The following is a statement issued by Ed Mueller, PGR National President and subsequently approved by the BoD.
Respectfully,
Jeff Lockhart
National Communications Officer
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To all of our members,
As many of you are aware, allegations of misappropriation of PGR funds has been floating about for some time. The sitting BoD in 2007, which I was part of tried at that time to dig out information which could support this claim. The difficulty which we were having was that the monies in question, were going into a PayPal account, which was owned by Jason Wallin.
In late September of 2007, Jason asked to for a ConCall with the entire BoD. During that phone call, Jason admitted that not all funds which should have gone to the PGR were transferred. Instead, he did use some of that money for his own personal gain. Also during this same ConCall, Jason resigned his position from the BoD, which was accepted by the President, and also stated, that he would like to make full restitution of any funds which he personally gained. He also pointed out at that time, that he had no idea, what that amount actually was. At that point Jason was asked to leave our ConCall, and the BoD continued with our discussion. Snap, our then sitting President of the PGR realizing that he would be stepping down from his position shortly, asked that I take the lead, and continue to follow thru on this investigation.
The morning of 24 September 2007, I phoned my local office of the FBI and asked that a complaint be opened in reference to these missing funds. At that point, I wanted to clear our organization of any possible repercussions, which could occur between PGR Inc. and the IRS. I asked if they would be investigating this, and their reply to me was, if the FBI determined that an investigation would be taking place, that I would be informed. As of the writing of this report to our members, I have never received any information back from them.
The next task which needed to be accomplished, to actually audit the books of PGR, was to obtain the records from PayPal for Jason Wallin's personal account with them. Quite a few e-mails and phone calls were necessary, and a list of requirements sent to me from PayPal were needed to be completed, so these records from Jason's account could be sent to our accountant. I must add at this point, that Jason Wallin fully cooperated with any request which I made to him, and submitted the necessary documents, which PayPal required.
On Feb 7, 2008 I received an e-mail from PayPal confirming that the requested records, were sent from PayPal directly to our accountant. On Feb 20, 2008, I received a final Audit of our accountant's findings.
Finally with the numbers in hand, I phoned Jason, and sent to him, a complete copy of the audit which our accountant prepared. Jason informed me that he did not believe that the $26,520.00 indicated, was misappropriated. He then submitted to me, a list of what he considered to be Legitimate expenses which totaled $16,647.03.......Leaving him $9872.92 which is not accounted for.
The question which we were now faced with, is the $16,647.03 legitimate expenses? No one on the current BoD nor those on the BoD during 2007 can verify if any of these were approved expenses. The President of PGR at the time, and the only person who could possibly answer this question is Jeff Brown, as these expenditures all took place between Mar 2006 - Dec 2006.
On the advice of our accountant, and to correct the PGR Inc. Books, a 1099 will be issued to Jason Wallin in the amount of $26,520.00 for the year 2006. To be fair to Jason, I phoned the IRS and asked, if the expenses from Jason were legitimate, how could he handle them. I was informed that Jason could file a form 2106 to claim those expenses. The IRS would then either allow, or not allow, the expenses claimed by Jason.
For those members who may be asking themselves about Jason's statement that he would like to make full restitution, Jason will always have the ability to use the Donate Button on our website.
With this report, I and the BoD now considers this audit closed. I can state at this time, that the PGR Books are in order, and as our accountant has stated in his report, our process has been changed to ensure proper control.
With Respect,
Ed Mueller
National President
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Accountants Report
February 18, 2008
Mr. Ronny Awtry
Patriot Guard Riders, Inc.
Dear Ronny:
We have completed the audit of Jason Wallin, and are pleased to submit this report summarizing the results of our work.
Jason Wallin has not complied with good business practices for handling funds of the Patriot Guard Riders, Inc. The audit findings are documented below and on Attachment A. of the excel worksheet attached.
We wish to acknowledge the excellent cooperation received during the course of this audit from you and the Patriot Guard Riders, Inc.
If you have any questions or comments regarding this report, please do not hesitate to contact me.
Sincerely,
Jon Tatum
Tatum & Associates, Inc.
Table of Contents
Transmittal Letter
1. Introduction
2. Objectives of the Jason Wallin Audit
3. Audit Scope
4. Information Sources
5. Audit Findings
A. Misappropriation of Funds
6. Control Processes
7. Conclusion
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1. Introduction
Tatum & Associates, Inc was contracted by PGR, Inc. to perform a limited scope audit of Jason Wallin (“Jason Wallin”). The primary purpose of the audit was to verify allocation of PGR, Inc. funds and handling of donations and product sales revenue through the PGR, Inc PayPal account. This audit covered the period from March 1, 2006 – December 15, 2006 (the “Audit Period”). Tatum & Associates, Inc. performed this limited scope audit on December 26, 2007 at its offices in Brentwood, Tennessee.
- Objectives of the Jason Wallin Audit
- Obtain an understanding of PGR, Inc’s PayPal account.
- Document how PGR, Inc’s sales of products and donation are accumulated in the PayPal account.
- Verify the business is being managed in a controlled manner.
- Audit Scope
The scope of our audit included obtaining a better understanding of PGR, Inc’s PayPal account, its sales results, its donations, and validating the accuracy of the sales and donations being reported by Jason Wallin through the PayPal account.
4. Information Sources
During the audit, Tatum & Associates, Inc. was provided access to the books of account and supporting information to the extent is was available. In forming audit opinions, we relied upon representations from Ronny Awtry.
5. Audit Findings
A. Misappropriation of Donated Funds
During the audit period Jason Wallin used donated funds and product sales funds for personal gain. There was evidence that PGR, Inc funds were used by means of a debit card tied to the PGR, Inc’s PayPal account for purchases of a personal nature. The Audit Findings were gathered by using the e-mail receipts from PayPal. Every time a transaction was made, PayPal sent an e-mail of those transactions to the Treasurer of the PGR, Inc. We were able to use these transactions as a basis for our audit. Funds misappropriated, that were identified totaled $38,423.07. This amount included $11,903.07 of profits from Google Ads that were deposited into Jason Wallin’s personal account. Last years Board of Directors subsequently credited back to Jason Wallin the $11,903.07 in exchange for the PGR, Inc Website rights and hardware. (See Attachment
6. Control Processes
PGR, Inc has now changed the process of how the PayPal accounts are controlled. Transactions are monitored by the Treasurer and transfers are made from the PayPal accounts to the PGR, Inc. operating account by both the Treasurer and President of the PGR, Inc board. Bank accounts are reconciled monthly by Tatum & Associates, Inc to ensure proper control.
7. Conclusion
On the basis of our audit we find that Jason Wallin owes to PGR, Inc. the amount of $26,520.00. (See Attachment A.) Tatum & Associates, Inc believes it is unlikely the amount due is collectible. Tatum & Associates, Inc. recommends a Form 1099 be issued in the amount of $26,520.00 to Jason Wallin. Tatum & Associates, Inc. believes by issuing a 1099 to Jason Wallin, the PGR, Inc. is in compliance with IRS regulations concerning income to a board member and thus safeguards the 501c3 status.
Attachment A
| |
A |
B |
C |
| 1 |
|
|
|
| 2 |
|
Patriot Guard Riders, Inc |
|
| 3 |
|
Jason Wallin Audit |
|
| 4 |
|
Summary Findings |
|
| 5 |
|
Attachment A |
Total |
| 6 |
|
|
Amount |
| 7 |
Ref. |
Description |
Owed |
| 8 |
|
|
|
| 9 |
7A |
Misappropriation of Funds |
|
| 10 |
|
|
|
| 11 |
|
Total PayPal Transactions |
$86,586.89 |
| 12 |
|
Total Deposits of PayPal Receipts into Bank Acct. |
-$51,150.00 |
| 13 |
|
Total Debit/ATM Transactions Personal Use |
-$8,916.89 |
| 14 |
|
|
|
| 15 |
|
Total PayPal Receipts Unaccounted For |
$26,520.00 |
| 16 |
|
|
|
| 17 |
7B |
Google Ads Deposited into Wallin Account |
$11,903.07 |
| 18 |
|
|
|
| 19 |
|
Total Audit Findings |
$38,423.07 |
| 20 |
|
Less: Purchase of Website Rights and Hardware approved by Last years Board of Directors |
-$11,903.07 |
| 21 |
|
|
|
| 22 |
|
Total Amount Due from Jason Wallin |
$26,520.00 | |