CHATTANOOGA (WRCB) - When it comes to the city budget, the Multicultural Chamber of Commerce was not included.

Funding for the agency was not included in the spending plan Tuesday night.

The city council has been deciding which agencies to support with sales tax revenues no longer shared with the county since the end of the tax agreement.

A city audit found the Multicultural Chamber had "extravagant expenditures" and rising debt.

Council members gave the organization a list of 18 questions they want answered by next week, along with an audit from last year.

1. Where does TMCC expect to obtain the $3,500,000 of funds necessary to complete the HUD funded BSC?

2. If TMCC has no anticipated source of funding for the BSC, how does the organization plan to repay the HUD funds totaling $545,000?

3. Why did TMCC continue to draw down HUD funds after the initial year when no sources of revenue seem to be appearing to fund the remaining portions of the project?

4. What efforts did TMCC make to raise money for the BSC? Did TMCC ever have an intention of completing the BSC?

5. Current tax appraisal on the land purchased for the BSC is $78,000. What was the justification for paying $200,000 for this land? Was an appraisal obtained prior to purchase?

6. Who was paid in relation to the BSC planning, project management, and administration costs ($106,400)? Can the TMCC provide detail reports, designs, etc. related to these costs?

7. What was the purpose of the acquisition of the two lots via notes payable in the amount of $579,269?

8. The two lots were capitalized at $507,630. Why was the associated debt $71,639 more ($579,269 - $507,630)? Was this used to fund the continuing operating losses?

9. Tax appraisal on the two lots totals $211,800. What was the justification for expending $507,630 to purchase them (and incur $579,269 of debt)? Was an appraisal obtained prior to purchase?

10. The two lots were purchased when the organization was running overdrafts (no liquid assets) and consistent operating losses. How did the organization expect to service the debt on this land acquisition at the time the decision was made to purchase?

11. Why has the interest rate on the organization's line of credit increased during a time of historically low interest rates?

12. Why have management and the board not taken action to reduce expenditures when losses have consistently been incurred from year to year?

13. What comparison and analysis has the board made to set the CEO salary?

14. Can the organization provide a detailed breakdown of travel expenses along with justification for each trip?

15. The organization expends $47,000 per year for rent (excluding utilities). Considering TMCC has only two employees, has management considered alternate facilities?

16. Can the organization explain why the audited financial statements for fiscal year ending June 30, 2009 were not completed until almost two years after the fiscal year end (June 20, 2011)?

17. When does the organization expect to have its audited financial statements for June 30, 2010?

18. Can the organization provide a current list (as of June 30, 2011) of all assets specifying their current market values, along with a list of all liabilities?

If the council is satisfied with the agency's response, they can amend the budget. 

[Read the full Tennessee Multicultural Chamber of Commerce audit]