Makes you appreciate your own organization.

Message from the SSA Chairman September 1, 2006


Dear SSA Member:


As Chairman of the SSA Board of Directors, I am committed to keeping members
fully informed regarding all issues relating to our Society, and must now report
some serious societal financial problems, and actions the Executive Committee
has taken to deal with them.


On August 5th 2006, I notified the Board of Directors that the Executive
Committee had been informed by the SSA Executive Director, Dennis Wright, that
the Society had not filed federal tax-exempt information returns with the
Internal Revenue Service since 2002. In the past, Johnson, Miller & Co. PC, CPA,
our outside accounting firm, prepared SSA’s returns. Both Dennis Wright and
James Francis, a principal of Johnson, Miller & Co., reported to the Executive
Committee that this omission was due to our Chief Financial and Administrative
Officer, Alan Gleason, not providing sufficient financial data required by
Johnson, Miller & Co. To prepare the returns. The Executive Committee
immediately asked Johnson, Miller & Co. to come to the SSA’s office and obtain
all the requisite data to enable them to do so.


On August 17, 2006, Mr. Wright reported to the Executive Committee that during
the gathering of information to prepare the delinquent returns, Mr. Francis had
discovered that the SSA had not submitted federal payroll withholding, social
security or Medicare, as well as New Mexico state withholding taxes for at least
five quarters beginning in 2003. Although payments were made for other quarters,
SSA did not file appropriate returns for at least twelve quarters. Additionally,
the financial statements, specifically the balance sheets presented to the Board
and the membership, did not reflect the unpaid taxes as liabilities of the
Society. At this time, it is not known whether anything else is inaccurate in
the balance sheets, however, further investigation is ongoing.


The Executive Committee immediately retained an outside attorney and
investigated the situation. On August 23, 2006 Mr. Gleason claimed that a lack
of available cash on hand caused him to decide to not pay the taxes when due.
When questioned, he admitted not to have made anyone else, including the Board,
aware of such decisions. The Executive Committee placed Mr. Gleason on paid
administrative leave until such time as all information required to submit the
state and federal tax returns is ascertained and it is determined exactly what
federal and state taxes are due. Once those issues are resolved, appropriate
further action regarding Mr. Gleason will be considered. Measures to protect SSA
funds and other assets have already been put in place, as has an interim system
to control SSA financial matters.


While accurate figures have not yet been derived, it appears that the actual tax
liability could be between $200,000 and $300,000 which with the addition of
interest and, to the extent not mitigated, penalties, could total as much as
$600,000.


This obviously signals a potentially catastrophic situation. The Executive
Committee intends to have a thorough and independent financial investigation
conducted to ascertain, among other things, the reasons for the apparent cash
shortfall.


To the best of its ability, the SSA will pay all applicable taxes, penalties and
interest imposed by state and federal governments. Doing so will strain Society
finances to the limit, however the SSA can borrow from certain unrestricted
funds within the SSA Foundation. To place our Society on a sound financial
footing going forward, significant reductions in services must occur. A task
force of present and former SSA Board members has already been established to
assist the Board in this regard.


The situation I have described above is clearly the single most serious
challenge the Society has faced in its 75 year history. Please understand that
SSA leadership is totally committed to reaching a successful resolution to this
problem, but doing so will require significant continued support by the
membership. SSA members have a long history of aiding the Society when most
needed. I hope I can rely on you personally to support your SSA leaders during
this extremely difficult time, as we strive to bring these matters to a
successful resolution. Our goals are to meet our financial obligations to state
and federal governments and to transform what has always been a struggling
organization operating “on a knife-edge” into one that is financially strong,
and that meets your needs as a member.


To save costs, all subsequent communications from me regarding these important
issues will be posted on the members-only section of the SSA website and in SSA
e-News. You may contact your Regional Director, other members of the Executive
Committee, or me directly should you have further questions.


Sincerely yours,


C. Dianne Black-Nixon

Chairman of the Board of the Soaring Society of America