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The Board of Directors of the American Saddlebred Horse Association would like to respond to the article (“Saddlebred group has a bumpy ride,” July 27), which pertains to current litigation pending between the ASHA and a small group who refer to themselves as “concerned members” of the ASHA. We are a volunteer group of passionate and dedicated horsemen and women elected by our members to provide leadership and governance.
This litigation stems from a request that the ASHA received in the spring of 2009 from an attorney for the concerned members for production of various documents. As a nonprofit, 501(c)(3) organization, the ASHA is required by the IRS to make copies of its Form 990 Tax Returns available for review by the public, while redacting certain private donor information. The issue has been the scope of the information to be produced to the concerned members.
The article contained several inaccurate statements:
§ “An ASHA audit had disclosed serious financial deficiencies within the organization;” “there’s been a lack of oversight of how the money has been spent.” In fact, outside auditors have found ASHA books and records to be in order. The financial records of the ASHA have always been audited by an outside CPA Firm on an annual basis. The auditor’s report for the year ended Dec. 31, 2010, as well as all previous audit reports for the ASHA, have all included the statement of the auditors that “in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the ASHA and the results of its operations and cash flows.” All audits of the ASHA have been performed in accordance with generally accepted accounting principles, which require the audit firm to obtain “reasonable assurance about whether the financial statements are free of material misstatement.” The phrase which the concerned members refer to is actually “significant deficiency,” an accounting term that is commonly used in financial analysis as a classification of internal control, which was used in one audit firm letter to ASHA management. In small organizations such as non-profits, it is often associated with limited personnel resources in the financial area such that one or two people have financial reporting responsibility. As a result of this, the audit firm, in its plan to conduct the audit, expands its audit tests to obtain assurance that it can express an opinion on the financial statements. Of far greater importance is the unqualified audit opinion, which the auditors gave the ASHA. In addition to the above, the ASHA has an active Finance Committee which includes financial professionals, which Committee regularly reviews all financial records and reports to the Executive Committee and the Board of the ASHA on a regular basis. We routinely conduct extensive “financial oversight” that is appropriate and prudent.
§ “It keeps all registrations and operates a museum at the park.” The ASHA does not “keep all registrations.” Registration of American Saddlebred horses is handled by the American Saddlebred Registry, Inc., which is a separate nonprofit 501(c)(5) nonmember entity. The American Saddlebred Museum located at the Kentucky Horse Park is owned and operated by a separate entity, the American Saddle Horse Museum Association, Inc., which is a nonprofit 501(c)(3) entity.
The ASHA currently has approximately 7,400 members, not 8,000 as was mentioned in the article.
§ “ASHA also receives state funding.” This statement is incorrect; the ASHA receives an annual payment from the Kentucky State Fair board in connection with various promotional activities performed for the World’s Championship Horse Show, but there is no “state funding” provided to the ASHA.
§ The employment agreement and deferred compensation agreement between the ASHA and its prior Executive Secretary Alan Balch have been provided to the concerned members on several occasions.
§ The ASHA does not have a general public disclosure requirement; it has a responsibility under Kentucky law to make its books and records of account available to its members who inquire with a proper purpose.
§ To date, the ASHA’s small staff, with the help of board members, has spent much time and effort in producing and providing voluminous documents and records to the concerned members. It is disheartening to the Board that the concerned members do not appear to have yet reviewed the contents of eight bankers’ boxes of documents that were produced by the ASHA in June, and that since 2009, only one member of this group has been present at the review of documents. At any rate, the ASHA intends to continue to comply fully with the directive of the court and produce any and all information to which the concerned members are legally entitled. The board is hopeful that the concerned members can review relevant books and records of the association and satisfy any concerns they may have. The board believes in transparency and supports disclosure to all members of the ASHA of whatever books and records of the association are appropriate for disclosure.
The board does appreciate The Sentinel-News’continuing support of our breed, which is vitally important to Shelby County as the “Saddlebred Capital of the World!” We thank you for your coverage of horse shows, local Saddlebred operations in Shelby County and general promotion of the American Saddlebred.
The ASHA board of directors consists of Betsy Boone, Concord, N.C., Bret Day, Versailles, Lisa Duncan, Lexington, Bob Funkhouser, Franklin, Mass., Louise Gilliland, McAlester, Okla., Nelson Green, Nicholasville, Minna Hankin, Horsham, Pa., Chuck Herbert, Evansville, Ind., Carl Holden, Prospect, Germaine Johnson, Lexington, Margaret McNeese, Houston, William Marple, Dallas, Scott Matton, Hartland, Wis., Tandy Patrick, Louisville, Jim Ruwoldt, Roswell, Ga., Lisa Siderman, Malibu, Calif., Judy Werner, Waterloo, Ill., William Whitley, Cary, N.C.