By Niki Hope, published in The Record, Wednesday, October 15, 2008
A Voice New Westminster board of education candidate says the school district's business company didn't actually make the $36,000 profit last year that's been reported, and it should have been clarified in the company's financial statements.
The district's profit appeared larger than it was last year because the district gained back money it had lost the previous year, said Jim Goring.
"(The business company) is still the same break-even company that it was. To say that we may have turned a corner this year - we're still not there, and whether or not we can remains to be seen," Goring said.
After reviewing the statements with a friend, who's a chartered accountant and business analyst, Goring said they determined that a bad debt expense in 2007 was conservatively estimated at a higher cost than it actually was and the money was recovered in 2008. That, along with refunded insurance costs, make the company's gains appear larger than they actually were.
According to Goring, in 2006/07 the district's 2006/07 loss of $30,216 is actually a profit of $1,914, making the 2007/08 profit not $36,000 but only $4,519.
The financial statements provide the wrong impression, said Goring.
Goring acknowledged the amount of time trustee Brent Atkinson, who is CEO of the business company which oversees a school in China, has put into the endeavour. He conceded that in the last two years - under Atkinson's guidance - the company hasn't lost money.
The business company has required working capital from the school district, and this shows that it is not able to stand on its own, Goring wrote in a release he gave The Record.
"I think the public needs to understand the real numbers," said Goring, who was announced as a Voice candidate last month.
Voice members call their group an "electors'group" and not a political organization, yet many of the members share the same perspective on city and school district matters.
The business company has long been under scrutiny from a number of Voice members, and some unaffiliated parents, who say it pulls money and time out of local schools. The for-profit company oversees the Wenzhou Offshore School in China and offers English as a second language programs abroad.
The district has invested $1 million into the company - the only one of its kind in the province.
Spurred on by the economic success of international education, the district launched the company after B.C. Liberal-introduced legislation allowed school districts to go into business.
Atkinson, who co-owns a successful chain of insurance companies, has narrowed the business company's focus and cut spending since he took over the operation.
Responding to Goring's claims, Atkinson said the business company's financial statements follow the auditor's standard of practice, and he has no say on how they should be done.
Atkinsons wanted the financial statements to reflect that the company broke even in 2006/07, but the auditors said they wouldn't make the adjustment because there was still an outstanding bill. At the time, he was mad because he thought the company had broken even, he said.
When Goring raised the issue at the Oct. 8 board of education meeting, Atkinson said he had a lengthy discussion with the auditor about the financial statements and was told that they had to perform the audit as it was presented, with the $36,000 profit shown last year and a loss shown the previous year.
"In terms of the business company, they're the ones who have to sign off as auditors," he said.
"I'm just telling you what happened. I'm not saying I agree or disagree with how it should be done."
Atkinson told The Record that he stands by the audited financial statements.
"If he (Goring) doesn't agree with them, maybe he should take up accounting," he said.
He also noted Goring asked at the business company's annual general meeting what it would cost for the business company to shut down.
"I think I pointed out to him that I've seen probably thousands of financial statements in my business career, and I've never seen one that had anything to do with the wind-up costs of a company," he said.
If Goring disagrees with the audited financial statements, Atkinson said he should talk to the auditors at Grant Thornton.
Atkinson noted that Goring is running as a school trustee and suggested he's looking for a political issue that will get his name in the paper.
"Why does he call a reporter, and you know what the answer to that is: it's election time.
"And so Voice and other people are interested ... in getting their name printed in the paper.
"(They) come up with what I would consider partial red-herrings like this, trying to build some sort of profile.
"But I wish they'd endeavour to build a positive profile instead of a negative profile," he said.
He also noted that Goring himself pointed out at the business company's general meeting that revenue had doubled in the last year.
"Even though he wishes to be negative about the modest return, and maybe he's somewhat disappointed or embarrassed by the company being in the black instead of in the red, which would give him more of a campaign platform, I suppose, the fact is the company is in the black," Atkinson said.
"The business company's broken even for the last two years, and it's trending in the right direction, and I perceive that to be positive."
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2 comments:
Long-time school trustee, Brent Atkinson, CEO of the school district business company is right: it is election time. That means that it is time for incumbents to be accountable for their actions and decisions in office. It is not a time to belittle those who expect and ask for accountability whether they are a candidate for trustee, or not.
From the very beginning, trustees Ewen and Atkinson, with district secretary-treasurer Doug Wong, and the "retired" Mr. Pacey, were the directors responsible for the performance and operation of the district business company.
One million dollars of public education money has been used to finance this albatross of a company and after six, going on seven years, despite a questionable report of a business company profit of $36,000 for the first time in its history, not even one penny of that business company profit has been returned to the school district, and supposedly, that is what the company is supposed to do.
This makes no sense at all, and it does nothing to instill confidence that either repayment of the $1 million dollar loan, or the prospect of dividends from the company, will ever be realized as a benefit to the school district.
Looking into "winding down" costs is an idea that has my vote.
Let me get this straight: start a company with a $1 million interest free loan and no repayment schedule, no dividends are paid out and after over 6 years in business, negligible profit. It’s embarrassing, that’s why they don’t want to talk about it.
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