After decades of community service, the Sudbury Action Centre for Youth, better known as SACY, is closing at the end of the month.
An emergency press release sent out by the board of directors on March 12 notes the community shelter and harm reduction agency’s last day of operation as March 31.
“While there are temporary solutions that allow us to continue to serve the community, due to financial pressures, the closure of the agency is presently inevitable,” reads the release. “In doing this, we remain focused on our situation having as little impact as possible on the people who rely on our dedicated staff, who have consistently offered support in meaningful ways, without judgment.”
The board states that during the transition, the board’s primary focus is maintaining the integrity of their mission.
“Meeting people where they are at; advocating, educating, navigating and connecting to support services in a safe(r) environment,” the statement reads.
Though SACY staff have declined to speak with Sudbury.com since we ran articles critical of the operations at the warming centre housed at Tom Davies Square, they have promised Sudbury.com an interview next week.
The City of Greater Sudbury was asked for an interview the morning of March 12. After repeating the request on March 13, Sudbury.com’s request was declined, and a statement was sent instead.
“We have been advised that the Sudbury Action Centre for Youth (SACY) will be closing, but we do not have additional details at this time,” the statement reads. “As outlined in SACY’s letter to media and community partners on Monday, they will be providing more comprehensive information soon. Any questions about the closure should be directed to the SACY board of directors.”
The statement said the city continues to work with community partners “to find immediate interim solutions for youth moving forward,” and they will “provide further updates in the coming weeks.”
As a registered non-profit, SACY was required to make public their audited financial statements. From their public financial records, it appears that there have been financial irregularities since at least 2020.
SACY has published to its website its annual reports for 2019-2020 and 2020-2021. For audited financial statements, with a fiscal year ending March 31, the website includes statements for the years ending March 31, 2020, and March 31, 2022. The fiscal year ending March 31, 2023, is not posted and the fiscal year ending March 31, 2021 links to the same document as 2020.
What’s notable from the 2020 statement is the opinion of the accounting firm of McLelland Crawford Topp, which audited SACY’s financial statement.
In the notes for SACY’s 2020, the accountants state “there is significant doubt about the appropriateness of the going concern assumption” in relation to the action centre’s ongoing operations.
The “going concern” assumption is a financial concept used as part of the accounting standards for non-profit agencies. The going concern concept assumes, based on financial statements, that a non-profit can continue to operate for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of operations.
Based on what McLelland Crawford Topp found when looking at SACY’s numbers, the firm’s opinion in 2020 cast doubt on the organization’s ability to meet its financial obligations.
The financial statement reads “given the operating losses accumulated in the last five years, the organization’s accumulated unrestricted surplus has been eliminated, however the board put forward a motion to transfer the internally restricted funds to cover the accumulated unrestricted deficit as at March 31, 2020.”
The auditor’s notes in the 2020 financial state that management believed at the time that the measures SACY intended to take would mitigate what caused the accountants to question the going concern assumption.
Despite this confidence in 2020, the audited statement for 2022, which was prepared by the firm MNP LLP, which had merged with McLelland Crawford Topp, notes more irregularities in SACY’s financial statements.
“We were unable to obtain sufficient appropriate audit evidence over payroll transactions due to insufficient documentation to support the accuracy and existence of payroll,” the report reads. “As such, we are unable to provide a basis for audit opinion.”
And while fundraising and donations are part of many charitable organizations, the report states the completeness of their documentation, “is not susceptible to satisfactory audit verification.”
“Accordingly,” the statement continues, “our verification of these revenues was limited to the amount recorded in the records of the organization; we were not able to determine whether any adjustments might be necessary to revenues over expenses and fund balances.”
Jenny Lamothe covers vulnerable and marginalized communities for Sudbury.com.
