Finances & Taxes

1 Timothy 6: 10 - 11

10 For the love of money is a root of all kinds of evil. Some people, eager
for money, have wandered from the faith and pierced themselves with many griefs.
11 But you, man of God, flee from all this, and pursue righteousness,
godliness, faith, love, endurance and gentleness.

Small Victories
2003-2008 Tax Return Analysis

Summary
After analyzing Small Victories’ tax returns for 2003-2008,
there are numerous inconsistencies, and things that simply
don’t add up. Money is missing and unaccounted for in
multiple years.

If Small Victories would claim that these numbers are
just lies, then why did they submit them to the IRS?
Why did Small Victories' Treasurer sign the returns?

Each tax return linked below is labeled available for
public inspection, and can be independently verified
with the IRS or through an organization like Guidestar.org.
If there are any factual errors in this analysis, please
submit corrections and they will be changed.

Now is your opportunity to inspect:

Go to Guidestar.org to see the records for yourself.

Or go to the IRS.gov website and download a
form 4506-A
to get your own official copies.

The analysis below was completed by a Missouri CPA.

2004 Issues

1.) Beginning of the year net assets/fund balances were reported at $22,000.
This is inconsistent with 2003 end-of-year net asset/fund balances of $3,019.97.
The end-of-year balances from 2003 should equal the
beginning of the year 2004 balances.
They are more than $18,000 off here!!

Is this just negligent accounting, or is there more to it?

There are additional discrepancies between
12/31/03 and 1/1/04 balances.

2.) Taking a closer look at what they put down for their
vehicles, it is difficult to make any sense with what they
reported.
Their 1/1/04 liabilities were $22,000. They made a total
of $9,560 in payments toward the truck (2003), van
(2003), and RV (2004), and they reported ending liabilities for the
van and RV at $12,000.

How can their liabilities go down $10,000 when
they only made $9,560 in payments?

3.) Total liabilities and net assets/fund balances were
reported at $23,541.11 at the beginning of the year
AND at the end of the year.
This doesn’t seem realistic at all.

Did they just put a number in there that looked good?

4.) Their end of year cash at 2003 was $1,019.97.
Their net Excess for 2004 was $1,541.11. If you add
these together, they should have ended up with
$2,561.08 of cash at the end of the year.

They reported $2,290.

What happened to the rest of the money?

5.) They claimed to have helped 566 women during
the year.
They spent $7,413 on supplies and groceries. This
comes out to $13.10 per woman this year. This is down
over 40% per girl from the year before!

According to one study for 2005, it shows that it costs
an average of $30.81 to care for one child for one day*.

* Cost of Raising a Child National Study

2003 Issues

1.) 2003 listed $464 in CASH contributions, and
$48,498 in non-cash (line 1d).
Also, they reported starting the year with $526 in
cash (line 46).
This means they had only $990 in cash to use for
the ENTIRE YEAR without selling something.
On the Statement of Functional Expenses
(Part II, line 44), they had a total of $48,487.53 in
expenses.
How did they pay for this if they only had $990 in cash
to use?? The only items they list that could have
reasonably been paid with non-cash expenses would have
been Supplies (they reported $4,781.05) and Dinners and
Groceries (they reported $6,530.35).

What did they use to pay the rest of the $37,176.13
of expenses?

2.) One pro-lifer who worked closely with them that year, estimated Small Victories went to approximately eleven to
twenty events held for their benefit.
How can they go to so many events like this and only report receiving $464? That comes out to roughly $20 - $50 per
event if they received nothing else during the year!
What happened to the rest of the money that people
gave them at these events?

3.) They reported $1,960 in van payments and $2,160 in
truck payments.
Someone who worked closely with them that year said the
truck was used often for personal use.
If this is so, did they reimburse the ministry for this portion
of use?
Was the $5,259.39 in reported gasoline expenses
all for the ministry?

4.) On page 2, they claim to have helped 451 women that
year with “clothes, food, formula, baby items, counseling,
find jobs, housing.” The only items on page two that would
fit these categories are Dinner and Groceries and possibly Supplies. Doing the math, this averages out to $25.08 per
girl for the year. This seems very low and unreasonable. especially considering one study for 2005 shows that it
costs an average of $30.81 to care for on child for one
day*.

Also do they have a record of the 451 women?

How do they know it was 451 if they don’t have a record?

5.) Their current assets show a van ($9,000) and a truck ($13,000).
Their liabilities also show $9,000 and $13,000 for the van
and the truck.
According to their expenses, they made $1,960 for the van payment, and $2,160 for the truck payment.
How can they make these payments during the year, and
the liability for these vehicles remain the same as their
purchase price?
The liabilities for these should be going down as the
principal is paid off.

If these liabilities are erroneous, then another part of the
balance sheet is too.

6.) If the non-cash assets of $48,498 were something like a stock donation that was sold, where are the records for this,
and was it accounted for correctly?

7.) Their cash on 1/1/03 was reported at $526.
They reportedly received $464 in cash during the year.
These total $970.
Their cash balance at end of year was $1,019.97.
Where did they get the extra cash?

8.) Line 73 of the return is supposed to equal lines 70-72
(or 67 through 69 which are all 0).
70-72 total $1,019.97.
Line 73 = $3,019.97.

Where is the additional $2,000?
It looks like this number was plugged in to make the calculation seem to work rather than using actual numbers.

2005 Issues

1.) The net assets at the end of 2004 were $23,541.11.
Their assets at the beginning of 2005 were $1,541.11.

What happened to the $22,000 in assets?

Did they sell the vehicles during the year?

The vehicles, and all furniture are not listed on end of year balances at all. Where did the assets go??
The only thing listed is $451 in cash.

2.) They ended 2004 with $2,290 in cash, and in 2005
had an excess of $451 of receipts over expenses.
They should have ended the year with $2,741.
They reported only $451.
Where is the missing $2,290 in cash??

3.) They report no liabilities at both the beginning of the year
and at the end.
However, they reported $12,000 at the end of 2004 for the vehicles.
What happened with this?

4.) They claimed to have helped over 850 women during the year.
They spent $9,938 on groceries, dinners and supplies.
This comes out to $11.69 per woman.
This is even lower than 2004.

2006 Issues

Page 1 of Tax Return
They showed beginning of year assets at $1,992.
2005 end-of-year assets were $451.
What is going on here?
Are they pulling the numbers out of thin air?

They show an excess of $2,334 in assets for the year, and
their ending assets to be $2,334. How can this be when
they showed $1,992 at the beginning of the year.

Where did the $1,992 go?

Their net assets are greater than their gross assets (line 27). Their net assets are supposed to be their assets less their liabilities. How can it have increased? It appears they just forced the total to balance to what it should have been, even though the cash didn’t match.

Also, how can they have no liabilities (line 26) and still have vehicle payments (from expense detail attachment)?
Are they leasing them?

2007 -2008 Issues and Summary

Rather than focus on the dollars and cents for these years,
let’s take a look at another aspect here. Small Victories' Treasurer claimed to help the ministry an average of 30 hours per week during 2007 with no pay, and 40 hours per week during 2008.
And while working this many hours per week is commendable
if God has called you to it, that does not leave much time for providing for a large family. How did they support their large family during that time if the ministry did not give them
anything?? How much money per year would it take to feed
and clothe a family of that size, with let’s say four - six
vehicles, and to maintain a nice house?
$50,000? $60,000? $75,000?
Are we to believe that he did this on wages working part-time
as a waiter working in Highland? Or maybe the Michaels are independently wealthy, and have another source of funds
that most people just don’t know about?

If they are independently wealthy, then why are they so
sensitive when people question the ministry finances?
Why have they repeatedly gone into attack-mode when
people would even question what is supposed to be held
open for public inspection?

Are they willing to be transparent with their finances to their supporters, or if anyone would ask them about this, will
they be met with hostility? Many ministries are very open
with their finances. You can just ask for a statement of the ministry's finances, and they will give it to you. If God
provides for the Michaels then, why shouldn’t they be
open?
What do they have to hide?

All tax information (990 EZ, Organizing Documents, etc.)
are available for public view from guidestar.org or directly
from the Internal Revenue Service by filling out and filing a
form 4506-A with the Internal Revenue Service.

We therefore challenge anyone who doubts the veracity
of the documents and statements made here, to check these resources for yourself.