Quote of the Day

Wednesday, June 3, 2009

Financial Statements

A recent reader comment about the school's mortgage on its Cedar City building (despite a "no debt policy") got me wondering what the school's financial position really is. As the school is really just a DBA of the George Wythe Foundation, which is required to make annual filings with the IRS (Form 990), obtaining this information was relatively easy.

Below are the Balance Sheet and Income Statement of the George Wythe Foundation for the years 2002 - 2008. Note that in 2008, the school that "would use absolutely no debt for any reason" paid $81,000 interest on $1.47 million in debt.
Balance Sheet (click to enlarge)

Income Statement (click to enlarge)


There are several interesting things here, but what really stands out to me is the $1 million jump in debt from 2006 to 2007 (look at the balance sheet, second section, second line down). I can understand the 2005 appearance of $550K, which is likely the mortgage on the Cedar building. But this $1 million jump appears to coincide with the school's acquisition of land in Monticello, Utah.

I had always thought this was a mixture of donated and outright-purchased land, but apparently not. As they have suspended plans for a Monticello campus, this idle land does not appear to be anything but a drag on the foundation at this time. The fact that they appear to have bought it in early 2007, around the top of the real estate boom, begs the question of whether the school is in an upside-down position on it.

According to GW, the Monticello parcel is 520 acres. Let's be generous and assume that the $1 million mortgage represents the full purchase price, i.e. it was 100% financed and no donations were involved. That puts the land at $1,923 / acre. A quick perusal of the MLS puts land in Monticello at about half that.

10 comments:

R.C. said...

Real GW:

What is that "Coral Ridge Baptist Univ" portion of the liabilities?

Do they still owe CRBU money? Why did the payments start in '06?

The Real George Wythe said...

RC -

I'm glad you brought that up!

I honestly have no idea what that is, or what may have triggered the liability in 2006.

I'm speculating here, but perhaps it represents payments to Don Sills stemming from the 1/1/02 transfer of the school from CRBU to the George Wythe Foundation.

If CRBU was a non-profit, this would actually be illegal, unless the payments are really being made to an existant non-profit called CRBU. (Sales of non-profits have a pretty unique accounting treatment.)

But like I said, I'm just speculating, and I have no idea what this is.

R.C. said...

Have you looked for CRBU financial information? I would assume that it was either a non-profit or a church...isn't that information possible to find?

Are they still 'in bed' with CRBU?

R.C. said...

One more thing on CRBU - if they are still receiving GWU payments (that is what I don't understand) are they still alive at least as a business?

I know there is still a church... which, if you haven't put up on your blog yet, go get the google earth street views....

The Real George Wythe said...

RC -

I was wrong -- the CRBU liability didn't pop up in 2006, it was there all along (but buried in the other liabilities breakdown). I have updated the balance sheet in the post.

I searched for CRBU at the irs.gov non-profit lookup, but couldn't find it. I also searched for any CRBU 990 filings out there, but found nothing. This leads me to believe that CRBU was not a non-profit, and therefore finding information on it will be difficult.

I haven't found any indication in my research that a Coral Ridge Baptist University still exists.

So I guess the question is: who are these Coral Ridge payments being made to?

R.C. said...
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The Real George Wythe said...

RC -

I seem to recall the foundation being formed in the late 1990s, so they would have been required to do at least a basic 990 filing back then. 2002 is the earliest I can find though.

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The Real George Wythe said...

@ Anon on 9/10:

I suggest you contact an attorney. A decent one I'm acquainted with would be Mark Kohler out of Cedar City. He's actually a couple doors down from GWU.