Where Most Needed

The ghost Boy Scouts of Alabama hit the news at the end of 2004, with allegations of hugely inflated membership numbers by the Greater Alabama Council of the Boy Scouts of America (EIN 63-0302107 Form 990).  The news stories suggested inflation of 30% or more, and the seriousness of the charge lay in the fact that funding allocations (from United Way and others) were based on the number of members. 

Many months later, the internal audit report (press release) by the forensic auditors has determined that a number of scout registrations did not comply with scout policies, due to errors like the absence of parent or guardian signatures, incorrect birth dates, or missing home address.  But the number of errors shows that during the audit period the number of scouts was dropping rapidly:

• There were 5,619 non-compliant registrations in 2002, representing 13% of traditional scout membership (implied total: 43,000).
• There were 4,265 non-compliant in 2003, representing 11% (implied total: 39,000)
• In 2004, just 3,518, also representing 11% (implied total: 32,000)
• The reported count of 21,055 scouts in 2005 is correct. 

This represents a drop of 50% in membership in the period 2002 to 2005.  Whether this is a true drop or whether the numbers in prior years were more inflated than the review of applications could verify is a question that perhaps the FBI investigation will establish. 

The press release that announced the audit results also announced the retirement of Ronnie Holmes, head of the council (here's the report from the Birmingham Times).  The Form 990 shows Mr. Holmes earning $215,000, with no other staff earning over $100,000.  Three other staff with operational roles were paid more than the finance director, who earned $62,970.  This $6 million operation with a staff of ninety reported total administrative staff pay of just $124,000.  To me, the wide disparity between top executives and administrative staff pay is an indicator of an overall lack of attention to internal controls.