Bookkeeping was lacking at bankrupt ski society

The Great Northern Ski Society didn't keep careful enough records in the final years that it ran Mount Sima, according to a report released this week.

The Great Northern Ski Society didn’t keep careful enough records in the final years that it ran Mount Sima, according to a report released this week.

Among the key findings of the report, the board of the ski society did not prepare its accounting records accurately or on a timely basis, budgeting for capital projects and operations was not done regularly, and the whole bookkeeping system lacked sufficient “formality.”

The report was commissioned by the City of Whitehorse last year after the collapse of the old society as a way of examining what went wrong, with the aim of helping the hill run more smoothly in the future.

The old society has since been replaced by the Friends of Sima, which ran a successful fundraising drive to save the hill this fall, and broke the all-time record for season passes.

According to the report, things started to go wrong for the society during the 2012/13 year. The society went into that year expecting to earn $227,000 in income and spend only $58,000 on capital expenditures.

Instead, the hill earned only $55,000 that year, and capital expenditures soared to $287,000.

That same year, operating expenditures exceeded revenues plus sponsorship and donations by $730,000.

In all, the board’s deficit that year rose from a planned $245,000 to an actual $961,000 by year’s end.

By the fall of 2012, cash-flow was a serious problem for the society, with bills going unpaid.

The 2012/13 summer was the first year the Wildplay Adventure Park was open at the hill, which the report attributes a large portion of the increased expenses to, especially increased staffing costs.

Opening the park proved to be an unsuccessful venture, and soon the society owed almost $400,000 to the franchise.

Last spring, the society asked the city for $800,000 to cover its debts and help provide funding for future operations. That request came after $3 million in city money – most of it transferred from the federal government – had been given over the previous two years.

After the city refused to continue funding the hill, the society began the process of dissolving, and Friends of Sima formed in an effort to save the hill and keep it open this winter.

Craig Hougen, the president of the now-defunct GNSS, said the society is pleased to see the report out, and not surprised by any of its findings.

“We’re not surprised that they didn’t find any wrongdoing. Obviously we struggled with the reporting,” he said.

Hougen said there were funding problems with the Wildplay park that contributed to it opening late its first summer, and failing to earn the income expected of it.

“We substantially missed the revenue targets for Wildplay,” Hougen said, explaining the shortfall in the 2012/13 summer.

Right now, the old society is in the final stages of settling its debts and dissolving. An outstanding $13,000 in unpaid employee wages has been cleared, Hougen said, and his group is working “daily” with the Friends of Sima to officially transfer all the ski hill’s assets to the new society.

That will happen in the coming weeks, now that the Friends have wrapped up their first season and will have a chance to look at their own season-end financials.

“Until you do the books, you never really know,” Hougen said.

Friends of Sima president Laurie Henderson said she could not comment on the report because it is not related to the new society’s financial situation.

She did say that the old society has been very helpful through the transition to the new society, and provided all the financial information they had to help the Friends run the hill more sustainably.

“We have been meticulous in terms of the financial accounts. GNSS has been quite willing to provide what they had.

“We’ve taken the view that by starting a new society, starting our own accounts, and working up, there is some value in a comparison, but for us, the concern has been how we got money and how we spent money and managing the expenditures for this year,” she said.

Henderson said the new society’s budgeting for next season will take place after they’ve been able to review their own spending for the past season and assess how it went. Formal financials should be available later this spring, but anecdotally she said the season has been great.

“It’s been fantastic,” Henderson said. “We couldn’t have asked for anything better with the weather and the snow. It’s been a great season.”

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