September 15, 2019

Money Well Spent

Kamp KPMG Will Officially Be Called KPMG Lakehouse, According to Over-the-Top Teaser Video

KPMG released a one-minute video yesterday teasing KPMG Lakehouse, its new $450 million training and development center that is scheduled to open next January in the Orlando community of Lake Nona. And woo-boy, is it cheesy—replete with uplifting music, black turtlenecks, people using tablets, selfies, and the sun glistening off the water. Located on a […]

KPMG Planning a Training Center That Will Surpass Deloitte University in Ridiculousness

Here's a report out of the Orlando Sentinel that KPMG is considering Orlando as a site for a mega training facility and conference center. The location isn't so much of interest as is the fact that KPMG is planning a $430 million, 800,000 square-foot campus. If you're wondering if that's bigger than Deloitte University, the […]

Partners Hate Nothing More Than Employees Skipping Training Because They’re Working, Nursing a Hangover

Here's an interesting email that was forwarded to us late last week. It's from a peeved partner and we've removed the particulars since the message strikes us as universal among larger public accounting firms.     From: [Regional Partner In Charge of Assurance]   To: [Whomever it may concern] Cc: [Office] Leadership Team Subject: Respect […]

Why Did Prometric Get Fined $300,000 by NASBA in 2010?

David A. Costello, CPA, President & CEO and Michael R. Bryant, CPA, CFO of NASBA jointly and severally stated that NASBA’s 2010 financial statements did not contain any untrue material statements and their auditors, Lattimore Black Morgan & Cain, PC seconded that so obviously the following is all accurate. We looked ourselves. Not being professional financial statement ninjas, however, we invite you to take a peek for yourself here.

The good news for NASBA is that total consolidated revenue in Fiscal 2010 was $33.7 million compared to $31.4 million in Fiscal 2009, an increase of 7.3%. There were more CPA exam candidates as well as a new state added to NASBA’s CPAES program, which does the work of state boards of accountancy by processing CPA exam applications.


Interestingly, though my grandparents have been eating Alpo for the last two years thanks to Ben Bernanke and I’m earning a little under half a percent on my savings, NASBA must have a good investment banker because they did pretty well for themselves in FY 10. The annual report states that revenue from escrow management fees related to the CPA exam increased over the prior year and that higher interest rates, on average, during FY 10 were earned on these funds which are held in fully-insured securities or interest-bearing accounts. Can someone please let me know where these accounts are?! I want in.

But the most interesting part of NASBA’s mostly dull financial statements is the $300,000 “fine” Prometric paid them for violating its CPA exam agreement. Yes, the same agreement that was just renewed through 2024 with much fanfare last year.

The item is reported as “Income from Contract Issue” on NASBA’s consolidated financial statements and buried in note 12 thusly:

Note 12. Income from Contract Issue
As a part of the initial CBT Services Agreement effective May 31, 2002, Prometric was required to obtain and maintain insurance policies for certain specific perils, coverage amounts, terms and conditions naming the Association and its member boards as additional insureds. During fiscal 2010, the Association asserted that Prometric failed to comply with certain applicable insurance requirements. Prometric denied the assertions but, in resolution of the matter, provided evidence that it had come into compliance, agreed to indemnify, hold harmless and defend for any coverage lapses, and paid $300,000 to the Association. In addition, Prometric reimbursed the Association for certain legal and administrative expenses related to the resolution.

It doesn’t appear that NASBA declared the legal and admin expenses it also received so we’re assuming they were either immaterial or just embarrassing. Any financial statement detectives are welcome to come to their own conclusions.

Spending $1.25 Million on Bridges for Squirrels Isn’t the Worst Idea Arizona Has Ever Had

Okay, so Arizona is spending $1.25 million to build bridges for the endangered Mount Graham red squirrel and of course a bunch of people are in a big huff.

ABC News reports that without the bridges, approximately five squirrels would be killed a year and there are only 250 are known to be in existence.


Yes, that works out to $5,000 a squirrel but considering the fact that animals are far more responsible and respectful inhabitants of the planet than humans, we’ve got no beef with this.

Especially considering the fact that Arizona has had far worse ideas in its history including opposing Martin Luther King Day until 1992, its asinine immigration policy and the Phoenix Coyotes.

Arizona Spends $1.25M to Save 250 Squirrels [ABC News via Tax Policy Blog]

Top Ten Worst Administrative Expense Offenders in the Non-Profit Sector

Administrative expenses are a part of any non-profit’s overall operating expenses and though donors generally give to charity with the hope that their contributions will help fulfill the organization’s mission as opposed to cover SG&A, Charity Navigator has a top ten of the worst offenders when it comes to admin expenses. Let’s take a look, shall we?


10: Center for Individual Rights 46.1%
9: Changed Lives 47.4%
8: Vision New England 48.7%
7: Charleston Area Medical Center Foundation 48.8%
6: National Museum of Racing and Hall of Fame 55.1%
5: Cherokee National Historical Society 58.2%
4: Union Rescue Mission Little Rock 62.1%
3: National Council of Negro Women 64%
2: Boys Choir of Harlem 66.3%
1: American Tract Society 68%

For its last available income statement through Charity Navigator, the American Tract Society brought in $2,194,730 and spent $1,615,847 on administrative expenses, compared to $711,854 in program expenses and $47,210 in fundraising expenses. This is twice what the charity spent the year previous on admin expenses.

The American Tract Society’s mission is to distribute religious literature to spread its message. Well actually its mission is officially “to make Jesus Christ known in His redeeming grace and to promote the interests of vital godliness and sound morality, by the circulation of Religious Tracts, calculated to receive the approbation of all Evangelical Christians. The mission of ATS is to provide relevant tools for presenting the gospel.”

Perhaps someone needs to say a prayer to St Matthew asking for a little accounting help.

By comparison, similar charity Bibles for the World, based in Colorado, spent only 6.4% of its $4,215,202 in revenue on administrative expenses in the same period.

The second worst offenders on the list, the Boys Choir of Harlem, spent $140,787 out of $299,729 in total revenue on administrative expenses in 2007. At that point, the charity was nearly $4 million in the red and has since ended. The group spent 30 years bringing the joy of music to at-risk inner-city youth and the choir had performed for sitting presidents since Lyndon Johnson.

Would-be donors are welcome to peruse Charity Navigator for detailed information on just about every charity in the country before making donations, lest that $100 feel good gift end up paying mostly for secretaries and prime office space.

Ernst & Young Updates

We’ve updated the E&Y Greensboro post to include the approximate number of professionals affected plus we’ve added an additional ball of useless to the tchotchke collection. Continue to keep us updated on both.

At One Point, Ernst & Young Was Handing This Stuff Out

Today in money well spent news, we bring you items from a care package that was sent to GC from a friend:
E&Y_DonKing.jpgEY_DK.jpg
Can anyone explain the purpose of this particular item? More pics after the jump.


SUN.jpgEY_Sun.jpg
This item also has no discernible use.
pen_hair.jpg
Um.
Anyone want to venture a guess on how much money is spent on this stuff? It’s got to be enough to foot an open bar. If you have more useless stuff that makes you question your firm’s spending habits, kindly pass them along and we’ll throw up the most useful items.
UPDATE: The most recently submitted ball of useless:
EY Ball of Useless.jpg

Deloitte’s Version of Delta Chi Breaks Ground Tomorrow

Presumably this new $300 million, 800 room facility in Westlake, Texas will help centralize the destruction caused by Deloittians when they attend various training sessions. If you’ve got any additional details or opinions on this new Mecca in the Deloitte universe, kindly enlighten us.

Is KPMG’s Song Writing Team the Same as E&Y’s?

8ball.jpgNo doubt that you remember E&Y’s Grammy-worthy attempt at a theme song/torture method from last week.

We have now discovered that KPMG also thought this was worthy of the firm’s resources. The only problem we find is that the songs sound oddly similar in melody, atrocious use of harmony, etc. This kind of artistic double-agentry between the firms only reaffirms are suspicions about the firms working together in some sort of oligopolic conspiracy of which the purpose is, we haven’t figured out, except maybe to perpetuate the use of Excel.
After the jump, we’ve provided links to both songs here so that you can provide your expert analysis on which firm has the best song. And by best, we obviously mean drives you to agony similar to Alex DeLarge/Beethoven-esque levels. In addition, feel free to provide your favorite lyrics in the comments.

The Creative Geniuses at E&Y Do It Again


We really have to hand it to some of the creative minds at E&Y. The quality of what they produce is overwhelming. All this and they ban Pandora? We’ll never understand accounting firm reasoning.
Anyhoo, the offbeat clapping is one thing, Zitor is quite another, but now we present you with the following:

Who Knew that E&Y had a Creative Art Department?

Zitor.jpgToday, in how your firm spent your bonus news, we present you with Zitor, an alien who somehow ended up in Uncle Ernie’s shop. Zitor then ended up being assigned a counselee for year-end reviews which is fairly realistic considering his lack of expertise and work experience.

Zitor was apparently designed and plugged into the Ernstiverse to demonstrate how to be completely unprepared for a the year-end review process as a counselor.


What’s odd is that most counselors seem to be using logic from another planet so it’s not outside the realm of possibility that this was based on actual methods used.

Regardless of the genesis of this idea, it probably goes without saying that this had to be complete and utter failure for those of you with maturity levels above the age of 13. Nevermind that no one can decipher how accounting firms determine who the best performers are anyway.

Included with this frivolous attempt to relate to the troops, if you were so inclined, you could submit ideas for the line below from Zitor to end up in the next video for this “Coach from Another Planet”. While that sounds incredibly lame and worthy of our ridicule, we’ve decided to let you take a stab at it instead.

The line has been modified slightly to allow your much more creative suggestions to be submitted in the comments:

At E&Y, we do not give feedback. We give ___________.”

Do your worst.

Today in Big 4 Thriftiness

soda machine.jpgOur post from yesterday re: PwC’s concern over your consumption of high fructose corn syrupy beverages has struck a nerve with some.
So, being big believers in striking while the iron is hot, we thought we’d tell you that about a tip we received telling us that KPMG has also recently raised the price of soda in their offices from 50 cents to 75 cents.
Thriftiness continued, after the jump


We also learned that any perks, luncheons, birthday cakes, etc., etc. that do not benefit the entire office have been eliminated. Gourmet coffee machines apparently still remain because the coffee drinkers will not settle for freeze-dried Taster’s Choice.
Bottom line seems to be one of two things: 1) The firms are squeezing pennies until Lincoln’s beard pops off or B) The powers that be are faux-concerned about the reality of you sitting on your asses for 12+ hours a day and are attempting to get you to cut down on the calories.
Discuss your firm’s favorite cost cutting measure, unique revenue ideas, or your plans for losing the Big 4 fifteen in the comments.

Ernst & Young Opted for Smooth Jazz

It appears that this from back in ’01 but for the love of God, who’s bright idea was this? We apologize for the small screen, we spent the better part of our morning trying to find the full size.