I'll note tangentially that I was curious to see where all of this money was going from the contracts and donations to IoM. I mean, if the National Academies of Science, which includes IoM does 400 or 600 studies a year, I believe, at say $1M per; and all of the panelists not only volunteer, but members pay hefty dues, for which I don't think they receive any benefit other than the prestige of belonging to the NAS; and they have a $400M endowment which would produce unearned income of $32M in an average year; and they get $Millions in donations every year, where is all this cash going?
I have only a passing familiarity with accounting, so it would take more work to really look into things, which I'm not sure I want to do or not. I don't think I saw any really smoking guns, but there were things that seemed might be bad business judgment and one thing that was substantially misleading as far as I could tell on a very important matter.
I found documents for the National Academies of Science, which includes IoM. In 2011, the latest year for which IRS filings are available, NAS booked an approximate $30M loss despite receiving $6M in donations and holding an investment portfolio worth about $400M which should produce about $32M in unearned income in an average year of 8% income/appreciation.
This loss was mostly due to a decline in worth of investments since, according to their own accounting, they had inordinately large positions in highly risky investments such as hedge funds, private equity funds and derivatives. I don't have the figures in front of me, I will come back to edit when I do, but the loss was something like $30M.
In NAS' annual report this staggering loss was very briefly explained away as the product of a bad year for investments generally, implying strongly that they were hit no worse than comparable institutions. According to my brief research on the topic, this is false.
The Dow gained about 5%, the S&P500, which is a better measure, was flat. More relevantly, Non-profits, such as NAS, which account by calendar year experienced no change to their endowments on average. Educational institutions, which NAS projects itself as using the .edu domain names, experienced staggering gains to their endowments, on average, not losses. For example, of the 500 largest educational endowments, only 26 experienced less than double-digit gains in 2011 and none lost money. None out of 500.
There a few other things that raised my eyebrow, but I haven't looked into further. These include $3M in loans outstanding to officers and directors (this is a frowned on practice, according to my understanding); the average salary of the three top paid employees was $850K (which Im not sure is excessive or not); the average salary for employees at IoM was $100K plus apparently $19K per employee for travel (there are 1,320 employees) for a total of $27M in employee travel. Another $30M was listed for travel for non-employees. (Two non-employees were given "tuition" of $150K each; perhaps this is for four years of schooling which they book as an expense all at once, I don't know)
There were several vague itemizations termed "misc.", "other" and the like, each for $Ms or $10Ms, some of which were required by law to actually be itemized, but at least on the IRS' website, these schedules did not appear (though others did).
Im not going to go into this further in the foreseeable future. Im not sure if it will help us. But if someone who has accounting knowledge thinks it is worth looking into now or later, Pls let me know. Again, most of these figures are exact, but a few are very approximate. I will come back and edit when I fish out the figures.
