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July 10, 2008
Tangled Finances and the Ed. Partnership's Demise
It appears that the collapse of the Education Partnership may have more to it than a drying up of revenue:
The Education Partnership, an advocacy organization backed by local businesses, went into receivership last month, in part because several contracts to produce research and reports for municipalities and school districts fell through, said Shine. He was appointed permanent receiver by the court yesterday after serving as temporary receiver since June 18. At the hearing, Shine gave an update to the judge on what he has discovered about the organization's finances.Shine said that money from different sources — including federal grants earmarked for specific programs, grants from private sources and scholarship money — apparently was mingled with the Education Partnership's operational expenses. "There were no separate escrow accounts," Shine said.
The "mingled" finances may or may not have been the underlying sickness that led to the Partnership's demise, but it certainly would have been in the best interests of those counting on the group, especially scholarship recipients, had the money set aside for their benefit been, well, set aside. A failure to receive "contracts to produce research and reports for municipalities and school districts" shouldn't have affected dedicated revenue streams, although it would be interesting to know the story behind the loss of those contracts.
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I was unaware of this organization until the story broke.It sounds like the stuff indictments are made of.
Posted by: joe bernstein at July 10, 2008 10:49 AMAs a former CFO in companies which had federal government grants, we had a requirement to track separately and then periodically report expenses incurred on the project receiving the grant. This meant the accounting department had to structure the account codes to allow for such tracking and reporting.
It sounds like the EP's federal grants and scholarship funds required such accounting. Based on the article, we don't know the nature of the grants from private sources. If they were restricted funds, similar tracking and reporting would have likely been required. If they were unrestricted awards, then there would be less-to-no such requirements, as determined by the awarding entity.
The CEO, CFO and/or grant recipient at my company also had to sign periodic documents to the federal government representing that the funds were used as declared and not for other purposes.
I would be surprised if such documents weren't signed as a matter of course at the EP.
Sounds like some foresenic accounting work will be part of Shine's work.
Posted by: Donald B. Hawthorne at July 10, 2008 11:14 AMPutting aside the fact that there was sloppy book-keeping / mismanagement, the bottom line is that if they lost the cash flow from cities and towns procuring their services, they still would have gone belly-up (albeit, sooner than later if they were using funds earmarked for, say, scholarships to pay operating expenses, in the misguided hope that they could right the ship and live to fight another day).
Unfortunately, they don't have the luxury of the NEA to impose dues on people.
Perhaps cities & towns preferred the quiet old days when organizations like the Education Partnership didn't exist, and therefore no one was there to expose what the Union contracts were doing to the Taxpayers and the Education system.
Oh well. They may be gone, but their good work will not be forgotten, much to the NEA's dissapointment.
Posted by: George Elbow at July 10, 2008 8:56 PM