In a June 2007 report, the auditors concluded that the Baltimore City Foundation was "improperly benefiting from the interest earnings on funds received" and asked that the Circuit Court return $86,300 to the state. The foundation cut the check.
The audit did not delve into why the Baltimore City Circuit Court deposited state money into the foundation instead of the city budget. In a recent interview, legislative auditor Bruce A. Myers said state funds deposited in the foundation account would naturally receive less scrutiny because the city does not audit that spending. He noted that the state could not review the foundation accounts either because it can only examine state funds.
In 2002, when the foundation set up the account at the request of the Circuit Court, Ellen M. Heller, then the administrative judge, wrote to Ivey: "...interest from the fund shall be retained for the sole use and benefit of the court and become part of the greater Court fund."
But Holland said she did not know until contacted by the legislative auditor's office that the money in the foundation was generating interest. The foundation should have told her, Holland said. It is the foundation's job to determine whether transactions comply with federal nonprofit law, she said.
"I tell them what I'm going to use it for," Holland said. "It's their job to figure out whether it's being properly used."
Ivey, the foundation's president, said he didn't think it was proper for him to question how the Circuit Court uses the money deposited in its foundation accounts.
"I couldn't pass judgment on that," he said.
Ivey said he wasn't aware of the state legislative audit and does not remember returning the more than $86,000 to the state.
Cylburn center
Baltimore's Recreation and Parks Department steered a $247,500 contract to a city architectural firm without competitive bidding, spending private money deposited with the foundation.
Mayor's inaugural
A $20,000 contribution from Whiting-Turner Contracting Co. was earmarked by the foundation for citywide recreation programs. Most of the money was spent on Mayor Sheila Dixon's inaugural events.
Court audio/video
The Baltimore Circuit Court shifted $1.9 million in state funds to the foundation. The funds, intended for a new court audiovisual system, improperly generated more than $86,000 interest for the court.
