Following the resignation and departure of the Specialty Coffee Association of America's (SCAA) Chief Operating Officer on September 12th, a serious cash shortage was revealed. An immediate investigation by SCAA's Executive Director uncovered serious accounting irregularities and a loss of SCAA's cash reserves. The association has reported this situation to the appropriate authorities, including insurers and the police. A formal investigation has been initiated and is ongoing. The SCAA President, Secretary/Treasurer and Legal Counsel were immediately advised of the situation when it was discovered. They first informed the Executive Committee and then the entire Board of Directors. Following notification, the Board took the following actions: they 1) reported the nature, scope, and seriousness of the problem to the 125+ Committee members participating in the previously scheduled annual planning meeting; 2) restricted check signing authority to the Executive Director and Secretary/Treasurer of the Board of Directors; and 3) developed an action plan through the Committee structure to resolve the current cash crisis. The elements of the plan for moving the association out of the crisis are three-fold. First, the SCAA has created a membership endowment fund to cover the association's short-term loss of working capital. Second, it is continuing the normal conference planning process so that the SCAA's Charlotte conference and exhibition is just as successful as the previous 17 events. Third, it is streamlining headquarters activities to operate within the current limits of available resources from membership dues. The combined goodwill and determined efforts of the SCAA board of directors, staff, volunteers, members and business partners will ensure the timely and effective resolution of this situation. SCAA remains committed to its membership and is dedicated to ensuring the specialty coffee industry remains viable and strong. Rick Peyser, President of the SCAA Board of Directors, said, "The SCAA will continue to be the leading source of information and services for the rapidly growing specialty coffee community. We are moving forward with Executive Director Ted Lingle to achieve the plans we have developed and are looking forward to an outstanding annual conference that will be held in Charlotte, North Carolina April 7-10, 2006." The SCAA board will keep all association stakeholders informed regarding the current status of the situation and the full outcome of the investigation.
Sincerely, SCAA Board of Directors IMPORTANT UPDATE 9-22-05
Thanks to the immediate response of SCAA committee volunteers, Board members, Past Presidents Council, the Roasters Guild, the Barista Guild, and members: · SCAA has begun receiving checks from "First Responders." Over the last six days, the SCAA has received over $111,000 in checks and pledges from member companies. Information about "First Responders" and how you can participate appears on the next page. Questions can be directed to any SCAA Board member and/or members of the First Responders Task Force. Contact information for Board members is available in your Membership Directory, or contact SCAA for a Board list. · The SCAA Board of Directors will launch next week an "Endowment Campaign." Additional information on the First Responder program and the forthcoming Endowment Campaign will be available at www.scaa.org on Monday September 26th, and sent to all members. · The 2006 conference committee has recently put the finishing touches on the SCAA's 18th Annual Conference & Exhibition. The Charlotte conference will include the strongest business track we've ever offered alongside all the coffee curriculum attendees have come to expect. We look forward to working with our exhibitors and others to produce an outstanding event in Charlotte, April 7-10, 2006. · SCAA has made emergency cut backs in operations costs with no significant impact on quality membership services. This is only possible due to the tremendous support of members and volunteers who are willing to contribute "time, talent and treasure." You can also help immediately by paying your dues today if you have not already done so, and being a "First Responder" (see next page). Thank you for all the phone calls and emails offering words of encouragement and confidence!! CALL FOR SCAA "FIRST RESPONDERS" From the First Responders Task Force There was a serious cash deficiency discovered in SCAA accounts after the recent departure of the association's Chief Operating Officer. This shortage leaves SCAA with minimum cash available to meet every-day expenses such as rent, payroll, and utilities. We must find a way to help our SCAA get by the immediate cash-flow situation, even as the SCAA Executive Board and the Board of Directors work on a recovery plan, and law enforcement investigation and a forensic accountant's audit grind forward. A committee of volunteers has come together to call for First Responders* to step forward and see the SCAA through the next three months. SCAA membership shows that you care about your business and your craft. As members of a great movement we have been challenged to carry SCAA through this difficult time. It is estimated that the SCAA will need $250,000 to meet its obligations during the initial phase of fiscal recovery. Ideally 100 members, each writing a check for $2,500, would meet the immediate need, but larger and smaller checks are being accepted and both business and personal checks are welcome. The key to being one of the First Responders* is timing. SCAA needs our help right now. So, if you are in a position to write a check to the association that supports our business efforts and champions our ideals in the larger coffee world, please send a check today to "SCAA Endowment Fund." Mark the check memo as "First Responder" and post it to arrive by October 7, 2005 to : Specialty Coffee Association of America ATT: First Responders 330 Golden Shore, Suite 50 Long Beach CA 90802 Thank you for stepping up at this important time. The First Responders Task Force Timothy Castle - Castle & Co Tim Chapdelaine - Volcafe Specialty Coffee LLC Mary Petitt - National Federation of Coffee Growers of Colombia Rick Peyser - Green Mountain Coffee Roasters Ric Rhinehart – groundwork coffee co. Donald N. Schoenholt - Gillies Coffee Co. Christian Wolthers - Blaser & Wolthers Specialty Coffee Trading Company * First Responders (those whose checks are received before Oct. 7, 2005) will be appropriately remembered by SCAA. Tax note: Business First Responder checks are an allowed expense. Personal checks, while welcome, are not tax deductible. Contact the SCAA: Specialty Coffee Association of America 330 Golden Shore, Suite 50 Long Beach, California 90802 PH 562-624-4100 FX 562-624-4101 coffee@scaa.org ~ www.scaa.org
