We believe that fundraising was not done to it’s full potential thereby putting the cats in jeopardy and the shelter at financial future risk.

The sponsorship program has deteriorated, the corporate sponsorship was terminated, and volunteers who ran fundraisers are no longer allowed to do so. This has resulted in less income for the shelter. The Executive Director and the Board of Directors are directly responsible for fundraising. The donors of the Hermitage were told the Executive Director was hired specifically to raise funds.

I went to the Hermitage last month, and paid for a copy of their 2008 tax return, which they finally filed on November 6 of 2009. On Part VI, Section C, Question 18, they state that they make their tax returns available on their website, but there in fact was no copy, months after they had filed. After I obtained my full copy, they then placed a summary copy of 3 pages of it on their website (go to the "News" tab, and then go to "Legal").

Keep in mind that the 2008 return is for is the year in which there were several months of "business as usual", prior to people being fired, banned, and the subsequent flight of donors. I fully expect the 2009 return to be far, far worse, but we probably won't be seeing that posted until 2012.

Also keep in mind the many statements made to the press and public by Tom Tulowitzski (then Board president, now treasurer) about the incredible job the Executive Director Mary Jo Spring was doing bringing in money, continued support from the public, letters on the website from Ms. Spring claiming record contributions for the 2008 holiday season, etc. Remember too, that this was all WELL before the general economic crash.

For 2008, the Hermitage expenses exceeded revenue by $122,975. Net assets decreased by $146,546. The total fundraising expenses were $49,660, but the total amount of contributions and grants was $62,841. Ms. Spring's ~49K salary would be a separate, additional item, under management salaries.

Veterninary services were changed from Encanto to the Humane Society, which managment rationalized as a cost-saving measure. But the amount spent is almost identical to the previous year (it looks smaller until you realize that the dental is separated out from the medial in the 2008 return, and not in the 2007). The return lists $0 for legal expenses, and yet I and two others received letters from the Hermitage attorneys the week prior to Thanksgiving of 2009. I've met their attorney in court, and I rather doubt he was working for them pro bono. The total number of employees for the year was 43 (current staff on the website number 9, so that gives you an idea of turnover).

The yearly non-public board meeting where new board members are chosen by the old members is coming up shortly. I'd say the three board members who were on the 2008 board need to explain to the newer board members just why they should be kept on the board, after analyzing this tax return. And if I were a current donor or sponsor, I'd be asking to attend that meeting.

Although a great deal has been going on behind the scences, I have had to withhold comment on the Hermitage settlement and related matters until the final legal document was filed. The settlement specifically did not include any clause preventing public disclosure; the floodgates are now open.

As part of the Hermitage's settlement with me, they agreed to pay $7,500. I hasten to add that I did not make any personal profit from the sordid situation. All the money went towards my attorney's fees, and my fine lawyer, Mike Fleischman, was worth every penny and much more.

But the Hermitage check bounced. Sky high. Now, to me, it's hard to think of anything more foolish than writing a bad check to the opposing lawyer when you're trying to settle a lawsuit; that kind of stupidity or hubris is just begging for trouble. You'd think after your bank contacts you about bad checks for thousands of dollars, you would immediately correct the problem. But no, the Hermitage notified my attorney they had written a bouncing check, and then were silent. Frankly, along about Day 5 Post-Bounce, I had visions of turning it over to Barbara LaWall's office. Only when threatened with a new lawsuit did they produce the cash.

Why would an organization that's so cleverly and efficiently run, and as prosperous as the Hermitage write a bad check? I'll let the board members answer that themselves; here's a copy of the email from Tom Tulowitzski, the former board president and current teasurer, to Taylor Heidenheim.

From: THOMAS TULOWITZKI
To: Taylor Heidenheim - Comcast
Sent: Friday, August 14, 2009 9:58 AM
Subject: Bounced check

Taylor,

I just found out that the $7,500 settlement check bounced because there were not sufficient funds at the time in the account. There is $9,320 in the account right now, and I have requested an additional $20,000 to be transferred from our money market account. This appears to be a timing thing, where at the time the check hit the bank for payment, the account was a little short. I don't want to take the chance of writing another check until the new $20,000 appears in the account (probably Monday or Tuesday), or the same thing could happen.

Can you notify Adam and explain what happened, and let him know that a replacement check will be written as soon as the new money has shown up in the account. We can hand-carry the check to Adam's office or to the other attorney's office if that works better.

I don't have visibility to our checking account balance, but I have spoken with Peggy, our rep at Alliance Bank, and she is going to get us password access to see the balance on-line. I'm not sure who is keeping a check register, if anybody, so I am working with Emily to get that figured out.

We should get you authorized to sign checks as well. Do you have a copy of the signature form that was passed out last meeting.

Tom

It's July, 2009. The most recent financial statement of any kind on the official Hermitage website is the 2007 Form 990s. In his court testimony, former Hermitage Board member Vern Alexander stated "There was $350,000 in the Hermitage account when Spring was hired, but when I left, they were down to $32,000. ... She had done no fundraising activities." When a print reporter asked the Board President if things had improved since Mr. Alexander left the Board in October 2008, Taylor Heidenheim assured him they had...and then turned down the reporter's request to see financial documents.

This is particularly interesting in light of Ms. Spring's court testimony earlier the same morning that no one had been denied access to financial records. I'm sure this open access will be news to others as well (see Hermitage Donor Files Complaint With IRS, originally posted on June 19, 2008).

In their filing their now-denied claim against me, the Hermitage claimed I was causing serious damage to their finances. You would therefore think that when they appeared before a judge to plead their case, they would have come armed with specifics: numbers, balance sheets, checking account statements, their current Form 990, demonstrations of specific dollar amounts they had lost from specific donors, or even a summary of the amount of monies lost. But they did not bring forth a single specific number on anything, zip, zero, nothing, nada. In fact, the only numbers they discussed were from this blog, and those (profit and loss statements, cash flow, statement of financial position) were from the public portion of the September Board meeting. In her testimony, Executive Director Spring stated that those numbers were accurate, but misleading. Questioned by her own attorney as to how this could be, she stated that money was coming in and going out every day. I'm sure that upon hearing that blinding logic, the boards of banks all over the country are going to stop sending out monthly statements.

Ms. Spring, Mr. Heidenheim, here's your opportunity to clear the air. I agree with you that a summary covering a longer period of time would be a better representation of the Hermitage's overall financial situation than a monthly summary. You already have a spot on your website where you publish your Form 990s; it's just that it doesn't report what happened to any money after December of 2007. Please, publish the Form 990's for last year, and a balance sheet for the first quarter of this year. It's the 7th month of 2009, so surely you have those documents.

The Hermitage continues to fail to make financial documents readily available to the public in a timely manner, while simultaneously soliciting more funds from that same public. It is now approaching mid-May of 2009, yet the most current financial documents available on their official website are for 2007. And you can forget about seeing any of the the board meeting minutes online ever, because that would mean the quarterly treasurer's report was easily seen.

I'm also wondering whether the Hermitage has finally managed to get it's financial act together enough to actually have an audited tax return this year. That doesn't seem to be too much to ask of an organization with a half-million dollar annual budget.

In past years, the board has required a $5,000 contribution from each board member. It would be interesting to see the Form 990, which lists all donations of $5,000 and more; I'd like to see how much the board members themselves donated to the Hermitage.

The Hermitage is required as part of its non-profit status to make available to the public certain financial records. This blog has chronicled the Hermitage's refusal to provide donors with that information. In late July, the Hermitage finally published on its website a portion of that information, the Form 990, dated July 19, 2008 and signed by Tom Tulowitzski, the Board president. The Form 990 is the tax return for non-profits.

We have now received information that the July 2008 Form 990 shown on the official Hermitage website is not accurate, and that there are subsequent tax documents regarding 2007, but not made public, regarding a real estate transaction.

By law, any member of the public has the right to this information. However, we do not wish to create a confrontation by going to the Hermitage office ourselves, and are therefore going the route of requesting any subsequent Form 990s or amended returns directly from the IRS. This takes several weeks processing time. However, if a donor or former board member or even a regular interested citizen would like to speed up this process for us by making a direct visit to the Hermitage office, that would be greatly appreciated. The Hermitage is permitted to charge 10 cents per page to cover copying costs, and absent unusual circumstances, must provide the requested documents the day of the request.