Multicultural Chamber expected to answer audit questions today
CHATTANOOGA (WRCB) – The Tennessee Multicultural Chamber of Commerce will face the City Council Tuesday evening to respond to questions about the organization's spending.
Council requested the TMCC answer 18 questions on what it called "extravagant" spending, including high-rent offices, large salary for its CEO and unaccounted travel expenses.
The 18 questions are:
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?
An investigation by Channel 3 Eyewitness News into the TMCC's finances revealed the organization had failed to make payments in recent months on a $579,000 loan from the Chattanooga's Community Development Financial Institutions (CCDFI).
Channel 3 also has learned that HUD is reviewing the circumstances of a $500,000 grant to the TMCC, $200,000 of which was used to buy three properties on MLK Boulevard, for far more than their appraised values for tax purposes.
"The request will require the grantee to submit source documents (bills, invoices, etc.) to support the expenditure of all grant funds," HUD's Atlanta office spokesman Joe Phillips writes. "If this indicates any instances of waste, fraud or abuse, the Department would refer the matter to the Office of the Inspector General (OIG) as well as the Department of Justice."
TMCC board members, including Executive Director Sherrie Gilchrist were expected to appear at a Hamilton County Commission meeting last Thursday to explain their finances to that body, but never showed up.
Despite repeated attempts by Channel 3 for their side of the story, Gilchrist and other members of the TMCC board have avoided reporters.
Channel 3 will be at the Chattooga City Council meeting tonight and will have the latest as it becomes available on WRCBtv.com
- 18 Questions: City Council awaits minority Chamber's explanation of spending
- Lender: Minority Chamber 2-3 payments behind on $579K note
- Minority Chamber no-shows Commissioners seeking answers to audit
- Multicultural Chamber audit raises questions about spending, results
- UPDATED: City audit cites 'extravagant' spending at Multicultural Chamber
- Read the full Tennessee Multicultural Chamber of Commerce audit