Sep 19, 2012 / 5:55 pm
A West Kelowna food bank has lost its status as a registered Canadian charity, the Canada Revenue Agency revealed Saturday.
Seventy one-year-old Bette Ladd has less than two months now to file an appeal on behalf of her food bank, Bette's Single Family and Seniors Food Bank, before Ottawa will conclude the revocation of the charity's status, due to several violations of the Income Tax Act, determined by an audit.
“The Canada Revenue Agency's audit has revealed that the Organization is not complying with the requirements set out in the Income Tax Act,” the CRA said in its notice of intention, dated Aug. 7, 2012.
Areas of non-compliance include failure to devote its resources to charitable purposes and charitable activities, failure to maintain adequate books and records, as well as three other non-compliance issues.
“The expense receipts of the Organization for the period of the audit were not kept organized, but simply maintained loosely in a box,” the CRA continued. “It was impossible to determine whether the expenses related to the Organization or to Ms. Ladd.... The majority income to the Organization has supported the fundraiser's income and personal expenses of the President, Bette Ladd, resulting in the resources not being devoted to the charitable purposes for which the Organization was designed.”
The audit showed that in 2008 the food bank spent only $17,731 of the total cash donations, of $78,023, on food; about 20 per cent of total revenue. In 2009 only $16,268 was spent on food, while revenue increased to $84,000.
Some of Ladd's personal expenses included two vehicles and a cell phone, contravening the act. The audit also found other items that appeared to be personal purchases like: Shampoo, dog food, and single item foods.
The CRA says the food bank has structured its financial affairs for the personal benefit of its directors “to the detriment of its charitable purpose.”
The food bank is staffed by five women.
Ladd, who has operated the food bank at its current location since 2008, admits to inadequate accounting.
“We made a mistake we're willing to pay the price we did pay the price,” she said Wednesday from the food bank office.
Ladd says she is frustrated with the publishing in the Canada Gazette of the CRA's notice of intent against her organization, specifically that it was released before the 90-day allotment for appeal.
“It's not right...it makes us look bad for nothing.”
She says she is concerned the negative publicity will affect the bank's upcoming Thanksgiving and Christmas drives, which help many families in the region.
“She gave us a Christmas,” says Joedy White, a single father of three who moved to West Kelowna after losing his home in a Slave Lake fire. “If it wasn't for Bette, I wouldn't have beds for my kids.... My whole house is all from her.”
Twice a month, the food bank gives the needy fresh food—including fresh milk—appliances, household furnishings, and clothing items donated by local retailers.
“A lot of people depend on her,” says White. “If stuff goes wrong (closing the food bank), there's going to be 50 families that won't know what to do.”
Regardless of the outcome of the appeal, which Ladd says is currently in process, she doesn't plan to close the food bank's doors.
“It (appeal) has cost $6,000, but I think it'll be alright...but I'm not going to shut the doors if I can help that.”
Consequences of a CRA revocation also include the loss of tax exempt status however, Bette says the food bank is still registered with the BC Society Act.
Bette's is one of two food banks in West Kelowna.
Here is a photo of part of the Audit.
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