(CNN) – Taking issue with a New York Times report this week on the financial health of the Clinton Foundation, former President Bill Clinton on Friday released an open letter explaining why the organization ran multi-million dollar deficits in 2007 and 2012.
"The reporting requirements on our tax forms, called 990s, can be misleading as to what is actually going on," he wrote in the letter posted on the foundation's website. "Here's why."
The letter went on to explain that when an individual makes a multi-year commitment to the foundation, which is now named The Bill, Hillary and Chelsea Clinton Foundation, they are required to report the entirety of the committed contribution in the year it was made.
For example, he writes, the foundation reported a surplus of more than $102 million in 2005 and 2006 as a result of multi-year commitments, "though we collected nowhere near that."
"In later years, as the money came in to cover our budgets, we were required to report the spending but not the cash inflow," he continued.
At the same time, if an individual makes a commitment that cannot be carried out, the foundation is required to report that as a loss, even though the foundation didn't have that money in the first place or need it to meet the budget, Clinton writes.
"In other words, for any foundation with a substantial number of multi-year commitments, the 990s will often indicate that we have more or less money than is actually in our accounts," he writes.
The New York Times reported the foundation ran deficits of $40 million in 2007 and $8 million in 2012.
Clinton acknowledged the foundation was hit by the economic recession in 2007 but said the $8 million figure for last year is "incorrect" because it was based on "unaudited numbers" from the 2012 annual report.
"When the audited financials are released, they will show a surplus," he writes.
Founded in 2001, the organization focuses on international development and global health initiatives. Since leaving her role as U.S. secretary of state, Hillary Clinton has had a larger presence in the foundation this year.
In the open letter, Bill Clinton writes that in 2011, the organization started re-tailoring its operations to make the foundation more efficient. That includes a move to consolidate the foundation's offices into one primary headquarters in midtown Manhattan.
The New York Times reported extensively on the 2011 review that spurred the foundation to make several changes, citing internal tension between the Clintons' political and philanthropic ambitions as a key cause of concern.
While Clinton details management and operation changes in the letter, he does not specifically address some of the questions raised in the Times report about the family dynamics. Overall, he says the foundation is "in a good position."
"We are in the process of appointing a larger, more independent board and we need an endowment, which our family and friends are working to raise," he writes.