The Arc in Hawaii

“Lambert Wai and Francine Wai have a family relationship. Linda Balazs and Paul Balazs have a family relationship.”

“In March 2017, an impropriety was discovered involving a former employee. Following a detailed review of the financial records for the year ended June 30, 2017, management discovered a misappropriation approximating $343,000 for the fiscal year, that was isolated to certain expenditure accounts. Due to the method in which the misappropriated funds were recorded in the Association's financial records, as well as the unavailability of supporting documents, although the total impropriety could be quantified, the amounts included in each of the expenditure accounts could not be determined. In an effort to fairly state program services at year-end, management derived a methodology that they believed reasonably extracted estimated misappropriated costs from program services and reclassified them as misappropriation costs within management and general expenses on Line 24 of Part IX - Functional Expenses. The Association has since filed a case with the Honolulu Police Department and as of the date of this report, the case is progressing. Management has not been able to determine the duration of the impropriety nor is able to determine the ultimate impact, if any, to the financial statements as it relates to restitutions or future funding.”

“The organization has general members that elect the Board of Directors.”

“There is one class of general membership. They have the right to elect the Board of Directors and approve certain decisions.”

“State law requires approval by the members of amendment of the articles of incorporation, mergers, sales of assets other than in the regular course of activities, and dissolution. The bylaws of the organization require that any amendment of the bylaws be approved by a majority votes of the members qualified to vote present in person at a meeting of the members.”

“The Arc in Hawaii is located on the island of Oahu and is designated the "state" chapter of the national association of The Arc. Affiliated chapters are located on the other islands of the state. Each of these organizations is separately incorporated and operates independently. There is no overlap of governance or operations, apart from having the common goal of serving people with intellectual disabilities.”

“Information from officers and directors and other nonfinancial data and financial information from the agency's audited financial statements are combined in a draft of the Form 990 prepared by an outside certified public accountant. Several directors, including the Treasurer and President, along with the Executive Director and Finance Director, review the draft in detail and revise as appropriate. Once the detailed review is completed, the Form 990 is sent to each Board Member by electronic or paper copy to allow for additional review, comment and recommendations.”

“A Conflict of Interest questionnaire is completed annually by all Directors along with the Executive Director and Director of Finance. It includes information about business affiliates. A listing of these affiliates is made and reviewed to determine if the organization has business transactions with any of these individuals and or affiliates. If a director or officer proposes to engage in or has an interest in such transactions, the director or officer is recused from discussion and decisions about the transaction.”

“No determinations were made with respect to compensation during the tax year for the CEO, Executive Director or any other person who is the top management official.”

“The organization's financial statements are available to the general public via posting of the Form 990 on the State Attorney General's website for Charitable Organizations. The Form 990 may also be available on other websites such as Guidestar. The governing documents, conflict of interest policy and financials are also available upon request at the organization's administrative office.”