The Articles

Roz Phelps has yet another rescue.

 
This report is devastating. Rosalind Phelps said it was a 'ridiculous error' that she used the Hopeful Heart's PayPal account for a deposit on a condo in Ecuador. However, it turns out it was the only PayPal account and it was linked to her personal account. CRA Audit Report for Hopeful Hearts.

 Hopeful Hearts Rescue Closing After Losing Charitable Status

Article in The Metro
Comments to article in the Metro

CRA has revoked charity status.

Note that Clifford Chan did not go to the paper. Don Butler called him.

Ottawa Citizen article on 'ridiculous error'.

Personal use of dog rescue’s PayPal account ‘ridiculous error,’ Hopeful Hearts founder says
Three directors resign over incident following months of internal strife

By Don Butler, The Ottawa Citizen October 23, 2013 Tweet StoryPhotos ( 1 )

Hopeful Hearts founder and president Roz Phelps says she mistakenly used the charity’s PayPal account, rather than her personal account, to pay a security deposit on a vacation rental property in August.OTTAWA — Three directors of Hopeful Hearts, an Ottawa dog rescue organization, have resigned after its founder and president used the non-profit charity’s PayPal account to make a $320 U.S. deposit on a vacation rental property in Ecuador.

In a statement posted on the Hopeful Hearts website following legal advice, Roz Phelps said she mistakenly used the charity’s PayPal account, rather than her personal account, to pay the security deposit in August.

She then compounded what was already a “terrible mistake,” she continued, by telling the organization’s treasurer, Lynn Grogan, that the charge was for veterinary services for two dogs in the United States that Hopeful Hearts was bringing to Canada.

Founded by Phelps in 2007, Hopeful Hearts places elderly and special needs dogs with adoptive families. Last year, it rescued 227 dogs and placed 202 with foster families. It raised nearly $190,000 and spent $184,229, mostly on veterinary costs.

In an interview Wednesday, Phelps said her use of Hopeful Hearts PayPal account was “clearly just a ridiculous error.” The account was linked to her personal email, and in hindsight, “absolutely” should have been linked to a Hopeful Hearts account, she acknowledged.

Phelps said her explanation to Grogan was also an error. Two weeks earlier, the charity had paid a veterinary bill for the two dogs in the U.S. When Grogan asked about the $320 charge, “My mind went directly to that,” she said.

When the charity’s board discovered what Phelps had done, it called her to an emergency meeting in early September. In an interview, one of the former directors, Clifford Chan, said he was skeptical of Phelps’s explanation.

“It’s a little difficult to believe that within a week she had forgotten what the expense was,” he said.

“She said it was an honest mistake,” Chan said. “The evidence may or may not support that. Nothing can be proven either way.”

For her part, Phelps said there isn’t much she can say if the former directors don’t accept her explanation. “That was the situation, and that’s what happened.”

The episode capped months of conflict between Phelps and the board of directors — another factor in the three directors’ decisions to resign on Sept. 9, Chan said.

Part of the concern, he alleged, was that the charity’s financial controls weren’t sufficient to ensure that cash donations were accounted for properly. But Phelps called that “absolutely incorrect. There had never been any talk of this before.”

Phelps agreed relations between her and the three board members were badly strained. “The constant battling, the constant butting heads, it wasn’t productive,” she said. As a result, she was “relieved” when the three resigned.

Chan said he reported the PayPal incident to the Canada Revenue Agency.

“I thought it was better to be proactive in terms of notifying CRA about it.”

Phelps has heard nothing from the agency yet, but is “more than happy to open up the books. In fact, I’d welcome it, because then we can put all this to rest.”

Meanwhile, to reassure donors, she has removed herself from Hopeful Hearts financial dealings and has no access to its bank or PayPal accounts.

“I thought that was the best safeguard all around. I want people to trust us. It’s incredibly important.”

dbutler@ottawacitizen.com

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