BANGOR, Maine — Manna Ministries lost its nonprofit tax-exempt status for nearly a year in 2013-14 for failing to file paperwork detailing its income and expenses with the Internal Revenue Service, and the embattled social service organization has yet to file IRS forms for the three most recent fiscal years, according to its executive director.
The IRS reported in April 2014 that Manna lost its federal 501(c)(3) tax-exempt status as a nonprofit organization effective November 2013 because it had failed to file Form 990s for three straight years, according to an IRS document obtained by the Bangor Daily News. An online search and repeated requests for records from Manna and the IRS indicate the last completed 990 the social service organization filed is for the 2010 fiscal year.
Failing to keep up with its IRS obligations is the latest in a string of recent revelations about Manna, which operates counseling clinics, a soup kitchen and food pantry at its Bangor facility. The state says the organization owes it $1.3 million for mismanaging a drug counseling clinic, it allowed its corporate charter to lapse several times in recent years, and it filed documents with the state containing an inaccurate list of its board of directors.
Manna had its nonprofit status restored in October 2014 after going through the reinstatement process, the IRS document indicates. The document warns, however, to check with the IRS to determine an organization’s current tax-exempt status.
An IRS spokesman, Michael L. Dobzinski, said Thursday that federal disclosure laws prohibit the IRS from commenting on specific business, tax-exempt or taxpayer matters, or fines paid.
Manna might risk a second loss of its nonprofit status if it again fails to file the forms detailing its revenue and expenses for three straight years, said Manna board member and attorney Michael Guare.
“There obviously have been some serious mistakes made that need to be corrected as soon as possible,” Guare said Wednesday.
Manna Executive Director Bill Rae said that he filed the nonprofit corporation’s Form 990 for 2011 on time and that he filed the form for the 2012 fiscal year on Wednesday. Rae said he hopes to finish the reports for 2013, 2014 and 2015 soon. The 2013 filing likely will go out on Friday, Rae said Thursday.
“We had too much going on and I just couldn’t get to them,” Rae said of the forms. “Things got partially started and were not finished.”
When asked to provide copies of the 990s he had filed, Rae provided only the 2012 Form 990.
A 12-page document, the basic Form 990 is used by nonprofit organizations to report to the IRS their financial accounting. The form contains sections detailing an agency’s balance sheet, total assets, reconciliation of net assets, financial reporting and auditing, liabilities, functional expenses, revenues and compensation to officers and employees.
A copy of the 2012 Form 990 that Rae provided to the BDN showed that the organization accepted $686,114 in grants and donations, $1,245,133 in program service revenue and $63 in investments. That created a total revenue of $1,931,310. The organization paid $1,957,845 in total expenses — including $1,295,490 in salaries and benefits — to finish the year with an operating deficit of $26,535.
The figures include operation of a drug counseling clinic in Medway that since has closed.
Rae said this week Manna had approximately 40 employees at the time of the 2012 filing and there are now 23.
The 2012 form showed the organization had total assets of $902,763 and total liabilities of $718,162, which left it with a net fund balance of $184,601. Rae’s salary was listed as $64,085.
Manna’s failure to file IRS forms was the latest in a series of paperwork gaffes Rae has confirmed since the Maine Department of Health and Human Services said last week that the organization owes it $1.3 million for mismanaging the drug counseling clinic in Medway and receiving Medicaid overpayments. The Medway clinic, which began operations in 2010, closed in 2013.
The Maine secretary of state’s office on Monday revealed that Manna lost its corporate charter in February and was illegally operating its programs. Manna lost the charter for failing to replace lawyer Joe Baldacci of Bangor, who resigned in November 2015, as its corporate agent.
Two ex-members of Manna’s board of directors on Tuesday said that they were surprised to learn they still were listed as members in the organization’s 2015 annual report to the secretary of state despite having left the board months or years before. The board, which provides basic managerial oversight to the agency, now has four members, including Rae and his son Mark Rae.
Rae and a spokeswoman from the secretary of state’s office said that he has made some headway clearing up problems reported earlier. The office has received Rae’s application to name himself as Baldacci’s replacement and expected to approve it on Thursday, spokeswoman Kristen Muszynski said.
Rae’s paperwork correcting the 2015 report with the names of the present board members — himself, his son Mark, Guare and Stephan Lanfer — also has been received. The annual corporate report for 2016 is due June 1, she said.
Rae expressed hope that he would file the annual report on time, if the organization survives. He said that Manna survives on donations, which have declined since his administrative woes became public, but he could not say by how much.
Guare, who is a part-time volunteer on the board, said that he hoped to set a board meeting within the next week or so.
“Manna has weathered many crises in the past. The work Manna does is very difficult but certainly very important. The requirements the state imposes are certainly legitimate but aren’t always easy to meet,” Guare said. “My hope is that the organization will become stronger once we comply with the regulations that need to be complied with, and that we will continue saving lives, which is what the drug addiction counseling is all about.”