Vancouver’s Croatian Cultural Centre hit with $437,000 CRA penalty after damning audit

Vancouver’s Croatian Cultural Centre faces major uncertainty following a damning audit by the Canada Revenue Agency.

Documents obtained by CityNews indicate that in October, the federal revenue service notified the United Croats of Canada, King Tomislav Branch, that it had identified five areas of non-compliance. As a result, the agency proposed a penalty of $436,578.56 for the registered charity.

The audit highlighted a number of violations under federal charity rules during 2017 and 2018, including operating three unrelated businesses. Those businesses included an events centre, a bingo centre, and a members’ lounge.

A bank deposit analysis by the CRA also found the amount the charity reported on its T3010 Registered Charity Information Return form was “far greater” than the amount deposited into bank accounts. The agency notes the charity provided no explanation for that variance.

Beyond financial penalties, the CRA also outlined the possibility the organization could lose its charitable status.

CityNews has obtained a board document indicating the charity has chosen not to respond to the CRA’s audit, and as a result, will accept financial and other penalties the agency imposes.

CityNews asked to interview members of the board of the United Croats of Canada, King Tomislav Branch, but has only been able to correspond by e-mail.

When asked about the viability of the charity moving forward, the board wrote, “… We are only in a position to assure you that we remain open, and are looking forward to hosting cultural community events in the New Year. Beyond that, we are consulting with our community and stakeholders on the focus for operations moving forward, as is indicated on our website.”

The Croatian Cultural Centre website posted a message on its website, which reads:

“The Croatian Cultural Centre has begun restructuring its operations for both the short and long term. While the Centre will no longer be accepting bookings for private events, it will remain open to the public with a focus on educating and thereby fostering in the community as a whole, a better knowledge and understanding of Croatian ethnic, national and cultural traditions, heritage, language, and customs. Thank you to the community for your understanding and support.”

The Commercial Drive-based Croatian Cultural Centre has been a major cultural and social hub in the city since 1986, and the fact it’s not taking private bookings for the foreseeable future has been highlighted as a concern in a region already short on event spaces.

CityNews understands the Chartered Professional Accountants of British Columbia received a complaint relating to a board member in place during the audit period, with that claim also suggesting that board member also acted as the charity’s accountant.

The future of the cultural centre remains unclear, but it is understood the charity is carrying significant debt and its revenue has plummeted during its current restructuring process.

In the event a cultural community centre is unable to continue operating on the property, the City of Vancouver has the first right to purchase the site under an agreement made at the time the city initially sold the land to the charity.

A well-placed source informs CityNews the city has eyed the site for some time as a potential location to build affordable housing.