The financial situation at the Anna Maria Island Community Center is grim, but executive director Dawn Stiles and the center’s board of directors are taking dead aim at reversing the situation.
An independent review of the center’s finances for 2011-13 was performed by Terri Davis of Key Konnections at the request of The Islander. Davis is a professional consultant to nonprofit companies.
Davis, who attended the June 4 meeting called by the center to announce the financial crisis, came forward to help the newspaper and the center verify the financial shortfalls.
Davis found the center lost $666,120 during those three years. The worst financial year was 2011, the report said, when the center lost $413,176.
“These are substantial losses and it means that each year they began with a loss,” Davis said in her report.
“The largest expense, which needs to be addressed, is the payroll. There was an increase of $8,464 from 2011 to 2012 in wages,” according to Davis. For the fiscal year 2012-13, the center’s total cost of wages, including benefits, was $519,089.
Additionally, donations for 2012-13 were down $63,129 from the previous year. The center’s revenue loss that year was $80,254. “This was known when planning the 2013 budget and should have been factored in,” Davis reported.
The Affaire to Remember, since renamed the Island Affaire, lost $56,795 in 2013. Revenue figures for the 2014 Island Affaire were not included in the Davis audit.
Davis concluded that “most of the fundraisers were not successful as explained in the revenue section, so their expenses were higher.”
Davis said the center should make adjustments after the fundraising failures, and she asked what changes or cuts were implemented.
Additionally, the center should have a forensic audit of its books done at least once every three years, the report said.
“This costs money,” Davis said in her report, but it is extensive. The forensic accountants “physically work out of the organization reviewing everything piece by piece. There is nothing that I have seen that shows one of these audits has been done.”
While the independent review of several years of financial statements revealed a plethora of bad news, Stiles said the realistic look at the center’s financial position is needed.
She and the board of directors have begun steps to improve the financial picture. Stiles is preparing a 2014-15 budget based on the audit — a realistic view of the center’s finances, she said.
“Actually, there have been losses since 2000. I was not aware of the losses when I came to the center” in April 2013, she said. “But the budget I’m preparing is realistic and balanced. It should be ready by July 1,” Stiles said.
The center’s fiscal year is from July 1 to June 30. Although the 2014-15 budget will be a few weeks late, it’s been revised to “realistically reflect our situation,” she said.
On June 4, Stiles and board president Scott Rudacille held a meeting on center finances. Stiles told the estimated 200 people at the meeting that the center had only enough money in its operating accounts to “keep the doors open” for about a month.
That brought in a flood of donations, and prompted Rudacille to say the board would begin planning its fundraising effort for 2014-15. Additionally, former donors were to be contacted and asked for help.
Following the June 4 “Save our Center” meeting, an anonymous donor established a challenge, offering to match donations to the center up to $50,000. The initial response to the donor challenge has been very good, Stiles said, but a lot of work remains.
Stiles has been charged by the board to reduce expenses for 2014-15 by $50,000-$100,000.
“We have a plan in place that will be presented in the next two weeks,” she said. “The center is moving forward and addressing our issues directly with the new budget” and the board taking on greater responsibility for fundraising.
One change that will reduce expenses is the recent resignation of assistant executive director Scott Dell. The vacancy will not be filled, Stiles said.