A complaint was filed with the Office of the New York State Attorney General on May 28, 2021, against the New York-based Public Relations Society of America (PRSA) 501(c)(6) business league and the PRSA Foundation 501(c)(3) charity by Mary Beth West, who previously held “APR” accreditation and served as a director on the PRSA National Board.
The complaint alleges, among other things, years of documented financial discrepancies, unlawful financial-reporting compliance failures and illegal whistleblower retaliation, in violation of the New York Nonprofit Revitalization Act of 2013. Tennessee-based law firm Lewis Thomason, P.C. represents West in connection with the complaint.
The complaint attaches dozens of exhibits, including PRSA and PRSA Foundation financial records and meeting minutes containing unexplained financial discrepancies uncovered by West.
The Complaint alleges that, across multiple years, PRSA National leadership failed to provide legally compliant financial reporting yet “forecasted” a “surplus” for specific fiscal years to the PRSA National Leadership Assembly annual member meeting.
Belated financial reporting ultimately revealed hundreds of thousands in losses in member dollars for said years.
The complaint further alleges that, despite these substantial losses, “PRSA Inc. engaged in efforts which have no apparent purpose other than to weaken PRSA Inc.’s internal financial controls,” such as concealing the identities of those serving on PRSA’s audit and grievance committees, as codified in 2019 PRSA Board policy.
For some 14 years, PRSA and the PRSA Foundation have shared the same audit firm, which also prepares both organizations’ IRS filings.
For nearly 10 years, this audit firm has included a disclaimer in its audit opinion letter for both organizations that it offers “no opinion” “on the effectiveness of (PRSA’s or PRSA Foundation’s) internal control,” despite New York State law requiring auditors to discuss “any material risks and weaknesses in internal controls identified by the auditor.”
“Dismal” charitable expenditures by the PRSA Foundation are also alleged in the complaint, with only approximately 23% of the Foundation’s total expenses for 2019 dedicated to grants and scholarships and only 20% similarly invested in 2018. (The PRSA Foundation has provided no annual report yet for 2020.)
The complaint also alleges unlawful whistleblower retaliation by PRSA National leadership, which expelled West, a former national board member, in March 2021 and stripped her of her “APR” Accreditation and PRSA College of Fellows status after she reported concerns to PRSA’s leadership regarding financial discrepancies and potential ethical and legal violations.