By Maria CJ De Villa
The Filipino Centre Toronto Board (FCT BOD) has issued a press release last December 6, 2020, to air their side of this raging financial and governance controversy at the centre over the previous four years. Their attempt to clarify matters with their ‘de-pressing release’ only made matters worse as they struggled to dig themselves out of the hole they have masterfully dug. Needless to say, all their self-inflicted wounds only added more misgivings and apprehension to the Board’s ability to run the centre competently and honorably.
Let us unpack their line of reasoning point by point:
|Press Release Statements||Concerned Members’ Response|
|More than twenty years ago, a group of dedicated community leaders, professionals, retirees and volunteers founded the Filipino Centre, Toronto with the dream of having our own community centre, a common place for the Filipino-Canadians to meet and participate in social, civic, educational, business, recreational, sports and other activities. The Centre would provide a major venue to showcase, enrich and promote our Filipino culture and heritage.
The Filipino Centre Toronto should live up to the core values of integrity and corporate responsibility as envisioned by its founders. Its membership has the social responsibility to ensure that FCT’s leadership and elected officers adhere to these basic principles. And that its leaders perform their functions in adherence to its constitution, according to best practices, and in compliance with the law.
|This dream came to fruition by the determination and hard work of the founding members and the Filipino community by purchasing a building at 597 Parliament Street. Due to the prohibitive cost of major maintenance issues, the building was sold on Jan. 30, 2017. Proceeds of the sale settled the mortgage, the real estate fees, legal fees, loans, and arrears of salaries of staff who were owed for years.
|As a community centre, members and officers voluntarily render services.
· This is assumed and expected by its membership and the general public.
· In fact, Article 7 Section 4 of its Constitution and Bylaw, as adopted by its founders, stipulates that ‘Members and officers of the Board of Directors, officers of the Executive Council and members of FCT shall receive no remuneration’. FCT never disclosed publicly, neither in Annual General Meetings nor in its official financial statements, that certain members, officers, and Board members are paid monthly salaries and gas allowances.
· It became known only right after the sale of its building when claims for huge back pay were submitted as part of the infamous $678,000 payables.
|In April 2018, a new building was acquired by the Centre at a cost of $1.9M, which was paid in full. The new building is at 4395 Sheppard Avenue East (south/west of Sheppard and Brimley). Renovations to the building were approved by the Board – a new kitchen, full washroom, library book shelves for the Filipiniana collection, roof repair, new heating and air conditioning, patio, basement. The Centre has also put $1M in investment.
|The Board should disclose the $1M investment in terms of risks, returns, and fund management.
|The “issues” that Maria CJ De Villa of the concerned members and Socrates “Soc” Moreno have been writing and being published in certain Filipino newspapers were addressed at the FCT’s Special Members Meeting of June 6, 2019 and the
Annual General Meeting (AGM) of 2017 and October 2, 2019.
At the AGM of October 2, 2019, auditors from SRCO Professional Corporation, Chartered Professional Accountants were invited to explain to the members the review of the FCT’s 2017 and 2018 financial statements which the corporation prepared in accordance with Canadian accounting standards for not-for profit organizations. The auditors offered to stay after the meeting to answer questions that some members raised. No one among the concerned members stayed.
|· SRCO clarified they were engaged only to do a financial review and not a financial audit.
· Hence, they cannot answer questions related to the $678,000 payables during (or after) the AGM, and that FCT management should be the one to answer them.
· SRCO did not present the 2016 Financial Statement.
· The DRAFT 2017 and 2018 Financial Statements were reviewed with work still in progress and subject to the final numbers from 2016.
|Review of the 2017 and 2018 financial statements was recommended by the auditors, since an audit would cost a lot more, about $10,000 more for each year and the result would have been the same. The FCT Board was being fiscally responsible when it accepted the recommendation by SRCO.
|· The FCT Board was tasked by the membership, through an approved motion, to have an independent financial audit undertaken.
· The motion was not for the Board to consult a third party who would tell them that an engagement review is cheaper, and with their crystal ball the results would be the same anyway.
· Their move to spend money for an engagement review would have been better spent on an independent audit.
· That is being fiscally irresponsible and being defiant of the membership motion.
· The FCT Board can spend $1million+ on legal fees over the years but terrified of $10,000 for a financial audit.
· Besides that has FCT really done due diligence on the costs of a 3rd Party Independent audit to quote $10,000?
|A restatement of the 2016 financial statement was also presented to the members at the 2019 AGM. Upon recommendation of the SRCO, FCT has also changed its method of Accounting from Cash basis to an Accrual basis. It has also restated its Financial Statements from 2016 to reflect any amounts that were previously not properly disclosed.
|That the 2016 financial statement was presented in the Oct AGM is completely false. It never happened. When Accountants were asked where the Accounts payable amounts came from they advised that they were provided with 2016 Financials and ask BOD. The Board mentioned the change in accounting method from Cash basis to Accrual basis but members were not informed as to whether FCT followed the proper process, nor explained why it is necessary to change the accounting method; nor was any letter from the CRA consenting to that change shown. (see https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/accounting-methods.html
|The accountants hired by FCT include:
Roman Chu – Certified Management Account – from 2004-2018
Peter Lee – 2018-2019 – Certified Public Accountant
SRCO Professional Corporation – hired in 2019 to do a review of FCT’s 2017 & 2018 financial statements
|Roman Chu was the accountant (has been for years) who prepared the original 2016 and 2017 Financial Statements which were rejected by the 2018 AGM as it failed to show the $678K payables. That was his last appearance. He has not been seen since. Peter Lee’s name never came up in the AGM. Members do not know of his work for FCT. Confidential perhaps?
Sad to note, that despite three accountants since 2016 with all the accompanying costs, FCT still does not have 4 years of final and member-approved Financial Statements (2016, 2017, 2018 and 2019). This alone would rightfully panic any community centre. A third Party Independent Audit is an urgent MUST if not an imperative for the tone-deaf FCT Board.
|At the October 2, 2019 Annual General Meeting of the members, a motion was raised and seconded that the 2016, 2017 and 2018 financial statement be approved. MOTION WAS CARRIED.
|The Board must be under the influence of something. No financial statement approval was carried. This is an outright lie.
How can the membership possibly approve the 2017 and 2018 financial statements when the statements were clearly marked ‘DRAFT’ (watermarked on every page)? There were no handouts. No publication of the Financial Statement in any Filipino community newspaper ahead of the AGM as per the FCT Constitution (Article 6, Section 1.F Duties Of Executive Council). The SCRO Accountant explained that work was still in progress to finalize the numbers. They never presented the 2016 Financial Statement.
Given this falsehood, FCT desperately needs an independent audit.
|The payables to Board Members being questioned were covered by a resolution passed by the FCT Board on May 2, 2006 and August 14, 2006.
These two Board Members were paid according to the responsibilities that they carried and acted (one as Building Manager and the other as Office Manager).
Some of the signatories to this Board resolution were also listed on Socrates
|The Board resolution to start paying monthly salaries and allowances to co-board members is null and void without a bylaw amendment to Article 7, Section 4 of its Constitution and By-Laws. For ten years since 2006, the Board failed to propose an amendment to the bylaw, was unable to inform the members about this resolution, was unable to disclose these salaries and allowances to the members, and was unable to report same in the annual financial statements. Why did the Board keep those salaries and allowances from the membership? Why has the Board keep those salaries and allowances unreported in the financial statements for over 10 years? Are there other items or matters that he members don’t know about. An independent audit definitely may help the membership in this regard.
|The other member who was paid and the payment being questioned by concerned members and Socrates Moreno was the Building Superintendent.
He was a member of FCT but not a Board Member. He was also hired per same resolution by the Board on August 14, 2006.
The salary agreed upon was a lot less than the prevailing rate, as FCT could not afford the prevailing rate.
|Why is the Board not mentioning names? Is the Board referring to Felino in the $122,000 account payable? Coincidentally there is another exact amount $122,000 owed to CRA? Whose taxes were these, FCT’s or staff member? Another one of those ‘not properly disclosed’?
By the way, whether the salary is over or below prevailing rates is irrelevant. Services are deemed voluntary as per the by law. Unless the by law is amended the Board resolutions are deemed null and void. It is time for an independent audit.
These 3 individuals were owed money for a number of years. They were paid when there was money, otherwise it was an IOU note. Is there someone out there who would be willing to work and be paid only when there was money?
|The Board seems allergic to even disclosing names. Who are these three individuals? To be paid for volunteer work subject to the availability of funds is not the issue. The real points are:
1) Salaries and allowances violate the constitution and bylaws
2) Failing to obtain membership approval for a bylaw amendment is a governance problem
3) Failing to disclose salaries and allowances to the membership and in the financial statements is a transparency issue.
Once and for all, we need to know the truth. Independent audit is past due.
|The other amount paid was a loan and was paid off without interest when the 575 Parliament building was sold.
|What exactly is the loan for, and when was it made? Who is owed the loan and how much? The Board draws a blank, a total lack of specifics. Again the Board is stuck in non-disclosure mode.|
|The Board sent an email to Maria CJ De Villa inviting the concerned members to have a meeting to resolve the issues. The Board repeatedly requested for a current list of the concerned members to contact them of the possible virtual meeting. This request has been ignored.||This statement about the meeting is preposterous. The concerned members have been pursuing the much-delayed execution of the 3rd party independent financial audit, which is the objective of the Open Letter. The Board invited the concerned members to meet but not on the topic of executing the independent audit. They advised the concerned members that the Board dismissed the need for an audit for various reasons essentially overturning the AGM approved motion. What the Board focused on was the list of concerned members. This is a grave governance misdeed, an apparent move to evade an audit.
|The Board of Directors of the Filipino Centre Toronto thank all its supporters, volunteers and staff for their contributions to the continued success of the Centre. The Board calls for volunteers. We need your support, your dedication. Let us build, not destroy our community. Let us be UNITED, let us work together, let us be proud of what we can offer to Canada.
NOTE TO MEMBERS: FCT’s financial information is available to members only and can be reviewed at the Centre by making an appointment by phone or email.
|Let the Public Be the Judge!
It is painfully evident that FCT needs an independent audit and needed it yesterday. The membership, through a validly approved motion in the October 2018 AGM, prescribed an independent audit. FCT has been devising ways, means, and measures to divert and detract from carrying out the motion. And now we are told the Board decided an audit is not necessary. The Board is on track to destroy the vision and ideals of its founders. It is now denying its members the social responsibility to ensure that the Board adheres to its constitution, subscribes to best practices, and honourably abide by the law.
Time is running out. Patience is wearing out. Too many issues and too many questions plague the community centre. The FCT culture of non-disclosure and non-compliance have to change. The more the Board avoids the audit the bigger the cloud of suspicion gets on what they are hiding. Let reason prevail in the Board, let pride and emotion not stand in the way. Let the independent audit be done to lead the FCT members to the TRUTH.
Publisher’s Note: The opinions expressed herein are solely those of the writer’s. Atin Ito welcomes any reactions, any other relevant information and submissions from all interested parties regarding the contents of this article. Please email us @info@AINewsMediaOne.com.