[quote="co614" I witnessed first hand the immense investment in time, money and all out effort that Will Harris ( former CEO of the VMT ) and his 5 disciples put out in the months preceding the highly successful 611 excursions run in Nov. 2023. Many,many 18 hour days were spent building an entire operating base in Goshen ( on Harris's land) which included a brand new 1700 ft. long dedicated siding used for boarding, a 400 car parking lot, a large welcoming center tent that functioned as a waiting room, souvenir shop and credentials center. Also, brand new 3/4 mile long gravel entrance road off the main highway, 220V commercial power, city water line, ample lighting so as to fully function after sunset, extensive signage and on and on.
[/quote]

Let's not forget that some of the ones on the VMT Executive BOD (think a 'special' BOD within the BOD and the ones that make most of the decisions) also threatened to sue Will Harris under the assumption that he would be profiting by running the trips off of his property.

That's right, as he is spending a very large amount of HIS own money on HIS own property, spending 7 days a week with 12+ hours a day on site, using his own guys from his lumber business on the project to make sure they get it done and to give THEM a place to run THEIR engine and make some money, these goofballs on the Executive BOD including the previously mentioned Vice Pres are trying threaten him with legal action.

It would almost sound like a bad joke and be funny if it wasn't so pathetic and dysfunctional.

Yeah, we know all about people who threaten to sue people that disagree with them or have a difference of opinion............... yet one of those blokes keeps posting here......

The linked article indicates that the outside accounting firm performed an "agreed upon procedures" engagement.

This is not the same as an audit and as such comes with restrictions on use and publication.

The minutiae of accountancy aside you typically engage a firm to do what you ask them to do in order for the client to make some determination. Because this inherent limitation of scope and professional judgement; the report is intended only for the parties specifically named in the engagement letter and report-in some cases an AUP report is mean only for the client and perhaps a third party such as a financial institution, grantor or government body.

https://us.aicpa.org/content/dam/aicpa/ ... -00215.pdf

Interested parties can see all of the restrictions on the report in the standard; but the TL; DR short version can be garnered from p2191 of the linked standard:


Description of the Intended Purpose of the Agreed-Upon Procedures
Engagement (Ref: par. 34g)

.A55 Because the practitioner is precluded from expressing an opinion or
conclusion, it would not be appropriate to state that the intended purpose of the
engagement was to determine whether the subject matter was prepared or is
stated in accordance with specified criteria or that the practitioner performed
the engagement to conclude whether the entity complied with specified criteria


And yet the news outlet indicates the following:

A law firm hired by the museum said allegations from board members who resigned at its June meeting were “unfounded” and that accountants concluded the museum “had appropriately complied with its own internal procedures, had properly utilized and accounted for all grant funds, and is generally in a healthy position financially.”

Note that the standard restricts the report and its uses and VMT is using the report to assert (publicly) it's compliance with grant requirements and its financial health generally.

Even if a full scope audit was performed; the purpose of an audit is to determine whether the financial statements are fairly stated and free from material error (that is errors that are significant enough in magnitude or nature to change a person's evaluation of the audited entity). The only time an auditor opines on financial viability is when they issue a "going concern" qualification-a qualification in this context is a negative thing; unqualified is what you want) because facts and circumstances emerged during the audit that led the auditor to believe that the entity might not remain a "going concern" in the next year.

These are rare; the old Kodak (ticker EK, not KODK) was issued a GC exception; as was the solar engergy firm Solyndra. Keep in mind, the accountant is effectively severing the relationship and GC qualification can become a self-fulfilling prophecy as creditors, customers and investors seek to limit loss exposure.

https://us.aicpa.org/content/dam/aicpa/ ... -00570.pdf


In short, it seems to me that likely VMT and its counsel are misusing the report; even the firm performed some procedures related to financial viability; the use of the report should be by specified parties; not the public at large.

Thanks Superheater for the valuable lesson in accounting and the fine points regarding the importance of getting a clean bill of health ( unqualified) from a CPA done audit.

Some thoughts at this juncture:

1. Sending a cease and desist letter didn't do the VMT any favors. In most folks it raises the suspicion that they've got issues they'd rather not see further discussed in the public square and are trying to silence the Rambler from further investigations.

2. There's no doubt that the only way those who believe that the VMT has mis-handled some of its financial affairs will be convinced otherwise is for the VMT to have an independent, respected CPA firm do an audit AND publish in its entirety its report.
Short of that the skeptics will remain so.

IMHO- Ross Rowland

Yes, Superheater got it right.

Now, remember, a 'real audit' is two things, rather slow, and rather expensive. So don't conclude much out of this until you know if it was restricted due to time, money, or both.

And correct me if I'm wrong, but the CPA reporting to the lawyer as his own expert keeps it in privilege. Disclosure, not a lawyer, but keep bumping into them every time I turn around...

Ross, I think it's important to qualify your phrase "clean bill of health".

The purpose of a financial statement audit is to provide reasonable assurance that the financial statements are reasonably free from material error. You could have a great business and crappy books or a crappy business and great books.

Evaluating the business viability of an enterprise starts will financial statements (and, especially in publicly traded companies the controis over those statements), but doesn't end there.

While reliable financial statements are essential, they are inherently about achieved results rather than future prospects and beauty is in the eye of the beholder.

As such, everybody has individual judgment about such things as the integrity and competency of management, the potential for smooth succession, the growth of the market(s)

, whether or not there's disruptive innovation on the horizon and whether or not the company has the foresight and ability to respond. Even great managements can fail to pursue effective strategies. At times, companies are so organizationally invested in their existing business model they resist the coming the coming tsunami. Think about Baldwin's commitment to steam in the 1930's for example.

Part of my job has been to develop a viability analysis for prospective vendors of my employer and classify the risk that the business might not remain viable during the term of a contract. While I want to see audited financials as an ideal, they are not sufficient for me to rate the enterprise as "no anticipable viability risk". I often have to repeat the same caveats over and over-including, no I'm not giving them a letter grade. Also, I never sign these evaluations as "CPA", because they aren't a professional engagement meeting professional standards.

The TL; DR of this is that I am extremely uncomfortable with VMT and its counsel brandishing an agreed upon procedures engagement to the public as some sort of imprimatur or Good Housekeeping seal of approval that they are in great shape and will continue to be so.

The business health of any enterprise is inherently related to how it will be managed in the future and the market conditions it faces and how alert aware and oriented it will be-no accounting firm will or can offer an opinion on such subjective and non-qualifiable things.

Even the notion of whether or not funds were "mishandled" is subjective. An auditor's job is to determine whether or not there are material misstatements due to errors, omissions or misstatements. We may find suspected fraud-but the finding of fraud is something that is determined by a judge and a jury, not an accounting firm. Typically cases of suspected fraud are reported to the BodD. Auditors are not police detectives.

Now to complicate matters more; auditors following the "Yellow book" (typically government auditors) can conduct other types of engagements such as performance audits that can offer opinions about the effectiveness or efficiency of an enterprise or some aspect of it; typically, this will be related to public moneys received as grants or for a contract and their reports might be used as the basis for legal action, but of course the audit report would be mere evidentiary matter; subject to examination and cross examination.

I would think typically, a law firm would be engaging a CPA firm to do an agreed upon procedures engagement, because they are likely to be interested in some specific aspect of some entity.

As previously explained; AUP's are intended for specified parties and no doubt the law firm would want that limited to them or perhaps some party the law firm represents.

Remember, CPA firms also have confidentiality requirements as well, and I think the only legitimate disclosure of an AUP report beyond the specified parties would be to a peer reviewer or in response to a court subpoena.

Would I be surprised if, and I stress if- VMT's counsel used an AUP report by suggesting it provided it provided some sort of a public seal of approval regarding VMT's use of funds or financial viability/stability-either because they don't know, don't care or believe that doing so was vigorous client representation? Not really.

It's been my experience that lawyers don't understand what accountants do unless like youtuber Jasmine DiLucci they are dually licensed.-or in her case triple-she's an attorney, CPA and Enrolled Agent. I once had to end a meeting about a rudimentary accounting practice with one of our assistant general counsels with "I've explained in twice, so given the limits of my explanatory power, I suggest you accept it as described or enroll in basic accounting at Harrisburg Area Community College".

I have received word from a reliable source that the state of Virginia offered VMT money in return that they run 611 out of Goshen again this year. Evidently VMT told the state thank but no thank and that they would rather keep the engine on display in Roanoke. Also I have been told that VMT has not payed NS for any of the ferry moves from 2023. Also NS is about to pull the switch for the two northern Most tracks at the museum as apart of realigning their mainline alongside the museum. Doesn't sound like good news for VMT or 611. In regards to the state of Virginia wanting steam to return to Goshen I have been told that they offered the same deal to another group which has accepted the offer, but they will not be ready until 2026 at the earliest.

I wonder if VMT was thinking that the State of Virginia wouldn't be smart enough to find another qualified steam operator for their own tourism needs and could use it as leverage to ask for more money.

If NS is pulling rail access to the museum I wonder what that will mean for the equipment they have stored out int he yard that they don't have room for. Based on Google Earth Stellite photos its still there and includes, but not limited to an NKP GP7, RF&P E8, NW/EL/CR SDP45, two wreck derricks, some other assorted diesels and passenger cars.

Sounds like the VMT is reaping what they sowed.

I'd be surprised if VMT lost totally an active rail connection. That would be a death sentence for any operation for sure.
They also have 1-2x 4-8-0s in the weeds out there somewhere.

Major F' up on the part of VMT if all of the above is true, but maybe like steamtown, they simply don't care and want to focus on being a static museum.

No doubt the new 614 group is involved in the 2026 goshen ops, or even one day the 2716 would be a regionally accurate locomotive to operate there, as they seem to have given up on "being given" the csx EK.

I’m glad i saw her run when I did! Chased a few trips on the NS including the loops, rode behind her unassisted out of Roanoke on her home rails, and got to ride and photo multiple times at Strasburg (those Lerro charters were incredible!).

I never thought I’d see her run… so thankful for what I got!

However….. this is a sad end to the story…. Lots of people spent lots of dollars and time to have her running.

Don't despair yet. No offense to NOVArailfan, but a rumor is just a rumor.

This is no more an 'end to the story' than the events in 1992 were.

I expect the current situation to be resolved in a shorter time than that. In the meantime, I'll happily watch 614's restoration, and the completion of the work on 1309 (see recent Facebook posts showing the work being actively done)...

I can say that I believe these rumors are true. VMT has cancelled the lease on the four Atlantic Railway Bilevels (one of my coworkers and a friend have been hired to prepare the cars for movement). They have also told Will Harris to remove his 0-6-0 from the Museum grounds. The Museum is also losing access to the two tracks that do not go under the covered portion of the rail yard.

Why is NS removing the switch to those tracks? It comes off the spur leading to the rest of the VMT trackage I believe?