Sidebar: The Quirky Form 990 of Ohio State's Research Arm

The $375 million organization lumps most of its expenses in a single line and reports no salaries paid at all, even though it lists an executive director as a key employee. 

Ohio State University itself is a state university and isn't required to file a Form 990 with the IRS.  However, OSU has set up a nonprofit subsidiary for its research grants, the Ohio State University Research Foundation (EIN 31-6401599 Form 990).  As we noted in the accompanying article, OSU greatly increased its research program under retiring president Karen A. Holbrook, and it shows:  the research foundation reported over $375 million in income in the year ended June 30, 2006. 

Most of this income (about $367 million) is shown going out as payments to affiliates (on line 16).  There's supposed to be a schedule attached showing where the payments went, but there is no such schedule attached.    It would be logical that the payments would go to Ohio State University, but there's no positive confirmation. 

What's left is about $7.4 million in expenses.  Here's where the form get really coy.  On page two, part II, the statement of functional expenses, there are a handful of lines completed, but none relating to salaries.  Then there's an additional expense line labeled Administrative Services in the amount of $6,671,032.  There is no further information.  All these expenses are listed in program expense column, although from the description they should appear in the column for management and general expense.

Now, back in the back (page 15 of the pdf file), an interim executive director is identified, but it's on a list of officers, directors, and key employees that shows only names, addresses, and titles.  It leaves off the columns relating to compensation.  Yet it's very unlikely that an executive director of an organization this size, even an interim, would be working without pay. 

And back on line 90b (page 7 of the pdf file) the organization reports that it employed 115 people.  But no salary or benefit expense is reported. 

I speculate that the the subsidiary employs staff paid by the university and the makes an accounting transfer to book the expenses to the subsidiary.  But that internal accounting short cut is inconsistent with the reporting of a key employee and a staff headcount.  If people can be identified as working for this subsidiary, their salaries and benefits should be in its expenses in Part II on lines 25 to 29.  And the salary and benefits of the key employee need to be listed in the schedule.

The form lists Deloitte & Touche LLP as a vendor being paid $89,675 for audit services. But their name is not listed as the preparer of the Form 990.  The only name that appears is that of an executive director (a different name than the interim director in the list of officers etc.)  The typeface in the form suggests that they used the fill-in Form 990 from the IRS web site. 

What this form indicates to me is that OSU does not take the Form 990 seriously.  We have seen this before from a major university (Yale's Wacky Form 990, February 21, 2007).  And it calls into question the IRS' monitoring of these filings if errors this significant are allowed to pass.  There are fewer than 2,000 returns reporting income over $100 million, yet they account for three-fifths of the total income of all charities.  There is no reason why someone in the exempt organizations section can't be looking at all of them to screen out these obvious flaws. 

Comments

[Paul Dolnier]

Again a MAJOR problem that is a systemic issue with IRS Form 990, wether you are a large dollar or small dollar non-profit, apparently you can FILE " almost anything in a 990 tax return " and unless a required form or schedule is missing, IRS seems to accept almost anything ....

If this non-profit was a regular corporation instead of a non-profit that files a 990 tax form, they would have been contacted for clarification of " missing and incomplete items " almost immediately and made to correct all issues and errors or worse off the issues could have triggered an IRS Audit due to the problems that your article described.

Just my thoughts on this issue.

[real jordan sneakers]

Great. We are looking for just similar to this.

[MLB Hats]

Many thanks for the article. I will have a link back to this information from our fresh blog.
http://www.cheaphatcaps.com
http://mvpcaps.org
http://caps2011.com
http://hats-club.com

[バーバリーマフラー]

ところが、十津川村野尻では増水した川が村営住宅２棟をのみ込んで２家族が流され、五條市大塔町宇井では多数の行方不明者が出ていたことなどから、川上村の被害が広く知られることはなかった
今も現場は土砂に覆われたままだが、迂回（うかい）路も通り、土砂の除去も少しずつだが進む。管轄の吉野土木事務所は「来年４月中旬ごろをめどに、崩落箇所に仮の橋をつくり通行できるようにしたい」としている。
こうした復興のつち音は響いているものの、観光への風評被害は続く。村の観光の中心でもある「ホテル杉の湯」などは通常通り営業しているが、迂回部分に立地するため見逃されがち。