Building Leadership in Financial Management Issues Review the assignment, Consider the situation of Earnest Educational Endeavours (EEE), an organization approved by the Canada Revenue Agency to operate as a charity in Canada. EEE is in its third year of operations. EEE provides childcare and educational services to children of unemployed parents who are looking for work in the town of Endeavour. EEE is board-governed, and Ms. Beatrice Fuddled and Mr. Conrad Fused are the financial management team of EEE. Last year, EEE raised $10,000 (net) from its fundraising event. This year, EEE raised $15,000 (net). Mr. Fused attributes the success of this year's event to three decisions: (1) the decision to provide a meal (value $40) with each ticket to the fundraiser; (2) the decision to provide childcare services for the evening at the venue, enabling greater attendance; and (3) the decision to share the fundraising event with another event being hosted for the benefit of the Green Party of Canada. Mr. Fused approved the sharing of venue arrangements and costs because EEE's operating principles restrict the agency to using organic supplies in its childcare services and to recycling products as much as possible. Community members at the fundraising gala agreed the two organizations are closely linked in shared values. Since the fundraiser, Ms. Fuddled has issued tax receipts to 120 community residents for $100 each for the $100 price of the ticket. Other income from the night was received as proceeds from a silent auction and the sale of 50-50 tickets. Ms. Fuddled has also agreed to provide parents with a $35 tax credit if they paid for the childcare services provided for the night at the venue. This is thought to be the fair market value of the service, given community standards. Sixty parents paid for the childcare, resulting in a total of $2,100 in tax receipts being issued. In discussing the year, Mr. Fused and Ms. Fuddled note that EEE was more profitable this year than the previous year. They are celebrating that this year's stronger financial position could mean that the disbursement ratio will drop from 85% to 72%, and there will be money available for new furniture. Questions: You are the new director of financial management for EEE, starting today. Your phone is ringing, and "Call Display" indicates the call is from the Canada Revenue Agency. You wonder what that might be about.During the call, you make a list of concerns that need to be addressed. What do your notes say? Do you tell the Board about the phone call? Congratulations on your new job, by the way!

1

1

0