Gillespie Fund Interim Audit report public as of 3/6/2014

[solajijic]

Audit and Advisory Committee Gillespie Fund Interim Audit

March 6, 2014

Audit Justification

No review has been done in the four plus years since the sizeable Gillespie Fund was established.

Scope

Review all expenditure from the Gillespie Fund for the past four plus years.

Review all activity involving the Gillespie Fund from April, 2009 through November 2013.

(A). WHAT ARE THE RESTRICTIONS ON THE GILLESPIE FUND?

FINDINGS OF FACT:

Jane Fullerton Gillespie in a life insurance policy with New York Life Insurance Company designated as secondary beneficiary “The Lake Chapala Society A. C. English Language Library, Book and Equipment Purchase Funds”.[1] The primary beneficiary predeceased her and as a consequence the bequest went to the secondary beneficiary. The New York Life Insurance Company sent a check to The Lake Chapala Society in the amount of $63,378.88 USD in April 2009. Before receiving the check Bonnie Kleffel, an English Language Library volunteer familiar with the situation asked Hugh Fullerton, brother of Jane Gillespie and executor of her estate the following question in an email, “Do you know, does the policy name “Lake Chapala Society” or “Lake Chapala Society Library”. It seems to me that saw that it named the Lake Chapala Society Library.” Fullerton replied to Bonnie by email and answered her question saying in pertain part, “The policy beneficiary actually reads ‘The Lake Chapala Society A.C., English Language Library, Book and Equipment Funds’. That seems pretty specific . . .”

The Society recorded the payment as a restricted fund and named it The Gillespie Fund.

An ad hoc committee, known as The Gillespie Committee, was formed consisting of seven members and two representatives of the Board at that time. The Committee’s purpose was to “develop a new vision for the English Language Library, present guidelines to the Board for the use of the Gillespie donation and develop a preliminary budget”. The committee took guidance from the wording in the insurance policy and conversations with and an email from Hugh Fullerton (brother of Jane Gillespie) in order to come up with recommended guidelines for how the bequest should and should not be spent. The Committee’s report was submitted to the Board on May 13. 2009. The Lake Chapala Society’s Board of Directors voted May 13, 2009 to:

• accept the Gillespie Funds in accordance with the terms of the policy and terms in an email from Hugh Fullerton,
• vowed to be good stewards of the money,
• and to use the money per the recommendations of the Gillespie Committee with one change: that investment interest could not be used for modifications to facilities, remodeling or expansion of the English Language Library.

(The important points of the motion are set forth above. Full text of the motion can be found in Appendix A)

In the minutes of the Board meeting on June 10, 2009 President Nancy Creevan acknowledged that the bequest by Jane Gillespie was to the Lake Chapala Library.

REASONING AND CONCLUSION:

The terms Jane Gillespie used to designate the beneficiary are clear and unambiguous. The beneficiary was the English Language Library at Lake Chapala Society with the restriction that the money be used for purchasing books and equipment for that library. The words Lake Chapala Society A.C. and English Language are words describing the library that is to receive the bequest. The Lake Chapala Society had several libraries at the time. The Lake Chapala Society operates the English Language Library and therefore received the bequest as trustee for the beneficial use of the beneficiary, the English Language Library.

The bequest comes to the designated beneficiary according to the terms in the insurance policy. The language of the bequest cannot be interpreted to provide any discretion for expenditures from the Gillespie Fund for anything other than purchasing books and equipment for the English Language Library. Neither Hugh Fullerton, the Gillespie Committee, nor the Lake Chapala Society Board of Directors has the legal authority to change any of the terms in the insurance policy designation of beneficiary or purpose. Therefore any opinions expressed by Mr. Fullerton, recommendations made by the Gillespie Committee, or decisions of the Board, that seek to establish terms and conditions that are not within the scope of the terms in the policy are gratuitous and of no legal effect.

(. GILLESPIE FUND INVESTMENT INTEREST USED FOR PURPOSES NOT IN ACCORDANCE WITH THE TERMS OF THE RESTRICTIONS ON THE GILLESPIE FUND.

FINDINGS OF FACT:

LCS received the check from New York Life in April 2009. An email discussion followed concerning how many names should be on the account that would hold the money and what the name should be on the “endowment account”. Terry cautioned that all be clear on whether the entire gift was to go into an endowment fund with interest accumulating or into a restricted fund and available for use immediately. He addressed how investment interest would be handled when the funds were in a restricted fund. He stated, “In general, in non-profits, endowments are set aside as restricted funds, where the principle is invested, and the interest income is either rolled over, or budgeted for (in this case the LCS library) support. . . .”

Gillespie Fund money was co-mingled with other funds held by the Lake Chapala Society and invested with Actinver. The Board’s decision dated May 13, 2009 directed that Gillespie Fund investment interest would be used as follows:

• “Primary Purpose: Reading material including books, magazines, and newspapers
• Furniture and equipment: computer equipment for library use, tables and chairs, electronic reading devices such as E Readers, shelving.”

In the spring of 2013 the Audit and Advisory Committee determined that the interest on Gillespie Fund money had never been and was not currently being applied to the Gillespie Fund as required. The Board took steps to credit interest from investing Gillespie Fund money from April 2009 through June 2013. However they did not accurately determine the amount due. It was reported that because of the way Actinver reports returns on invested funds, including Gillespie Fund money, it is difficult to determine the correct amount of interest earned by Gillespie Fund money after the fact but that does not relieve the Lake Chapala Society of the responsibility and obligation to do it properly. The amount credited did not include interest on the interest had it been properly applied all along. Accounting for investment interest on Gillespie Fund money would be easier if the Gillespie Fund money were held in a separate account and not co-mingled with other Lake Chapala Society funds restricted or otherwise.

The Board in a decision made July 11, 2013 voted to rescind the part of the 2009 Board decision regarding how interest earned on the Gillespie Fund money would be used. Thereafter investment interest earned on Gillespie Fund money was applied to a newly named “non-restricted investment” account and available for any use at Lake Chapala Society. At the same meeting the Board adopted Policy F-9 Interest Earned on Restricted Funds. (See Appendix The policy stated as follows:

“It is the policy of LCS that all interest earned on restricted funds be assigned to non-restricted investments. All donors of restricted funds will be strongly encouraged to assign all interest earned on restricted funds to go to non-restricted investments.”

Later in 2013 the Board adopted three financial policies relating to acceptance of donations. None of those policies purported to modify or rescind any policy in effect at the time.

REASONING AND CONCLUSION:

There can be no doubt that the bequest was to the English Language Library. The bequest was not specific as to the interest but it was very specific as to who the beneficiary was. It then follows that because the bequest was to the English Language Library, it was not to the Lake Chapala Society. The Society is the trustee. As trustee it has no claim on any of the money that was bequeathed or any yield from investment of said money. The terms of the bequest did not provide for any fees for the trustee so none can be paid. The Executive Director Terry Vidal acknowledged that investment interest on the restricted Gillespie bequest belongs to the program it was given to, the English Language Library.

The Board in May of 2009 accepted the proceeds of the Gillespie insurance policy and voted to use the interest earned on investing the money solely for the English Language Library and for a purpose within the Gillespie Fund restrictions. This provision was not implemented until July of 2013 when the Board voted to implement the prior decision retroactively only. That decision did not require compliance with the spending restriction going forward in time. To rescind that decision and use the interest for purposes not within Gillespie Fund restrictions is improper and a breach of the Board’s fiduciary duty owed to the beneficiary, the English Language Library.

The reasons given for rescinding the 2009 decision regarding Gillespie Fund investment interest and for Policy F-9 Interest Earned on Restricted Funds were that all other restricted funds given to the Lake Chapala Society did not have the interest restricted, that the Lake Chapala Society wanted all restricted fund interest to be handled in the same way, and that the Lake Chapala Society needed the money to offset the cost of administering restricted funds such as the Gillespie Fund. None of these reasons can justify not adhering to the Gillespie Fund restrictions

The restrictions on the Gillespie Fund money and investment interest can not be changed modified, or eliminated by Board action, including adopting policies that require that Gillespie Fund money and/or investment interest be used or handled contrary to Gillespie Fund restrictions.

General principals governing the fiduciary duty of trustees require the trustee keep trust property separate from other property. To comply with such a duty LCS would need to hold all the Gillespie Fund principal and interest in a separate account.

As stated above the Board is constrained from using Gillespie Fund investment interest according to the terms in the bequest itself. When the Board received the Gillespie bequest it accepted it with several important self-imposed restrictions, in particular, that the investment interest would be used solely for the English Language Library. When the Board some four years later rescinded the part of the motion dealing with investment interest they changed one of the material terms of acceptance. Doing so was arguably unethical. Also prospective donors could view this act as a reason not to donate money to LCS because no matter what the Board might agree to at the time they accept the donation; they have demonstrated they will not be bound by that agreement tomorrow if the Board feels their needs have changed.

RECOMMENDATIONS:

1. The Board vacate the decision made July 11, 2013 that stated as follows “Rescinding 2009 Board decision regarding interest earned on the Gillespie Fund”, and apply investment interest earned from Gillespie Fund money in accordance with the decision of the Board dated May 13, 2009, and continue to do so in perpetuity.
2. The Board direct the Treasurer of the Lake Chapala Society to take immediate steps to credit all interest that would have been earned from investing Gillespie Fund money to the Gillespie Fund that has not already been credited, as if it had been done all along, including interest on interest earned.

Direct the Treasurer to put in place accounting procedures to ensure that all interest from investing Gillespie Fund money in the future are identifiable and accurate and credited solely to the Gillespie Fund. The Lake Chapala Society hold Gillespie Fund Money, including earned interest, in an appropriate account separate from any other accounts maintained by the Lake Chapala Society now and in the future. The Board clarify the applicability of Policy F-9 Interest Earned on Restricted Funds as it applies to the required treatment of investment interest from Gillespie Fund money, and other funds with restrictions on investment interest, and revise as necessary.

©. EXPENDITURES OF GILLESPIE FUND MONEY WERE MADE FOR PURPOSES THAT WERE NOT WITHIN THE TERMS OF THE RESTRICTIONS ON THE USE OF GILLESPIE FUND MONEY.

FINDINGS OF FACT:

The Committee analyzed all expenditures for the English Language Library from April 2009 through June 2013. There were a significant number of expenditures from the Fund that were for purposes that are not within the Fund restrictions. There were also several that were for purposes that the Board explicitly stated the Fund money was not to be used for. . Gillespie funds not to be used for: “D. Operating expenses such as salaries, office and book supplies, utilities, facilities maintenance and repair, cleaning.” Many of the amounts shown can by paid using Gillespie Fund money. Where purpose is unknown the assumption is that due to a lack of documentation showing it is for a purpose within the Fund restriction it is NOT for said purpose. (See Appendix C)

The AAC investigators found incomplete and missing information in the records for expenditures from the Gillespie Fund in 2009. The Executive Director did not respond to their request for the missing information. The records as a whole for accounting for the use of Gillespie fund money are a mess. Documentation is missing or incomplete. Checks are missing. The state or the recordkeeping shows a marked disregard for the standard of documenting all transactions required by the Constitution of LCS. In the comments to the first draft of this report the President and the Executive Directory claimed that all the records are complete and that all requests for information were responded to but the AAC investigators did not find that to be the case. Furthermore the AAC investigators requested a meeting with the Executive Director to resolve the discrepancies between what the Board claims are the facts and what the AAC found to be the facts. The AAC investigators were rebuffed.

With regard to the listings in Addendix C: Column B are the items that, when presented with the draft of the report, the President of the Board listed them as “Perhaps questionable” (13.5% of the total in question). Columns C are items that are still in question but could be verifiable. (5%) Columns A are items that have not been verified with questions unanswered because the Executive Director referred the questions to the Finance Coordinator (80.03%). The Executive Director is the one who has ultimate responsibility for all of the data input and the person who is responsible for personally responding to the AAC investigator. Since he has not deemed it necessary to respond this report will be issued without the possible benefit of the information he might have been able to provide.

REASONING AND CONCLUSION

To comply with the Board’s 2009 decision regarding the Gillespie Fund, none of the amounts designated with an asterisk should have been paid using Gillespie Fund money.

None of the other amounts can be paid using Gillespie Fund money because they are not expenditures for books or equipment for the English Language Library. Books in Spanish by definition can not be paid for using Gillespie Fund money.

Where no Gillespie Fund purposes were recorded in the accounting vouchers the assumption must be that the expenditure was not appropriately debited to the Gillespie Fund.

Where the expenditure involves a system where part is used by the Lake Chapala Society for purposes other than for the English Language Library (highlighted in blue) only that portion for the English Language Library use can be debited to the Gillespie Fund.

RECOMMENDATIONS:

1. That the Board direct the Treasurer to determine the percentage of shared items paid for with Gillespie Fund money that were used for non-English Language Library purposes and credit the Gillespie Fund with a proportionate amount of the purchase price for that use.

1. That the Board direct the Treasurer to credit to the Gillespie Fund all amounts that were improperly debited to the Gillespie Fund as shown in the findings above.

1. Direct the Treasurer to adopt procedures to insure that Gillespie Fund money is used solely for purposes within Gillespie Fund restriction and to furnish a report monthly to the Audit and Advisory Committee until directed by the Audit and Advisory Committee to do otherwise giving details for all expenditures using Gillespie Fund money.

(D). THE LAKE CHAPALA SOCIETY HAS REPRESENTED THAT IT CAN USE GILLESPIE FUND MONEY FOR CAPITAL IMPROVEMENTS.

FINDINGS OF FACT:

The President of the Lake Chapala Society announced at the September 2013 Board meeting that the Lake Chapala Society had 10 % of the 1.5 million U S dollars needed for a proposed capital campaign. At the time of the President’s announcement the total of 150,000 USD could only be arrived at by using the unused balance of the Gillespie Fund, other discrete Lake Chapala Society funds, and unspent general revenue on hand at the time.

REASONING AND CONCLUSION

The Lake Chapala Society cannot use Gillespie Fund money for capital improvements and representing that it can is false and misleading. The law governing insurance contracts allows

for an insurance contract to provide for forfeiture of a bequest if restrictions on the bequest are not adhered to.

RECOMMENDATIONS:

1. The Lake Chapala Society cease representing Gillespie Fund money can be used to fund capital improvements, including renovations to or construction of library buildings.

2. The President of the Lake Chapala Society immediately notify the Board in an open meeting, with it so stated in the Board minutes, that his announcement about including Gillespie Fund money for capital projects was incorrect; that Gillespie Fund money cannot and will not be used for capital improvements because those uses are not within the Gillespie Fund restrictions.

(E). THE BOARD IS OBLIGATED TO IMPLEMENT THE RECOMMENDATIONS OF THE GILLESPIE COMMITTEE

FINDINGS OF FACT:

When the Board voted May 13, 2009 to accept the Gillespie bequest in the same motion they voted to accept substantially all of the recommendations of the Gillespie Committee. Those recommendations were summarized in the Board minutes for the meeting and attached to those minutes.

The 2009 Board voted on a course of action for the English Language Library that was to be funded by the Gillespie bequest. Only uses within the Gillespie Fund restrictions can be funded by Gillespie Fund money. There has been no Board action since that makes any change in that decision, except for the one concerning Gillespie Fund investment interest in July, 2013. Neither the President nor the Executive Director has the authority to choose not to implement a decision made by the Board of Directors.

Strategic goals established for the English language Library in the years following the Gillespie bequest called for implementing many of the provisions in the Gillespie Committee recommendations in 2009 but they were also not acted upon even though the English Language Library had Gillespie Fund money available to fund many of the goals that were within the Gillespie Fund restrictions. (See Appendix D)

The Executive Director repeatedly stated that the Lake Chapala Society could use the Gillespie Fund money any way it wanted. English language Library volunteers were instructed not to use the Gillespie money because it was being saved to build a building. English Language Library volunteers were told they needed the Executive Director’s permission to spend Gillespie Fund money. (See related English Language Library Operation interim audit findings)

REASONING AND CONCLUSION

The Board cannot support taking a position that it could chose to spend the Gillespie money or not as it saw fit. The Gillespie Committee was making a recommendation, which is all they had the authority to do. When the Board accepted the bequest and then voted to accept the recommendations of the Gillespie Committee it obligated the Board to a course of action and implementation became an imperative. The Board has not met this obligation. Gillespie Fund money was not spent in compliance with the Board’s decision when they subsequently set short term and long term goals for the English Language English language Library in the years since 2009.

RECOMMENDATION:

1. The Executive Director be required by the Board to take immediate action to retroactively implement the recommendations of the Gillespie Committee as voted on by the Board of Directors on May 13, 2009 and the Board’s short term and long term goals for the English Language Library using Gillespie Fund money to the extent that the use is for purposes within the restrictions on the Gillespie Fund, such as joining a service that will recommend books and reading material to be purchased by the English Language Library based on the demographic of the Lake Chapala Society membership.

The Board of Directors budget and commit to spending Gillespie Fund money more effectively in 2014 for the benefit of the Lake Chapala Society members by enhancing the reading services provided by the English Language Library. The Board of Directors publicize the commitment to using the Gillespie bequest as a part of a plan to reverse the declining usage of the English Language Library by members. The Board direct the English Language Library Committee to acquire e-readers for the English Language Library to test and evaluate for members to be able to borrow. The Board direct the English Language Library Committee to align the English Language Library with e-content providers so that this technology can be tested and evaluated for use on English Language Library e-readers and member owned e-readers. Implement the guidelines from the “Library Vision Plan” dated June 16^th. 2009.

(F). THE DUTY OF THE EXECUTIVE DIRECTOR AND SUPERVISION OF THE EXECUTIVE DIRECTOR

FINDINGS OF FACT:

At the Board meeting on May 13, 2009 the Board decided that Gillespie Fund investment income was to be applied to the Gillespie Fund and used for specific purposes, that Fund money would not be used for specific purposes, and that the Board would adopt the recommendations of the Gillespie Committee for the English Language Library. This decision was not fully implemented in the ensuing four plus years. The job description of the Executive Director makes it his responsibility to implement the decisions of the Board of Directors and he has not satisfied that responsibility in relation to the Gillespie Fund investment interest, proper uses for Gillespie Fund money, or the plan for the use of Gillespie Fund money to fund the implementation of the recommendations for the English Language Library.

An example of a recommendation that was not acted upon was the recommendation that the English Language Library “test and evaluate” the use of e-readers for use by the member clients. Looking into getting e-readers and not getting them because of concerns about the cost or how to keep track of the e-readers does not constitute “testing and evaluating” required to comply with the Board’s decision.

Supervision of the work performance of the Executive Director is the responsibility of the President acting for the Executive Committee.

REASONING AND CONCLUSION

Whether the failure to fully comply with the specifics of how Gillespie Fund investment interest and how Gillespie Fund money was not to be used or to implement the specific recommendations for the English Language Library to be funded by Gillespie Fund money was intentional or an oversight it occurred due to failure of both the President and the Executive Director to properly meet their respective responsibilities.

RECOMMENDATIONS:

The Board review the performance of the Executive Director regarding his failure to implement the May 13, 2009 Board decision regarding the Gillespie Fund investment interest and the prohibited uses of Gillespie Fund money, and the recommendations of the Gillespie Committee adopted by the Board on May 13, 2009 for the English Language Library, and the President failure acting for the Executive Committee to adequately supervise the Executive Director, and take appropriate corrective action.

It is requested that if the Board wishes to comment on this report that it be done in writing within 90 days.

Submitted for review March 6, 2014

Audit and Advisory Committee,

Kenneth Caldwell, Chairman

[1] This language of the bequest was provided to the Audit and Advisory Committee by the Lake Chapala Society. The Audit and Advisory Committee asked for a copy of the actual policy for review in preparing this report. The President of the Lake Chapala Society responded that they did not have a copy and saw no need to obtain one.

[gringal]

Thanks for the report.

"The President of the Lake Chapala Society announced at the September 2013 Board meeting that the Lake Chapala Society had 10 % of the 1.5 million U S dollars needed for a proposed capital campaign."

A building fund of 1.5million U.S.? The Gillespie fund would be a mere drop in that bucket, and just WHERE is that kind of money proposed to come from? Bequests from our aging membership? Let's hear about it from the planners. Surely they must have some idea.

Pardon my selfishness, but I'd rather see an ebook arrangement getting set up in the library currently instead of saving the money (sitting in the bank right now).......... for a piece of pie in the sky....some day.

[luisa]

I would rejoin the LCS if there was an ebook arrangement. Great idea.

[gringal]

I would rejoin the LCS if there was an ebook arrangement. Great idea.

I am a current member, and I would re-up again come December if they did. Otherwise........no. The idea has been proposed already by others but I don't know the status of progress on it. Perhaps Solajic can tell us.

[Mainecoons]

double post

[Mainecoons]

Minor point of order here. It is my understanding that until the Board formally accepted this report, the AAC was bound by its policies and procedures to keep said report confidential. Here we have it posted by the spouse of a member of the former AAC. Keep that in mind when you read the accusations that have been thrown around regarding disclosure of confidential information. I've not seen this report. Some of the things in it were discussed in a number of board meetings last year. Not all of that was in the minutes. However, once said in a public board meeting, the information is public whether or not it is written in the minutes.

I asked this morning when it might be viewable and was told that it would be public upon acceptance and I asked that acceptance be made at the next Board meeting. Obviously, that is no longer relevant.

One could argue that since the AAC no longer exists, the requirement of confidentiality no longer exists. Since it is very popular among several here to question the integrity of the Board, I wonder if anyone wonders about the integrity of disclosing this.

In any case, it saves me time. I was definitely looking forward to reading it. Bear in mind that there is a lot of opinion here and opinion is not the same as fact.

[El Saltos]

MC, it's obvious you've already read it. You posted references to it over a week ago. The report contains ONLY facts, and recommendations. BTW, where in the report does it appear that the AAC was trying to "force" the BOD to do anything, as you've stated repeatedly? You also claimed that the BOD "analyzed" beneficiary statement "in detail" and came to their own conclusion, which differs. How do you analyze "the English Language Library Books and Equipment Fund" and come to any conclusion that differs from that very clear statement. BTW, there are no BOD minutes that document such an analysis. Sheesh.

[Mainecoons]

On that latter point, for example, like it or not LCS is not governed by U.S. law. It is governed by Mexican law. So I would be interested to know if Mexican law takes a very narrow view of wording as claimed for U.S. law in this report.

I also like the idea of E readers at the library. That could get expensive, I've found that the darned things tend to break when dropped, unlike a book.

Some also may find this interesting:

http://are-ereaders-losingpopularity.articles.r-tt.com/

it seems that with the spread of tablet devices, dedicated e readers are not so popular now. We should keep that in mind before a lot of money is spent on this.

Personally, I love my Kindle because I can make the print big. There are a lot of books in the library that are hard for me to read because the print is so small. I'll bet I'm not the only one that has this problem. You can do this on tablets as well.

[Mainecoons]

MC, it's obvious you've already read it. You posted references to it over a week ago. The report contains ONLY facts, and recommendations. BTW, where in the report does it appear that the AAC was trying to "force" the BOD to do anything, as you've stated repeatedly? You also claimed that the BOD "analyzed" beneficiary statement "in detail" and came to their own conclusion, which differs. How do you analyze "the English Language Library Books and Equipment Fund" and come to any conclusion that differs from that very clear statement. BTW, there are no BOD minutes that document such an analysis. Sheesh.

No I have not read it until now and I want you to stop posting that lie. Thank you.

Your behavior at the December 2013 Board meeting threatening the Board was what I was referring to.

Mr. Flaningam reiterated previous points about the Gillespie Fund, opining that the issue has not been resolved and the community needs to know about it. Specifically, he requested that the Board revisit its decision regarding the interest on the Gillespie fund and that the Board should vow to be good stewards of donations. He stated that if his demands are not met by next Friday he will go public with his opinions.

And the discussion about the Gilespie bequest I referred to was in the September 2009 minutes. That was my take on the discussions they had at that time about the terms of the bequest. I view as asking the brother of the bequestor as getting pretty detailed.

Sheesh is right. If you don't stop with your personal attacks and lies, I am going to ask the admin to handle you. See if you can discuss the topic and stop attacking people. It violates the rules of this board.

[gringal]

" (Maincoons) I also like the idea of E readers at the library. That could get expensive, I've found that the darned things tend to break when dropped, unlike a book.

Some also may find this interesting:

http://are-ereaders-losingpopularity.articles.r-tt.com/

it seems that with the spread of tablet devices, dedicated e readers are not so popular now. We should keep that in mind before a lot of money is spent on this.

Personally, I love my Kindle because I can make the print big. There are a lot of books in the library that are hard for me to read because the print is so small. I'll bet I'm not the only one that has this problem. You can do this on tablets as well."

__________________________________________________________________________________________

....so don't drop the Kindle, already.

I love the Kindle for any number of reasons, and have no particular use for a tablet that does everything and costs more. I imagine that Amazon downloads can be adapted to whatever device you have with a little techie input, so why not go ahead and deal with the e-reader issue now instead of waiting to see how the market wind blows. Everyone I know has a Kindle now. I also like the fact that I can put it in my handbag and take it anywhere for hours and hours of reading.

And..... just for a little logical input on the conflict going on about the oversight committee: if the committee has been wiped out by the BOD, then whatever report they would have made to the BOD/membership would never have been submitted and therefore, never considered......by anyone. So why the kerfuffle about posting it?

[Mainecoons]

It was submitted Gringal before the AAC was dissolved. The process now is that it will be reviewed and commented on by the Board and the AC and a final report will be issued. Maybe we should let the process run now and discuss it further when we have the input from both sides?

I love my Kindle too.

More on that:

The American Library Association released their annual state of the library report today, and in spite of the lack of publisher support the adoption of ebooks and ereaders is up. Over three-quarters of American libraries reported in the survey that they lend ebooks, up from 67% in the previous survey. The libraries are now using a wide variety of vendors, including ebrary, 3M Cloud library, Axis360, as well as others.

A growing number of libraries are also lending ereaders to their patrons. The report showed that 39% of the 7,200 plus libraries surveyed lent ereaders, up from 28% in the previous survey. That is a remarkable increase, and I can also confirm this anecdotally. I have seen a number of news reports over the past few months of libraries announcing new ereader collections, including newly purchased Nook Touch ereaders.

This report also shows that more Americans than ever are using their libraries, and libraries are working to meet that demand. Over 91% of US libraries now offer free Wifi and internet, with 62% indicating that they were the only source of free internet access in their communities. Some are even considering following in the footsteps of BiblioTech, the bookless public library located in Bexar County. That library is still on schedule to open in Fall 2013, and it will stock ereaders and tablets for patrons to use or check out as well as a sizable ebook collection.

http://www.the-digital-reader.com/2013/04/16/76-of-us-libraries-offer-ebooks-nearly-2-in-5-lend-ereaders/#.UyYe16jmxwc

[Mainecoons]

Bookless libraries? They already exist.

http://www.the-digital-reader.com/2013/01/16/san-antonios-bookless-public-library-is-one-step-closer-reality/#.UyYkb6jmxwc

[gringal]

Bookless libraries? They already exist.

http://www.the-digital-reader.com/2013/01/16/san-antonios-bookless-public-library-is-one-step-closer-reality/#.UyYkb6jmxwc

Great! Now let's spend some of that Gillespie fund and HAVE ONE!!! Soon.The members would love it.

(Rather than hoarding the money to divert it to a future building fund, for instance.)

[Mainecoons]

Yes this does sound really cool, doesn't it?

Now if only the library buildings weren't in an advanced state of decay.

[ibbocat]

E book software (calibre) is open source but needs some decent hardware to run on, if you are not fussy about copyright e-books are easy enough to obtain. You can have my very random selection of books to start the process.

[gringal]

Yes this does sound really cool, doesn't it?

Now if only the library buildings weren't in an advanced state of decay.

Couldn't be much worse than my casa was. A decent small time contractor (like ours) could do wonders with that building for a reasonable price.. But maybe the procedural topes would prevent anything that simple from happening. Especially if the "building fund" plan requires that the old buildings fall down first.

[El Saltos]

It was submitted Gringal before the AAC was dissolved. The process now is that it will be reviewed and commented on by the Board and the AC and a final report will be issued. Maybe we should let the process run now and discuss it further when we have the input from both sides?

Since the AAC no longer exists there will be no final report. WYSIWYG. Thankfully Solajijic made the draft version public or it would never have seen the light of day.

[Mainecoons]

Incorrect David. There will be a final report. It is very telling about your intentions here when you celebrate a confidential report being made public by a non-member of LCS.

For the rest of you, there are a number of factual errors in this report and your ELECTED BOARD will respond publicly to them.

[luisa]

Dan, you are not an elected member of the LCS board and you do not have any more authority than David, probably less as it appears that David was involved in producing the report.

[Mainecoons]

That doesn't change the fact that the Board will address the report in due course Luisa, as per the normal procedure. David is no longer involved in any official capacity at LCS so he is a member just as I am.

As a member of that committee, David was bound by the policy and procedures which restricted disclosure of this report until accepted by the ELECTED Board. Now I understand where the information was coming from when David corrected me. It was coming from a report that he was supposed to be keeping confidential. I had to rely only on Board minutes and questions about proceedings in public board meetings, both of which were proper public information. My information was incomplete and some of it relied on memory of what was said in public board meetings.

And now we've had the same confidential report that these folks have been citing on this board published here by a non-member and the wife of the signatory of this interim report. It's pretty obvious now who has been misusing confidential information.

As I said, fairness requires that we also see the response of the Board to some of the statements of "fact" in this report before passing judgment. The cat is partially out of the bag, I think we should wait until it is all the way out. I will say that some parts of this report serve to strengthen my own belief that while the earlier Board did not act improperly here in applying these funds more broadly to the needs of the library, the later Board did not fully consider the appearance of the diversion of interest funds to non-library uses.

[bwhite1948]

Thanks for the report.

"The President of the Lake Chapala Society announced at the September 2013 Board meeting that the Lake Chapala Society had 10 % of the 1.5 million U S dollars needed for a proposed capital campaign."

A building fund of 1.5million U.S.? The Gillespie fund would be a mere drop in that bucket, and just WHERE is that kind of money proposed to come from?

Some of it could from the sale of the current LCS site.

[Mainecoons]

As I understand it, the study of this possibility found the membership, actual and potential, pretty much against this. I am not sure it is on the table at this time.

BTW, the Gillespie fund was not sent to the building fund, only the interest from the Gillespie fund beginning in July of 2013 and subsequent was diverted to the building fund.

I think that amounts to a couple thousand per year, best case. Really, I don't understand the rationale behind that move but I am going to dig and ask questions until I do. It doesn't make a lot of sense to me at this point.

[gringal]

It sounds like far, far away from the original intent of the bequest and it should be re-examined.

Sell the grounds? Neill James would spin in her urn.

[bwhite1948]

Sell the grounds? Neill James would spin in her urn.

I'm a member and not in favor of LCS relocating but I can still walk to it. Lots of complaints about parking issues, both from older members who can no longer walk very far and from more recent expats many of whom prefer to live in gated communities outside centro and can't find any parking near LCS in high season, especially when popular events are being held at LCS.

Times change, quien sabe?

[Mainecoons]

It sounds like far, far away from the original intent of the bequest and it should be re-examined.

Sell the grounds? Neill James would spin in her urn.

Well yes and no, The original bequest was a lump sum grant with nothing specified about interest, if any. It was the 2009 Board that decided to make it into more like an endowment. The original bequest was not an endowment. Their making it into an endowment was a judgment call in 2009 and that judgment can be reversed or modified by subsequent Boards.

I'd like to see this entire business reviewed, sans the rancor of several ex members of the ex AAC. Some of the points raised are valid, some of it is over the top legalistic and I'll wager not a lot of the legalism will not be found in Mexican law. One of the good side effects of this controversy has been for LCS to really revise and make specific its guidance to potential donors. It is the very ambiguity of the past guidance, what little there was, that IMHO suggests we should err on the side of caution and at least with this fund, keep the interest accruing to it.

I'm going to spend more time examining this issue and probably advocating that at minimum the interest diversion going forward part of the July 2013 decision be reversed. At the same time, I see no reason why LCS shouldn't use this fund for anything related to the library other than personnel cost, including materials, supplies minor repairs, etc. Unless Mexican law prohibits it, this would seem to me to satisfy the overall intent of the bequest.

I'd like to see some more specific policy attention directed to how this fund is managed and what is fair expenditure from it.

It is not as if the money has been spent for personal use or gain. The Board has been trying to balance out needs, priorities and resources. That is what we elect them for.