Standard 13: Accuracy of Expenses in Financial Statements - Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.
AKS does not meet this Standard because, in the Alliance's opinion, the audited financial statements for the fiscal year ending September 30, 2010 do not provide an accurate presentation of AKS's expenses.
AKS solicits the public for the donation of clothing and other household items, then sells the donated in-kind items to raise funds that are in turn granted to other kidney-related charities. In fiscal year 2010, AKS reported revenue from the sale of donated items net of the cost of merchandise sold ($1,557,976). In this case, cost of merchandise sold represented the salary for individuals soliciting for in-kind donations ($1,409,493), payroll taxes ($111,476), and telephone expenses from telemarketing activities ($37,007). In the Alliance's opinion, these costs should not be netted out of the amount received for the sale of in-kind items, but should instead be allocated as fund raising expenses.