generally accepted accounting practice" certainly do not make such a 
statement very reassuring.]

Unfortunately, the review gave scant or no explanations for the many changes 
that were made.

Further, the review given out to the public did not contain any revised chamber 
foundation financials, without which a total assessment of the chamber financial 
health is not possible.

Nor did the review address the problem of why a $148K discrepancy occurred in 
the previously published financials, why net income ($75K) from revised FYE 2003 
results was subtracted from retained earnings instead of added, and how and for 
what reason were the FYE 2003 results revised.  In fact, if a I read the 
explanationless review numbers correctly, the revised FYE 2003 results (which 
show a huge $75K profit) were not used.

Nor were any revised financials for the years 2001 - 2003 presented.  All of 
these previous financials had problems and misrepresented the financial health 
of the chamber.  Without these revised financials, it is not possible to make a 
complete assessment of what has occurred financially or management-wise over the 
last four years.  [In fairness to Hayden & Ross, I do not know if such revisions 
were part of the initial review agreement; if not, they should have been.]

I do not think the Daily News has done a fair or in-depth reporting of this 
entire important matter.  I delivered long ago to Nathan documents showing the 
$148K discrepancy and The $75K retained earnings problem and the implications of 
such.

A more comprehensive analysis of the chambers financials is now underway by 
really independent persons.  It is fair to say at this point that the management 
of the chamber has exhibited egregiously inept financial knowledge and 
management.  There remains the possibility that even more sinister problems 
lurk.

I hope that in the future the Daily News will try to be more factually correct 
and balanced in their future coverage of this matter.  Such an action will 
eventually speed the recovery of the chamber and help to eventually restore at 
least some of the confidence, honor, and goodwill the chamber has lost.

Wayne

Wayne A. Fox
waf at moscow.com
PO Box 9421
Moscow, ID 83843
208 882-7975

----- Original Message ----- 
From: "Tom" <thansen at moscow.com>
To: <vision2020 at moscow.com>
Sent: Thursday, October 28, 2004 11:21 AM
Subject: [Vision2020] Chamber Squandered a Public Opportunity

| >From yesterday's (October 27, 2004) Moscow-Pullman Daily News.
|
| ----------------------------------------------------------
|
| The Moscow Chamber of Commerce is under no obligation to share its books with
| the public.
| Like any private business or organization, it is responsible to its members 
and
| no one else. For the public to demand otherwise could be an exercise in
| futility.
|
| That said, the chamber missed an excellent opportunity to be as up front as
| possible with the public and its members regarding questions about the
| chamber's finances.
|
| At issue were concerns by some chamber members that the organization was in
| financial trouble. Those concerned asked questions but got no satisfactory
| answers.
|
| They then asked the same questions in the public arena.
|
| At that point, the chamber should have taken the high road and answered all
| questions to the members' satisfaction. In so doing, the public also could 
have
| been informed.
|
| Instead, the chamber chose to keep tight-lipped until the hue and cry got too
| loud.
|
| An audit and public review were then promised.
|
| The full audit didn't materialize but a review did. The review, by an
| independent accounting firm, found nothing major enough to warrant a full
| audit.
|
| "Can we be more fiscally responsible," said Paul Kimmell, the chamber's
| executive director. "You bet."
|
| Part of that responsibility is accountability to its members and, by 
extension,
| the public.
|
| The chamber is not a public organization in a legal sense, but many of its
| functions serve the public good.
|
| Typically, a chamber of commerce is the first contact a business or family has
| with an area when they consider relocating.
|
| Chambers in many cities and towns also serve as visitors' bureaus, encouraging
| tourism and that means money spent in area businesses.
|
| Moscow's chamber is no different. It represents more than 450 business,
| organization and individual members. They all have a right to know if their
| dues are used wisely in the promotion of the businesses and the area.
|
| The chamber must remember openness breeds trust and goodwill.
|
| Right now, those are commodities the chamber sure could use.
|
|
|
|
|
|
|
|
| ---------------------------------------------
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