Michigan State Tr for Railway Pres Inc.

“During 2018, the organization became aware of a significant diversion of assets. Coinciding with the former finance director's resignation in 2018, it was discovered that the organization's quickbooks records were deleted from the organization's computer. In addition, all debit card transaction support was missing. Ultimately, it was determined that the alleged misappropriations occurred through the former finance director's use of the organization's debit card, sam's club card, and money transfers for personal purchases. Upon discovery of the misappropriation, the organization engaged a cpa firm to perform forensic procedures. An it specialist was engaged to try to restore the organization's quickbooks records. An outside bookkeeper was engaged to reconstruct the accounting records. A police report was filed, and the investigative period was set to include tax years 2015 - 2018. In 2019, the case went to circuit court and the organization was awarded a settlement of 227,819 related to the misappropriation. The former finance director was also sentenced to serve a minimum of 36 months and a maximum of 180 months in a corrections facility. Since the discovery of the misappropriation, the executive director and board of directors have increased their vigilance on overseeing the assets of the organization and strove to strengthen their internal controls over the organization's assets. The 227,819 settlement was reported on the 2018 form 990 as "embezzlement receivable." through the reconstruction of the accounting records, the organization allocated 81,718 of 2018 expenses, 90,039 to 2017 expenses, and 56,062 to 2016 and 2015 expenses. The 2018 transactions were classified as receivable. The 2017 amount of 90,039 was previously expensed as "nonoperating business loss" on the 2017 form 990, as the investigative procedures were still ongoing. Similarly, the 2016 and 2015 amount of 56,062 was previously expensed as the organization was not aware of the misappropriation at the time the forms 990 were prepared for those tax years. Thus, a prior period adjustment of 146,101 was made for the 2018 form 990 to the organization's unrestricted net assets to reclassify amounts previously expensed in 2017, 2016, and 2015. (a prior period adjustment of (5,777) was also made for a separate correction, which is why the total prior period adjustment shown on page 12, part xi, line 8 is 140,324.)”

“The form 990 is provided to the financial officer, executive director, and it is available to other board members by email.”

“The executive board monitors the conflict of interest policy through observation of day-to-day operations. The policy is enforced through avoidance of transactions that are not conducted at arms length.”

“Documents are available to the public upon request.”

“To preserve the knowledge, skills and technology involved with the maintenance and operation of steam locomotives and to educate the public about the enormous impact that these machines had in the economic development of owosso and the great lakes region.”

“All lines left blank are not applicable to the organization.”

“Maintenance 85,869 0 0 utilities 58,165 0 0 shop 32,717 0 0 non-rolling stock 13,340 0 0 volunteer/sri event expen 7,188 0 0 miscellaneous 1,477 0 0 meals & entertainment 1,408 0 0 museum 1,232 0 0 other taxes 1,169 0 0 bad debt expense 1,024 0 0 grants expense 793 0 0 train maintenance 750 0 0 job posting 0 510 0 total 205,132 510 0”