Narconon Southern California: Analysis of the 990 filings

Last updated on June 04, 2008 15:56

Introduction

The content of this article is based on information from Narconon Southern California's ("Narconon SC") 990 filings, and other sources. New information could come along which might have influence on the conclusions presented.

Number of clients served: false statements and possibly operating illegally above capacity

As of April 2007, Narconon SC was operating two residential facilities:

Source:
Department of Alcohol and Drug Programs: 08/03/2000, 06/09/2004, 04/06/2005, 12/05/2005, 09/13/2006, 01/08/2007
San Diego County Planning Commission: 09/20/2002, 04/30/2004

In its statement of accomplishments, Narconon SC states that its rehabilitation program lasts "3-to-5 month," an average of four months (122 days). To further support this, in a study submitted to the City of Manistee Planning Commission, Narconon Stone Hawk states that the average length of stay for its clients is 129 days. ^[ref] For Narconon SC, we can calculate the average number of days people stayed on the Narconon program at most, using the resident capacity:

First observation, the drop in number of clients completing the program in 2005 is surprising. What happened in 2005 to explain this drop?

In 2005, from the 990 filing, we can see that Narconon SC contracted Chapman House for "transitional care," which probably means that its own residential facility were fully used. Also, in 2005 the average number of days clients stayed on the program was 126 days, or slightly over 4 months, thus agreeing with Narconon's statement that the program takes 4 months on average to complete.

The problem with the above table is that it is assumed that all clients that enrolled, ended up graduating, which is very unlikely. Narconon of Oklahoma's and Narconon Stone Hawk's numbers, even if arguable, show that not all enrolled clients complete the program, which is expected from any drug rehabilitation program. So the figures above come from an unrealistic best case scenario.

In 2004, even with this best case scenario, clients completed the program in just 47 days on average. In 2002, clients completed in just 45 days. This is way out of range of Narconon's own statement of a 3-to-5 month program (91-to-152 days). If one assume that realistically not all completed the program, the average number of days per client would go even further down. How does Narconon SC explains that the efficiency of its program varies so much from one year to the other?

So the figures don't make sense, and this implies one or more of the following:

• Narconon Southern California gave false statements on its 990 form filings
• Narconon Southern California operated illegally above its resident capacity limit in 2002-2004

Another way to see if the stated number of clients make sense, is to correlate with the revenue/expenses related to the drug rehabilitation program. According to the numbers supplied by Narconon SC in its 990 filings, which are official, on the record statements:

Here is a graph representing the progression of clients/revenue/expenses relative to the year 2002:

Normally, one can expect a correlation very close to 1-to-1 between the number of clients, the revenue obtained from these clients, and the expenses incurred to serve these clients. However, as can be seen, the correlation is poor, especially for 2005. This confirms that Narconon Southern California made false statements in some or all of its 990 filings.

At this point, the question is, in what year did Narconon SC give truthful information in its 990 filing, if any?

The year 2005 seems to be the year were the information provided could be close to reality. This, because the stated number of clients that completed the program, corrected to account for clients that didn't complete the program, and corrected to account that Narconon SC outsourced significantly it seems (Chapman House, $358,992), do not seem to contradict its claims of 3-to-5 month program, and its residency capacity limits.

So now, here is how the graph looks if we take 2005 as the base year:

If we assume that the 990 filing of 2005 contains truthful statements, clearly the number of clients was falsely reported in the previous years. Now why would Narconon SC suddenly start to report numbers that are closer to reality in 2005? This might be because of allegations that Narconon SC operates above its resident capacity limit (see Stop Narconon in Newport Beach! for more information on that), and its 990 filings could actually be embarrassing evidence, their own statements, that it operated over their capacity limit.

In any case, at this point it is clear that Narconon Southern California made false statements in its 990 filings, which is a serious offence, as the 990 filings are used to evaluate how well-managed is a charity, in order to ensure that funds are spent to provide useful services to the community.

Drug rehabilitation: revenue/expenses

Probably the best way at this point to figure the real number of clients served by Narconon SC is using the revenue from the drug rehabilitation item. Narconon charges a flat free for its service, regardless of the length of the stay.

[to be completed]

See also

• Non-profit entities with links to Scientology: 990 filings
• Scientology fronts: financials