Overview of the Berkshire County Arc, Inc.

This section describes the makeup and responsibilities of the Berkshire County Arc, Inc.

Overview

Berkshire County Arc, Inc. (BCArc), located in Pittsfield, was incorporated on February 2, 1959 under Chapter 180 of the Massachusetts General Laws as a nonprofit human service agency. During our audit period, BCArc provided residential and support services to individuals with developmental disabilities, brain injuries, and autism, as well as individuals who need help with activities of daily living at home. A detailed description of the programs BCArc operated during our audit period appears in the Appendix to this report.

During fiscal years 2018 and 2019, BCArc received revenue from the following sources.

Summary of Revenue³

Revenue Source	Fiscal Year 2018	Fiscal Year 2019
Department of Developmental Services	$20,101,087	$21,427,435
Massachusetts Rehabilitation Commission	3,885,564	3,949,255
Medicaid—Direct Payment	5,697,253	5,856,634
Commercial Activities	3,303,522	3,135,274
Client Resources	1,441,144	1,506,194
Other Grant	30,000	32,000
Massachusetts Commission for the Blind	10,173	11,922
Department of Children and Families	17,966	–
Private Client Fees (Excluding Third-Party)	13,826	277,288
Private Client / Third-Party / Other Offsets	201,215	49,712
Government In-Kind/Capital Budget*	26,640	50,579
Private In-Kind	230,394	232,632
Federated Fundraising	3,079	2,825
Contributions, Gifts, Legacies, and Bequests	95,836	145,585
Investments	131,380	96,466
Other Revenue	419,206	398,029
Released Net Asset—Program†	65,693	1,155
Total	$35,673,978	$37,172,985

*     The state Operational Services Division (OSD), in its UFR Audit & Preparation Manual, defines government in-kind/capital revenue as “the imputed revenue value of donated goods and personal services.”

†     Released net assets are donated assets that have become available for spending because a donor-imposed stipulation has been satisfied.

BCArc Credit Cards

During our audit period, BCArc purchased $800,698 worth of goods and services using 51 agency credit cards:

• Citi CitiBusiness/AAdvantage Platinum Select: 10 credit cards; total charges of $615,424
• American Express: 3 credit cards; total charges of $18,881
• Home Depot: 10 credit cards; total charges of $64,006
• Walmart: 11 credit cards; total charges of $48,642
• ExxonMobil: 7 credit cards; total charges of $38,353
• Staples: 2 credit cards; total charges of $12,044
• Big Y: 5 credit cards; total charges of $3,348
• Best Buy: 2 credit cards; total charges of $0⁴
• Sears: 1 credit card; total charges of $0

BCArc policies state that BCArc’s president and chief executive officer (CEO) approves the issuance of credit cards to employees. During our audit period, 25 BCArc employees were issued BCArc credit cards with authorized credit limits ranging from $3,000 to $46,800 per card; some employees were issued more than one card. If an employee does not have an assigned credit card but wants to use one, s/he must complete a purchase order form that includes supervisor approval. The employee then signs out the credit card from BCArc’s Accounting Department and must return it to the Accounting Department with a receipt for the purchase within 24 hours.

Related-Party Organizations

During our audit period, BCArc conducted business with six related-party organizations. OSD has promulgated regulations regarding related-party transactions; Section 1.02 of Title 808 of the Code of Massachusetts Regulations defines “related party” as “any person or organization satisfying the criteria for a Related Party published by the Financial Accounting Standards Board in Statement of Financial Accounting Standards No. 57.”

“Statement of Financial Accounting Standards No. 57” defines “related parties” as follows:

Affiliates of the enterprise; entities for which investments are accounted for by the equity method by the enterprise; trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; principal owners of the enterprise; its management; members of the immediate families of principal owners of the enterprise and its management; and other parties with which the enterprise may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Another party also is a related party if it can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The following are the related-party organizations with which BCArc conducted business during our audit period.

1. Berkshire Omega

Berkshire Omega, which is located at the same address as BCArc in Pittsfield, was incorporated on June 26, 1980, under Chapter 180 of the General Laws, as a nonprofit corporation. Berkshire Omega’s board of directors has five members who are appointed by BCArc’s board of directors. According to Berkshire Omega’s articles of incorporation, Berkshire Omega operates solely and exclusively for the benefit of BCArc. Berkshire Omega purchases residential and commercial real estate and then, as detailed in the “BCArc Property Lease Information” table below, leases them to BCArc, which uses them to house its programs. BCArc performs all of Berkshire Omega’s recordkeeping and accounting and performs maintenance at Berkshire Omega’s properties. It also finances all the capital improvements made to Berkshire Omega’s properties. BCArc has guaranteed Berkshire Omega’s outstanding debt on a number of its properties; the outstanding debts are outlined in the “Berkshire Omega Debt Guaranteed by BCArc” table below. If Berkshire Omega becomes unable to make its mortgage payments on these properties when they are due, BCArc is contractually obligated to make the payments and is entitled to take ownership of the properties.

BCArc Property Lease Information

Property/Location	Rent Amount Fiscal Year 2018	Rent Amount Fiscal Year 2019
395 South Street, Pittsfield*	$37,686	$38,583
374 South Street, Pittsfield	3,926	3,924
36 Superior Street, Pittsfield	1,206	870
Swamp Road, Richmond	17,734	17,151
69 Onota Street, Pittsfield	3,222	3,162
1531 West Street, Pittsfield	6,878	6,543
814 North Street, Pittsfield	1,851	1,809
379 Elm Street, Pittsfield	1,607	2,541
288 Pecks Road, Pittsfield	3,538	3,291
490 South Main Street, Lanesborough	16,282	15,768
123 Wealthy Avenue, Pittsfield	419	1,452
979 Dalton Avenue, Pittsfield	22,661	22,395
70 Sampson Avenue, Pittsfield	9,633	9,198
20 Taconic Park Drive, Pittsfield	36,406	36,030
Quarry Hill Road, Lee	119,177	116,193
61–71 Depot Street, Dalton	61,633	59,949
10 Wyantenuck Street, Housatonic	20,798	20,574
North Main Street, Lanesborough	33,902	32,784
Sammy Lane, Westfield	31,957	30,672
North Road, Westfield	38,684	37,662
Woodland Road, Westfield	25,423	23,196
Morgan Road, West Springfield	34,820	33,708
Valentine Road, Pittsfield	39,064	41,277
Dug Road, Westfield	47,401	45,678
Coleman Road, Southampton	43,898	39,384
Sheep Pasture (Edgewood), Southwick	48,530	42,666
College Highway, Southampton	53,965	43,440
Ann Drive, Pittsfield	24,370	24,075
East Housatonic, Dalton	44,586	52,608
Old Cheshire Road, Lanesborough	–	37,562
Total	$831,257	$844,145

*     This property address is the headquarters of both Berkshire Omega and BCArc.

 

 

 

Berkshire Omega Debt Guaranteed by BCArc

Property	Balance on June 30, 2018	Balance on June 30, 2019
Coleman Road, Southampton	$260,750	$254,910
Sheep Pasture (Edgewood), Southwick	283,640	277,287
61–71 Depot Street, Dalton	374,788	326,627
North Road, Westfield, and North Main Street, Lanesborough	704,632	663,587
College Highway, Southampton	558,141	201,732
East Housatonic, Dalton	652,380	393,268
Ann Drive, Pittsfield	243,204	237,711
Old Cheshire Road, Lanesborough	379,168	622,298
Nicholson Hill	–	542,833
Kosak Court	–	313,745
Total	$3,456,703	$3,833,998

2. Berkshire Community Apartments, Inc.; Hollow Road Development Corporation; Lanesboro Development

BCArc was a sponsor organization for four grants from the United States Department of Housing and Urban Development to construct new residences for BCArc’s clients. Each grant required that a new single-purpose owner corporation be established. Four nonprofit corporations were established (on February 4, 2004; January 7, 2005; March 10, 2006; and January 18, 2007, respectively): Berkshire Community Apartments, Inc.; Hollow Road Development Corporation; Lanesboro Development Corporation; and Gamwell Development Corporation. These corporations are located at the same address as BCArc, and they all share some board members with Berkshire Omega; these members are all appointed by BCArc’s board of directors.

BCArc has contractual agreements with each sponsor corporation, under which each corporation agrees to pay BCArc a percentage of its gross rent collections in return for BCArc providing management services at the residences it operates.

3. Your Personal Best: Workshops for Success

The spouse of BCArc’s president and CEO provides workforce development training, coaching, grant writing, program development, and department strategic planning services to BCArc through a contract with her company, Your Personal Best: Workshops for Success. During the audit period, BCArc paid her $34,061 for professional services. In addition, BCArc’s president and CEO was identified as an associate of her company on BCArc’s website.

3.     This information was extracted from the Uniform Financial Statements and Independent Auditor's Reports that BCArc filed with the Commonwealth. Under the state Operational Services Division’s regulations (Section 1 of Title of 808 of the Code of Massachusetts Regulations), any contractor or subcontractor that has been awarded a contract to provide human and/or social services from a Commonwealth agency is required to file this report, properly completed, each year. It contains contractual and financial information prescribed by the Operational Services Division, including audited basic financial statements.

4.     According to BCArc’s vice president of finance, the Best Buy and Sears credit cards were not used during the audit period because the stores had closed.

Date published:	May 25, 2021