Monday, November 20, 2017

Was Penpa Tsering wrong to see $1.5 million as Accounts Payable?





The explanation from Sikyong last night at Toronto, Canada was very convincing but runs short on the legality as well as fiscal aspect of this entire loan vs grant/donation saga - specifically from someone with a law background.

There is no doubt that The Tibet Fund as an IRC 501(c)(3) registered tax exempt non profit organization is not in a position - legal as well as fiscal - to give away $1.5 million to another registered non profit organization based in Washington DC. So, to protect its own integrity and organization, there is no question that this amount was given in the form of a loan with an unwritten understanding that it will be written off someday as grant. A formal loan agreement seems to be in place according to 2015 and 2016 financial statements of The Tibet Fund.

In both 2015 and 2016 financial statements of the Tibet Fund, 1.5 million was mentioned as Accounts Receivable from the Office of Tibet, Washington DC (registered as Tibetan Community Development Fund Inc) with interest rate and maturity date. In the world of accounting, when there is accounts receivable, there must be accounts payable in the recipient organization's financial statements. This is where the entire episode of mistrust between current representative of North America and Kashag seems to have begun.


What could have been done to stop this from the beginning?
  1. In a country (United States) where the rule of law is given the utmost respect and regard - though it is an internal understanding - there should have been a formal written document between the Tibet Fund and the Office of Tibet. As this could be against the law of the land, this document should have been written in Tibetan language and marked as Highly Classified. The drafting should have been done in consultation with Kashag.
  2. This highly classified document should have a clause on how the process of writing off of this loan amount will begin and end.
  3. This highly classified document should have been handed over to new representative with a copy to Kashag at the time of handing-taking.
  4. In order to follow the general rules of accounting, the loan amount of 1.5 million must be accounted for in the books of the Office of Tibet's financial statements. Remember that it’s easier to write off accounts payable than accounts receivable.

To conclude, without any documentary evidence of this internal understanding/adjustment, there is no guarantee in the eyes of law that someday the Tibet Fund will not ask the money back. For information, the Tibet Fund is managed under a board.

Please note that this piece is written to share information that many might not see due to lack of working experience.


18 comments:

  1. That's exactly I was scratching my head when Sikyong was explaining to mimang in Toronto. How come they did not disclose this to PT when he took over as Reo for NA. This whole issue of Mistrust could have been avoided. Official documents shows loan is payable back in 2040. By that time current Sikyong will be No where to answer this. This is huge missteps from Kashag.

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    1. PT is representative and he should have trusted Sikyong's explanation or to shed the blame, he should request the explanation in written.

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  2. Then we can say any thing!!!! By the year 2042 we will be in Tibet. No need to worry!!!!!

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  3. If OoT states account payable,then by any chance if Tibet Fund ask the money back, OoT has to pay back the loan because OoT accounts state the same. If its not in the account of OoT, then atleast OoT can say we do not owe anybody because our account has no accounts payable.

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  4. Sikyong spilled classified info to the public in a grand fashion. I wonder if LS consulted with Tibet Fund to share this information to the public

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  5. Tenzin, I don’t see it’s your genuine concern. If you really wanna know. Why not you go n ask Tibet Fund. I don’t see any problem.

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  6. It’s not wrong but after knowing they is nothing wrong doing from our kashak then he should at least do something for not letting down our hope in him as a representive in North America's.there’s no transparency in government official work and now after all this chaos,I am assure that world will ask a answer for our 1.5mil us$....it’s loss for our exile government only.

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  7. I am sure Kashag has MOU - Memorandum of Understanding with Tibet Fund. Here is an excerpt from Richen Dharlo La's Personal Reflections "In addition, The Tibet Fund is also proud to have supported the Office of Tibet in the purchase of a new building in Washington DC in 2015.

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  8. So just explain us, how the hell this internal understanding of managing funds based on trust, could have something to do with corruption. Author should also explain how this issue has benefited the Prime Minister? Does this action leads to any embezzlement of public funds. Even though in future if Tibet Funds ask office Of Tibet to return the money? Whats wrong in this? Where is the corruption. Why this uproar? How this is linked to the firing of Penpa Tsering. please Explain.

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  9. This comment has been removed by the author.

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  10. https://wildjepa.com/2017/11/23/wake-up-my-dear-u-tsang-people-part-i/

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  11. Why the link not working on this site?

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  12. At page 8, Note 7 last sentence:
    1 Sentence, 17 Words and 66 letters
    “The Fund, at same point, may convert this loan into a grand to The Office of Tibet”

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  13. Office of Tibet's accounting is not some kind of sweater business book keeping where there is no auditing. OofT as registered non-profit, there is a requirement for tax filing( I am not saying that you have to pay tax but file tax ). When Tibet Fund shows $1.5M as a loan to OofT then other party must show it as loan payable. Tibet Fund knew the legal implications so they did it by the law ( or at least made it unquestionable if audited by IRS). So my head scratcher is, when one side is playing it safe then why is the other side, OofT, taking the risk of losing the non profit status. We cannot just brush it off saying it's mutual internal agreement. What is the problem if showing it as account payable in OofT's book ? there is no tax risk if they show it in their book as loan. Only reason that I can think of is the optics will not be good for Sikyong as he has taken lot of credit for negotiating a deal to get $1.5M from Tibet Fund to by OofT building in DC. He also made big issue out of having to disperse the funds from bank accounts due to closure of accounts. Sikyong stated that they had to pay 10% tax($150,00) which might not be true as most of other organizations are also non profit organization and tax exempt.... so it's puzzling to say the least with Sikyong's explanation,justification and motive for termination of PT.

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  14. When an employee turns his back on the employer in this case employee being Mr. Penpa Tsering la and the employer being Sikyong. Who in the world will trust a person to do the right job when even before he left Delhi for DC was engaging in anti Sikyong activities. Now, its public that the concerned person is Ms. Dadon Sharling. Would any of you have such a person work in your department or under you ? ask this questions yourself first. The root cause of all the ill will started from that day going forward.

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  15. In the name of seeking and defending truth, I watched my brothers and sisters on social media, chat groups and various platforms and community gatherings – comment and justify their point of view on the issue of $ 1.5 million loan/grant from Tibet Fund. The CTA and Sikyong Dr. Lobsang Sangay la in particular elaborated in depth about the nature of the loan.

    It was extensively commented upon and explained how the tax system works here in the United States. Some sounded like a real tax professional at work, while others sounded more sarcasm than value. I am shocked and dismayed how everyone missed to do their due diligence. In this era of digital information, everything is available out there on the WWW – World Wide Web. As the saying goes “A little knowledge is a dangerous thing, but it’s not one half so bad as a lot of ignorance”.

    The white elephant in the room is the $ 1.5 million in question. An amount that was loaned from Tibet Fund in 2014 to purchase an office building in Washington, DC where the current Office of Tibet is located and functioning. Audited IRS tax statement from Tibet Fund for the years 2014, 2015 & 2016 clearly show $1.5 mil as “RECEIVABLES”, so I am assuming the problem arose when this same amount could not be found anywhere in the record books of OoT, DC.

    As the great leader Dr. Martin Luther King stated “Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity”. It is here or from here, my brothers and sisters forgot to do their due diligence. One of the golden rules of accounting is: Debit The Receiver, Credit The Giver. In this case, debit the receiver being TIBETAN COMMUNITY DEVELOPMENT FUND, INC, 1228 17th Street, NW, Washington, DC 20036 established in the year 2000 in NY and credit the giver being TIBET FUND, 241 East 32nd Street, New York, NY 10016. If Tibet Fund gave or loaned money to Tibetan Community Development Fund, Inc. how in the world one can one find the said amount as payable in the account books of OoT. These are 2 separate entities in the eyes of IRS. The financial statements are available online as required by law for any non-profit entity in the United States.

    So, rather than dwell in the mudslinging and causing irreparable damage to our unity and cause, please do your due diligence before commenting or posting misinformation.

    Please, please... let’s all work together and stand as united.

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  16. It feels awesome to read such informative and unique articles on your websites.Joseph Hayon

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  17. Every person can understand general simple system of A/P and A/R but who will explain, how the Tibet Fund money (2.7 million Investment and 1.5 A/R for recent issue and still seems, there's some liquid cash in 'cash and cash equivalent section' in their financial statement) come from ?. These are internal matters and Kashag understand their moral rights to say on these money even though the American law may not defend kashag.

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