A Winnipeg organization that distributes bibles had its charitable status revoked after an audit revealed its treasurer and his family members were improperly receiving benefits from the group.
The Canada Revenue Agency stated that much of the funds raised by Gospel Outreach went to the personal benefit of treasurer Harold Reeve, his family, friends and business associates.
The CRA formally revoked Gospel Outreach’s charitable status earlier this month.
The audit of Gospel Outreach’s 2009 operations found:
- two trips to Punta Cana, Mexico, total expenses $3,471.81;
- a ski trip to Big Sky/Moonlight Basin, in Montana, total expenses $4,403.63;
- payment of property taxes for a lakefront cabin at Traverse Bay, purchase of a hot tub and other cabin-related expenses, totalling $6,997.97;
- purchase of boat fuel, $1,215.08;
- purchase of fuel for three vehicles owned by Gospel Outreach but used by Reeve’s spouse and children, $4,760;
Reeve and other Gospel Outreach directors could not be reached for comment.
However, in response to the findings of the CRA audit, Reeve wrote to the CRA in May 2012 and explained the expenses on behalf of himself and his family: "What I have done and do is for the charitable benefit of others... I used (Gospel Outreach) to pay for the expenses as I deemed them to be part of the service of (Gospel Outreach)."
Gospel Outreach has an office in St. James, at 303 Linwood St.
Gospel Outreach’s most recent financial records, available online at the CRA website, show that the organization raised $106,300 in charitable donations in 2010 and $96,600 in 2011. The organization listed no administrative expenses, but it listed annual salaried expenses of $33,500 for one individual. It stated it spent most of funds raised for its charitable programs.
In addition to the improper spending, the CRA audit found Gospel Outreach had failed to maintain adequate books and records; and provided grocery gift cards, intended for needy inner city residents, to individuals whose income ranged between $60,000 and $150,000.
The CRA stated that similar financial abuses dated back to 2004.
As a result of the revocation of its charitable status, the CRA stated Gospel Outreach is no longer exempt from paying taxes and it must now refile its tax statements and pay taxes on its income within a year. It also will no longer be able to issue charitable tax receipts for donations.