PRSA Assembly delegates may want to recalibrate just how many financial untruths they’re willing to tolerate without protest.
As part of this annual event, the organization’s governance-mandated membership voting delegation — its Leadership Assembly — will convene.
If PRSA’s finances aren’t prominently on this year’s Assembly agenda — or, just about the only thing on its agenda — then the rabbit-hole of PRSA’s dysfunction is likely only to get deeper.
In fact, the current hole may already be too deep for the organization to dig its way out. Which brings up this question:
Will PRSA Assembly delegates be given by PRSA National any truthful, accurate information upon which to base rational presumptions, questions, or even good faith, as they seek to vote for new leaders?
Since at least 2018 and likely well-before, delegates have been given nothing of the sort.
As mandated by New York State Not-for-Profit Corporation Law, PRSA Assembly delegates are supposed to receive from National Board leadership:
“…a report, verified by the president and treasurer or by a majority of the
directors, or certified by an independent public or certified public
accountant or a firm of such accountants selected by the board, showing
in appropriate detail the following:
“(1) The assets and liabilities, including the trust funds, of the
corporation as of the end of a twelve month fiscal period terminating
not more than six months prior to said meeting.
“(2) The principal changes in assets and liabilities, including trust
funds, during said fiscal period.
“(3) The revenue or receipts of the corporation, both unrestricted and
restricted to particular purposes during said fiscal period.
“(4) The expenses or disbursements of the corporation, for both general
and restricted purposes, during said fiscal period.
“(5) The number of members of the corporation as of the date of the
report, together with a statement of increase or decrease in such number
during said fiscal period, and a statement of the place where the names
and places of residence of the current members may be found.”
But if you’re a PRSA Assembly delegate — Good luck getting this information.
For years, PRSA National Board leadership and executive staff have not complied with New York law, via these informational mandates as required for 10 years now.
Instead, PRSA National leadership is known to use its Assembly as a place to conduct a day-long infomercial, in an over-air-conditioned ballroom, in an expenditure of valuable time that most delegates do not find useful, nor of much service to their memberships back at the chapter and district levels.
The bigger issue: PRSA National has not accurately reported its millions in financial losses to its own Assembly, in years… much less stood for “live” questioning from the delegation.
In fact, there have been major discrepancies in PRSA’s nebulous financial messaging vs. stark financial realities.
Take last year (2022):
OCTOBER 27, 2022 NAT’L BOARD MTG MINUTES:
Last October, the PRSA National Board received a hideous financial report at its Board meeting several weeks prior to the 2022 PRSA Assembly.
Then-Treasurer Joseph Abreu (who, in 2023, is now National Chair-Elect and is set to serve as PRSA National Chair in 2024) and CFO Phil Bonaventura (who is paid in that role some $450,000 a year) reported, per meeting minutes:
“As of August 31, PRSA showed a net operations deficit of $652,996… Losses in the investment portfolio continue… PRSA will not do as well as anticipated for the year and the Society is not on target to hit revenue targets… Bonaventura…anticipates the overall deficit will be in six figures.”
Further, CEO Linda Thomas Brooks (who is paid more than $400,000) reported ICON sponsorships “were on target, however.” (This little detail became important, later on.)
2022 ASSEMBLY MINUTES (Nov. 12, 2022):
Sixteen days later, at PRSA Assembly in Texas, the Treasurer stood up before the Assembly delegation, singing a rather different tune than the boardroom doom-and-gloom of October 27.
Instead of reporting the dire situation that he reported privately to his board only days earlier, he smoothly conveyed a seemingly innocuous message to the Assembly that “PRSA expects a small operating deficit this year,” which sounded harmless enough…
As usual, Assembly minutes documented that PRSA did not comply with New York State Law by not reporting 12-month aggregated financial results including the full balance sheet and Profit/Loss statement.
Also a NY State law compliance violation:
Leadership opted not to give a year-over-year membership report as reflected in minutes, opting instead to refer vaguely to an unspecified “headcount” “on the rise.”
DECEMBER 2022 “YEAR IN REVIEW” PUBLISHED BROCHURE:
By early December, PRSA opted to publish a legally noncompliant annual report (only AFTER Assembly), with financials only covering an 11-month year-over-year timeframe, instead of the legally required 12-months.
What’s more, this smoking-gun document only disclosed -$93,865 in financial losses for the Jan.-Nov. 2022 timeframe… which is more than a little curious:
DECEMBER 15, 2022 NAT’L BOARD MTG MINUTES:
Then, in mid-December 2022, CFO Bonaventura reported “a net deficit of $119,344” (or double the deficit as budgeted).. but, he said that these figures are missing data, as “staff (had) not fully recorded transactions from ICON so some of the numbers are subject to change.”
He nonetheless assured the PRSA National Board that he was “cautiously optimistic for the end of year numbers.”
Curiously, PRSA’s National Board Chair “abstained” from voting on a so-called “Mitigation Plan” to PRSA’s ongoing financial disaster. The minutes do not make clear her rationale for abstaining.
Further, the “more detailed mitigation plan before voting on the 2023 budget,” requested by one PRSA National Board member, was stalled by CFO Bonaventura, under promises that “he could provide that detail at the board’s January meeting.”
Yet January 2023 PRSA National Board meeting minutes do not reflect any mention whatsoever of the word “mitigation,” and the only “Financial Report” provided to Board members was this paltry reference:
FEBRUARY 23, 2023 NAT’L BOARD MTG MINUTES:
By February 23, 2023, Board minutes shockingly revealed that the “deficit” — as referenced back in December as only totaling $93,865 in the year-end brochure and later referenced as $119,344 in December minutes — mysteriously ballooned like a mushroom cloud by some 9-10 TIMES those figures reported only two months previously.
The new total-loss figure also utterly negated the report Abreu postured to delegates the prior November of only a “small operating deficit.”
PRSA’s 2022 loss was now being quietly reported to the Board in Feb. 2023 as $1,070,000:
So much for “cautiously optimistic”!
No news release was issued — at all — by PRSA National to correct the record of Treasurer Abreu’s wildly false misinformation peddled to a curiously trusting voting delegation three months prior.
Of course, this subsequent failure to correct the record also constituted an ethics violation of PRSA’s own Ethics Code, which requires, in writing, that all members (certainly including PRSA National Board members and well-paid executive staff) “Act promptly to correct erroneous communications for which the member is responsible.”
With all above-highlighted Ethics Code tenets violated, neither Thomas-Brooks nor Bonaventura nor Egan nor Abreu nor the entire sitting 2023 PRSA Board can make a case that this breaking news simply was inconsequential, not meriting a member update.
These are, after all, member dollars being lost, hand-over-fist.
Leadership further reversed course in having earlier reported that sponsorships were “on target,” to now saying this massive loss was in part due to “a decline in… sponsorships.”
In PRSA Land, is it permissible for a “target” to mean you’re allowed to incur massive losses? Are losses now “goal”?
This is the level of spin that PRSA members are now confronted with and forced to dissect, thanks to a brand of “ethics” actively being pandered to the industry that allows — essentially — purposely misleading financial communications, which betray the U.S. PR industry’s core integrity.
But it gets worse…
APRIL 20, 2023 NAT’L BOARD MTG MINUTES:
Another Bonaventura departmental misstep occurred this calendar year, as April 2023 Board minutes capture “…a computer error that resulted in additional income recorded on the 2022 financial statements.”
So, whatever income PRSA said it earned in 2022, was overstated.
How do we know this “computer error” was not systemic enough to overstate YEARS worth of financial statements?
By how much PRSA’s income was overstated… members aren’t allowed to know.
The minutes don’t say, thanks to the apparent lack of being able to write down a simple recorded figure in the minutes, via the non-disclosure handiwork of PRSA’s National Secretary.
There is no telling how much the $1,070,000 loss of member dollars was understated due to revenues having been overstated. Yet somehow all this song-and-dance gets a “clean audit”?
And that’s the synopsis so far for PRSA’s 2022 budget year…
But Bonaventura won’t file his 2022 IRS Form 990 until November 2023, one month after the 2023 Assembly and more than a year after the 2022 Assembly.
This annual protocol — which had been going on in PRSA for more than a decade — means that the most recent IRS Form 990 of financial data that PRSA voting delegates can locate as of this writing is from 2021, back when Michelle Olson was Chair.
She oversaw a $725,978 net loss of member dollars, which at least was better than her predecessor, Garland Stansell, who oversaw a $1,463,680 loss for 2020:
So far, 2023 financials under Michelle Egan’s leadership aren’t looking good.
Egan served as PRSA National Treasurer for two years in a row, during the pandemic, and oversaw the PRSA National Board relaxing its financial protocols in a Board vote that she and Bonaventura endorsed, under the excuse of PRSA’s financial P&Ps being too “prescriptive” for employees working from home to comply with…like Bonaventura.
On Egan’s watch as a Board member, the PRSA Board also voted several years ago to begin concealing the identities of the members of its Audit Committee.
June 9, 2023 National Board meeting minutes reported that — as of April of this year, PRSA “showed an operational net loss of $214K“… although the minutes are written such that this news is positioned as cause to celebrate.
At the end of this meeting, minutes also show the Board went into a two-hour “Executive Session”… with topics and deliberations un-minuted, enabling secrecy about what’s really going on behind the curtain.
Questions for PRSA Assembly Delegates to Ask National Leadership now:
- Over the past five years (including 2023 YTD), just how many millions of PRSA net member dollars have been lost and are unrecoverable? By my tally, it’s around $5 million… but that’s using the numbers PRSA belatedly discloses… alleged “computer” glitches and all. There’s no telling what a forensic audit by a competent independent auditor would turn up (one that hasn’t been fined during the years of its services to PRSA by the U.S. Securities & Exchange Commission for fraudulent audits for another client).
- How close is PRSA now to insolvency? What are the risks if the portfolio suffers a sudden, major market downturn?
- How much longer can PRSA’s investment portfolio bail out the financial consequences of their horrible operational decision-making?
- When is PRSA National going to start complying with New York State Law that’s been in place for a decade — instead of purposely and illegally violating it? PRSA’s idiotic Assembly financial non-reporting only gives nebulous descriptions of performance as per a wholly undisclosed “budget,” which is completely misleading to delegates, particularly now since PRSA is literally “budgeting” mega-losses in advance of the year. They’re not even trying to break-even, by all appearances.
- Precisely what it is that merits CFO Bonaventura earning a salary around $450,000 in member dollars? This guy was earning half that amount 10 years ago. PRSA is supposed to be a NOT-FOR-PROFIT. And what’s more, only in PRSA does the male CFO apparently (?) get paid more than the female CEO. So much for “Diversity and Inclusion”… Someone call the EEOC!
So, PRSA Assembly Delegates:
…If you don’t get engaged and start demanding answers, you’re likely not going to have an organization left, sometime in the foreseeable future.
The question about insolvency is for real.
But then again, in the grand scheme of PRSA’s grand schemes of constantly undermining this industry’s credibility, maybe that’s a good thing.
What’s not a good thing?…
Well, for starters, the U.S.-based PR trade press being totally disengaged on this slow-growing yet abundantly clear PR trade-org catastrophe.
Nothing has been tracked or reported of this mess for some years now. The last remotely objective article written about PRSA was back in August 2020, when the organization had floundered for more than a year with no permanent CEO… and with the Board allowing Bonaventura to report to himself as CFO + “Interim” CEO.
The lack of objective media coverage about PRSA further raises the question of where some of that PRSA deficit spending may be going. After all, PRSA is known to pressure reporters far more about what NOT to report than what to report.
Why is the PRSA National Board expending its own attentions and precious resources toward subject matter like creating a new so-called “Hall of Fame Award”?
In my view, PRSA is ripe for a “Hall of Shame” … or at least a “Profiles in Noncompliance” tribute.
What’s apparently being teed up here is another platform for PRSA National to generate meaningless platitudes… with all the usual suspects sitting around, toasting themselves, feasting on New York wine dinners with chateaubriand that their PRSA bank account can’t afford, and meanwhile, with heartland PRSA members actually footing the bill, then reading all about it months later.
Can’t make this up.
Anyway. Here’s to the close-out of PR Ethics Month in September, as we look ahead to an October PRSA Assembly that should be one for the books… the financial books, to be exact.