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Non-profits using county funds to provide a tax return

by Larry S. Chowning

The Middlesex County Board of Supervisors voted on July 21 to require each non-profit organization that receives county funds to annually provide a copy of its 990 tax return or a full audit to the county.

At their meeting on July 7, supervisors approved a motion requiring a full audit from the non-profits, and letters were sent to each organization requesting a full audit. 

At the July 21 meeting, however, members of these non-profit organizations contended that compiling a full audit each year would be too expensive.

Bill Thrift of the Middlesex Volunteer Fire Department (MVFD) of Urbanna said it was cost prohibitive for the MVFD to provide an audit every year—unless the county would pay for it.

Wayne Evans, captain of the Middlesex County Rescue Squad in Deltaville, agreed with Thrift and noted that about half ($53,000) of the squad’s income comes from the county. “I’ve looked into an audit and it will cost us from $5,000 to $10,000 a year, which will take about 20 percent of your (county’s) gift to pay for the audit,” he told supervisors.

“Our operational expenses run about $125,000 a year,” said Evans. “We replace one of four ambulances every two years at a cost of $125,000 to $150,000, and we are building a squad building in the Hartfield area.

“We would gladly comply with the county’s request, provided we can send you the bill for the audit,” said Evans. “Or the county can send their independent auditor. We have an annual tax review and that’s available to anyone.”

Jim Tinney of the Central Middlesex Volunteer Rescue Squad of Urbanna said his squad is currently going through an extensive audit.  “We are going back even further than a few years,” he said. “We wish we were as affluent a rescue squad as the Deltaville squad. We just don’t have the income. We have a balance in our checkbook of slightly under $40,000.”

Carlton Revere of the Hartfield Volunteer Fire Department told the supervisors, “I think everyone appreciates what you are trying to do. However, the word ‘audit’ involves a much larger process than what you really need for us to do.”

Revere indicated all the county really needs is a non-profit group’s tax returns. “I just ask that you take it back a bit and use the tax returns, which are all you need any- way,” he said.

Supervisor Jack Miller made a motion to require a 990 tax return each year rather than an audit. “Everyone has to have a 990 tax form, so I think we should require it rather than an audit. I think it is safe ground to be on and it will give us an idea of where our taxpayer dollars are going.”

Supervisor Kenneth W. Williams said he did not want to do anything to hinder the non-profit groups. “These people are all volunteers . . . they go through enough trying to raise money to stay on the road.”

The four supervisors at the July 21 meeting voted unanimously to change the proposed ordinance from requiring an audit to simply requiring a 990 tax form or an audit at the end of each fiscal year.

posted 07.29.2009

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