City Foundation told to provide documents

Council panel questions fund collection, distribution

December 03, 2009|By Julie Scharper | julie.scharper@baltsun.com

Leaders of the embattled Baltimore City Foundation must provide documents explaining how they collect and distribute funds, the number and type of accounts that belong to each city agency, and how much work is done for the nonprofit while employees are on the city's clock.

The demands came at the end of a two-hour hearing Wednesday night, during which members of the City Council's legislative committee barraged the foundation's president, the city's finance director and the heads of city agencies about how the nonprofit handles money.

"No one is questioning the good works that the foundation does and has done and continues to do," said the committee chairman, Councilman James B. Kraft. "What we do have grave concerns about is the total lack of transparency with this organization and the total lack of proper accounting of the money that it brings in."

The foundation's president, Lenwood M. Ivey, spoke of the accolades the nonprofit, which was set up primarily to raise money for the poor and had a $7 million treasury in 2008, has received in nearly 30 years of operation in the city. "All requests are carefully reviewed by the president and board chair to be ensure they meet the foundations mission of enhancing the quality of life for Baltimore residents," he said, adding that extensive steps are taken to guarantee proper accounting.

The hearing followed a Baltimore Sun investigation that showed that city officials spend foundation money with little oversight, skirting rules that typically apply to government expenditures. In recent years, the fund was used to pay for an ice sculpture and skating rink during Mayor Sheila Dixon's inaugural celebration. A $1 million donation to build a new visitor center at the Cylburn Arboretum was channeled through the fund, allowing the selection of an architect without competitive bidding.

The investigation led city officials to call for an independent audit and an ethics board review.

Among the accounting discrepancies that council members discussed at the hearing was $600,000 that was listed as salary money on the foundation's annual report. Yet Ivey, who earned $18,900 in 2008, is the foundation's sole employee.

The auditor who prepares the foundation's financial records said that the money was used to pay young people who take part in a city jobs program and should have been listed as contract expenses on audit reports. Upon further questioning, the auditor, Kara King of King, King and Associates, said that the funds should be listed as gifts since they are distributed to city departments to pay the salaries.

Kraft asked that the foundation provide documentation of its operating policies, application process and criteria for expenditures within the next 30 days. A second hearing will be scheduled in about three months, he said. In the interim, the foundation's leadership is slated to meet with representatives from the Maryland Association of Nonprofits.

"You get the impression that no one really knows what's going on there," Kraft said of the foundation after the meeting. "The most important question of the public right now is if the foundation put together a structure under which they can operate. Right now the pieces don't add up."

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