Examination of Financial Statements of Disabled American Veterans, National Headquarters, and Life Membership Fund for Year Ended December 31, 1976, and the Service Foundation for the 16-Month Period Ending December 31, 1976
FOD-77-16: Published: Nov 16, 1977. Publicly Released: Nov 16, 1977.
- Full Report:
Examination of the financial statements of the Disabled American Veterans National Headquarters, the Life Membership fund, and the Service Foundation for the year ended December 31, 1976, was made in accordance with generally accepted accounting principles applied on a consistent basis. Except for the direct charge in 1976 to the operating funds for payment of amended retirement plan costs, the financial statements and supplemental schedule presented fairly the financial position of the National Headquarters and the Life Membership Fund at December 31, 1976 and 1975, the Service Foundation Fund at December 31, 1976, and August 31, 1975, and the results of their operations and changes in financial position and balances for the periods then ended.
An amendment to the Headquarters retirement plan effective in January 1976 resulted in about $536,000 additional costs for the plan. Headquarters recorded the extra costs as a charge to 1976 operations. This is contrary to generally accepted auditing accounting principles, which require that such payments be recognized ratably over the remaining service lives of employees. Disabled American Veterans has been assessed certain Federal income taxes for the years 1970 through 1973, and there are indications that similar assessments may also be proposed for 1974 through 1976. In order to contest the assessments for 1970 through 1973, they paid the amounts assessed and recorded such amounts as a claim for refund of taxes. The amount of refund that may ultimately result from the suit or any additional taxes that may be assessed for the later period cannot be determined at present. (SC)