Following Horse Sport’s report that EC had violated financial disclosure regulations for Not-For-Profits, the federation’s Board was left to explain themselves to the voting members at a chaotic Annual General Meeting. Ultimately, the members did not accept the financial statements that the Board had approved and the meeting was adjourned until October 12th.
Despite presenting audited financial statements, EC was unable to explain to its various stakeholder committees how they arrived at the final numbers. The problem was blamed on the series of financial officers that have departed under Eva Havaris’s troubled term as CEO. “There have been at least four different financial officers working on this over the last year,” said EC president, Peggy Hambly. “It’s not a pleasant situation to be in, for anyone.”
EC was required to provide voting members with a copy of its financial statements 21 days in advance of the meeting, but members only received the documents 72 hours before the AGM. As a result, the members agreed, by a narrow margin, to defer their acceptance of the financial statements until they had the minimum 21 days to review and were provided with the details they had requested.
Those that asked for the delay wanted EC to provide the committees with more information about the revenue and expenses allocated to their group. For example, as detailed in another report previously published by Horse Sport, the Equine Medication and Control Committee is unaware of how they overspent by $33,004 in the last fiscal year, as they had not been provided with any of the financial information.
In addition, the jump committee, which is reported to have overspent by $255,617, has also not received any information about their budget.
“It’s obvious that Jump had a reduction in their restricted fund of some $255k, which may or may not, but mostly likely was, intended as expenses but there has been no detail provided to the jump committee at this stage of the game,” said Craig Collins, a member of the jumping committee, an incoming member of the board, AND former category A member. “So, the simple question is: $255k is the audited number but the jump committee is saying how did we spend that money?”
Despite the many concerns, both EC’s president and financial controller, Robert Westgarth, urged members to approve the financials and trust that EC would provide the details later.
“I do understand the delicacy around the 21 days that we did not get to give everybody and for that I’m supremely sorry, but we really are giving it our best attempt, trying to make sure that we are building a system you can trust in going forward,” said Westgarth. “I know I don’t have the right to ask everybody for their trust at this point, but I would like to ask for it regardless.”
“The reality is that it’s going to cost the organization a lot of money just for a few people to prove a point,” commented category B voting member Gord McKenzie, when it was revealed that there would be some expense to re-schedule the new Board’s first meeting. “They are audited statements and we are not going to change them. I think that we need to get on and accept these statements with the proviso that the concerned people are going to get the detail they need in the future and not hold up the organization.”
The auditors did note that it was possible for the statements to be approved at the AGM and adjusted next year if changes were required after a review. “The numbers are what they are as far as total revenue and total expenses go,” said KPMG’s representative. “There is a possibility as well if we do take the time to go through the details for each department and there are changes required, we can also pick this up in the next year and do what we call a comparative change or disclosure to say that we had reviewed the departmental reporting at year-end and decided that changes were required.”
After years of hearing assurances from the board, Havaris and her employees, the members could not be satisfied and did not accept what was presented by the Board. “This is the same thing I heard when I joined the board 17 months ago,” commented Ross Millar, who resigned from EC’s board at the beginning of the year over the same concerns. “We accepted a year ago with details to come and they never came.”
One notable change to EC’s by-laws was made during the proceedings. The motion was passed to allow Officers from a Recognized Affiliate Organization (like a provincial office or breed organization) to be an Officer or Director of EC. In the small horse industry, the previous requirement limited the number of people that could participate on EC, but it also creates the potential for serious conflicts of interest. As such, it was surprising that no discussion about the ramifications was discussed before being approved.
As the business required to be conducted at the AGM remains incomplete, the status quo with the current Board is maintained. As soon as the members approve the financial statements, the new Board will take office.