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Overview of the Berkshire County Arc, Inc.

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

Table of Contents

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
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