Financial Statements

For the head of W.R. Grace & Co., signing off on his company's financial statements yesterday under the threat of 20 years in prison and $5 million in fines if the numbers are wrong was a bit like going through customs in some foreign countries. "You know in your heart you have no reason to be nervous, because you haven't done anything wrong," said Paul Norris, chief executive of Columbia-based Grace. "But you see all these people standing around with machine guns and you think, `I hope nobody makes a mistake.

On July 30, The Sun published an op-ed by Mary Alice Ernish, founder of the grassroots non-profit Audit Baltimore, which contained a series of questions about the city's auditing practices. This week, Comptroller Joan Pratt, who oversees the city's auditors, provided responses. • Why have some city agencies not been audited in over three decades? The city's financial statements, which are prepared by the Department of Finance, include all of the expenses and revenues of all city agencies.

On July 30, The Sun published an op-ed by Mary Alice Ernish, founder of the grassroots non-profit Audit Baltimore, which contained a series of questions about the city's auditing practices. This week, Comptroller Joan Pratt, who oversees the city's auditors, provided responses. • Why have some city agencies not been audited in over three decades? The city's financial statements, which are prepared by the Department of Finance, include all of the expenses and revenues of all city agencies.

Recent disclosures about the failure of Baltimore City to conduct regular departmental, agency and program audits in over three decades have informed and enlivened the typically staid City Council meetings. City residents and taxpayers rightfully are seeking answers about exactly how the city spends their hard-earned tax dollars. They are looking for written proof in the form of specific departmental and agency audits to demonstrate that the city is conducting its financial affairs responsibly.

Allegheny Energy Inc., the Hagerstown-based energy company that has been fighting to stave off bankruptcy, yesterday reported a net loss of $632.7 million for 2002 and restated the company's balance sheet for 2001 after completing an accounting review that began last year. The loss was equal to $5.04 a share and compares with net income of $417.8 million, or $3.47 a share, a year earlier, the company said in its delayed annual report filed with the Securities and Exchange Commission. The results included a $586.

AN ORGANIZATION that collects money in the name of Martin Luther King Jr. takes on certain obligations. One of them is full disclosure of its finances.By releasing three years of detailed financial statements on the "Keeping the Dream Alive Committee" last week, its chairman, Annapolis alderman Carl O. Snowden, has fulfilled that obligation to the public. It should have happened earlier.Asking such an organization to disclose its finances was not unreasonable. People attend the annual event thinking that they are making a donation to cover the cost of the dinner and awards.

Baltimore school and city officials yesterday began reviewing fiscal statements released by Education Alternatives Inc., the Minneapolis company that runs nine schools and consults at three others here.City Councilman Carl Stokes, who has questioned EAI's performance, called the information inadequate. Other officials said they'd have to look at the figures before making judgments.At a school board work session Tuesday, EAI officials delivered financial statements and summaries showing that the proportion of its budget spent on instruction in Baltimore has increased since the company began work in 1992.

The Second Epistle to the Corinthians says that those who give to the church must do so willingly and freely, for "God loves a cheerful giver." Yet even the most generous contributor might turn tight-fisted after discovering that the person entrusted to collect contributions to the church is often also the one who takes them to the bank and files the financial statements. And that often leads to widespread embezzlement. Even in church, temptation and opportunity can lead to shocking levels of sin. Just ask the authors of a recent study by researchers at Villanova University.

Less than a third of the cash raised over four years at the annual Martin Luther King Jr. dinners led by Annapolis mayoral candidate Carl O. Snowden has been donated to community organizations, according to financial statements he released yesterday.According to the statements, released after an inquiry by The Sun, the events in honor of the late civil rights leader raised $47,674 from 1991 through 1994.Of that amount, the organizing committee has given a total of $14,981 to more than a dozen Annapolis-area organizations, including the Annapolis Boys and Girls Club, the Black Political Forum and the Anne Arundel County Youth Chapter of the National Association for the Advancement of Colored People, according to the statements.

25 Years Ago* Westminster Mayor Joseph H. Hahn, Jr. and Councilman Donald E. Freeman, Sr., have released financial statements of their respective mayoral campaigns, showing Freeman spent a total of $587.75 and Hahn a total of $426.49. Both filed financial statements with court officials showing their expenditures for the May 12 election in which write-in candidate Freeman challenged incumbent Mayor Hahn, and lost. -- Democratic Advocate, July 7, 1969.50 Years Ago* Dr. William R. S. Denner passed away at his residence in Manchester Monday evening in his 62nd year.

Baltimore's City Council this week voted down a proposed charter amendment that would have required that each city agency be audited every two years. And no wonder; such a proposal may be unprecedented in Maryland. A review of the charters of Anne Arundel, Baltimore, Harford, Howard, Prince George's and Montgomery counties reveals that they have no such requirement. No, in those jurisdictions, the charters require that audits be conducted every year. During the debate on the amendment, Mayor Stephanie Rawlings-Blakeformally requested that the city comptroller's office, of which the city auditor is a part, investigate some agencies, including the Department of Recreation and Parks, whose books have not been audited for decades.

As the Baltimore County Council prepares to take up an ethics reform package proposed by County Executive Kevin Kamenetz, some members say they're wary of a measure that would make it easy for anyone to access their financial disclosure forms. Kamenetz wants to post elected officials' forms online starting in May, a key part of the legislation. Open-government advocates say such disclosure lets citizens easily examine potential conflicts of interest. Now, anyone who wants to see a Baltimore County official's form must go to Towson to pick up a copy of the document.

As a 32 year federal employee, the last 26 years with the Social Security Administration, I disagree with the letter to the editor dated March 8, "Social Security employees deserve a pay cut or two. " The vast majority of SSA employees are hard working and dedicated to their jobs. The employees in the office I work in, the Office of Finance, are true professionals. All of our accountants have a bachelor's degree, and many have an advanced degree. Our employees come to work every day dressed in proper business attire, ties for the men and professional attire for the women.

The head of the Baltimore panel that oversees city officials' financial disclosure requirements has failed to submit her own mandated statements since 2006. Dana P. Moore, a Baltimore lawyer who was appointed to a volunteer position on the city's Board of Ethics in 2004 and became its chairwoman four years later, filed financial disclosure statements in 2005 and 2006, but not before or since, according to a review of City Hall records by The Baltimore Sun. She will be subject to a $250 fine for each of three missing forms.

The Securities and Exchange Commission just launched its Financial Explorer software giving Web users new options to manipulate and interpret financial information filed by U.S. companies. "At the click of a mouse, Financial Explorer lets investors automatically generate financial ratios, graphs, and charts depicting important information from financial statements," the SEC says. "Information including earnings, expenses, cash flows, assets, and liabilities can be analyzed and compared across competing public companies."

Executives with Municipal Mortgage & Equity LLC, the real estate and alternative-energy project financier, tried to reassure investors yesterday that the business is growing and to dispel the perception that it's involved in the subprime mortgage morass. But Chief Operating Officer Charles M. Pinckney warned that the Baltimore company might not file corrected financial statements by the end of November, which had been the goal. The company hasn't filed any financial statements in the past year.

As a 32 year federal employee, the last 26 years with the Social Security Administration, I disagree with the letter to the editor dated March 8, "Social Security employees deserve a pay cut or two. " The vast majority of SSA employees are hard working and dedicated to their jobs. The employees in the office I work in, the Office of Finance, are true professionals. All of our accountants have a bachelor's degree, and many have an advanced degree. Our employees come to work every day dressed in proper business attire, ties for the men and professional attire for the women.

THERE IS a lot of information investors wish they could get from mutual fund companies. The top executive's certification of the fund's financial statements is not part of it. Don't get me wrong. If the Securities and Exchange Commission intends to have every corporate top dog in America vouch for the truth in the numbers, it won't get any complaints from me. It will just have a hard time proving that such a document is actually fruitful and worthwhile for investors. "I don't think a certification would have any substantive meaning for the shareholders of a fund," says Burton J. Greenwald of B.J. Greenwald & Associates, a Philadelphia-based industry consulting firm.

Municipal Mortgage & Equity LLC will be able to file corrected financial statements by the end of November as promised despite the discovery of more accounting problems and the resignation of its chief financial officer, Chief Executive Officer Michael L. Falcone said yesterday. The Baltimore company, a real estate and alternative-energy financier known as MuniMae, has experienced several setbacks during a lengthy review of its accounting. As executives try to get the numbers right, they have repeatedly uncovered weaknesses in accounting procedures, and now CFO Melanie M. Lundquist is leaving for another job. Nonetheless, Falcone sounded upbeat in an interview yesterday.