The Tennessee Multicultural Chamber of Commerce won't be getting any money from Chattanooga or Hamilton County this year.
The city and county have put money into the minority Chamber each year since it was formed in 1999. For 2012, the Multicultural Chamber requested $150,000 from the city and $75,000 from the county.
The governments initially had allocated $75,000 each for the coming year. But after the Chattanooga Times Free Press revealed inconsistencies and omissions in the Chamber's budget requests in a front-page story June 19, the city and county mayors each zeroed out the allocations.
"It will take some extraordinary review and consideration before we would put it back into the budget," Chattanooga Mayor Ron Littlefield said.
Hamilton County Mayor Jim Coppinger said the county would consider a closer review of budget requests in the future.
"It's the people's money," he said. "We're responsible for being the stewards and making sure it's being spent responsibly."
Sherrie Gilchrist, executive director of the Multicultural Chamber, did not return a phone message seeking comment Friday.
The Times Free Press review showed the Multicultural Chamber spending about $350,000 this year to operate an office and pay two staffers while spending less than $34,000 on programs.
The Multicultural Chamber formed in 1999 as the African-American Chamber, with Gilchrist as its director. Supporters said the larger Chattanooga Area Chamber of Commerce wasn't providing enough resources, training and contacts to help small, minority-owned businesses compete for contracts. The agency became the Multicultural Chamber in 2007.
In an interview for the June 19 story, Gilchrist said the agency has about 575 members.
A member list on the website - which may not be current - includes just 208 names. A Chamber board member previously said many members have dropped out.
Membership fees range from $40 for students and $100 for individuals, up to $1,500 for businesses with sales up to $5,000, plus additional tiers of $5,000, $10,000 and $20,000 for larger corporate members.
Gilchrist told the city and county the Chamber offers at least a dozen programs a year to help minority business owners access training and make contacts, but the organization's website lists only two events to date this year.
Gilchrist said the Chamber has put on 15 to 20 events so far this year. She said notification goes out in a weekly email blast to 15,000 people. She said in mid-June she would add the Times Free Press to the list but had not done so as of Friday.
The newspaper found mismatches in revenue, salary and spending claims in the Chamber's budget requests to the city and county. Lewis Lavine, executive director of the Center for Nonprofit Management in Nashville, said the inconsistencies raised red flags.
For instance, a narrative portion of the request describing the Chamber's operations and membership claimed the program is growing fast. But attached financial information showed membership revenue actually had fallen by $40,000 since the 2010 fiscal year, to $129,000.
The $467,840 operating budget included $102,786 for salaries. But an attached salary schedule showed a $112,000 salary for Gilchrist and $42,179 for an aide.
Gilchrist previously said the salary listed in the operating budget should have been about $154,000. She could not explain why an incorrect figure was listed, although she said she prepared the requests.
In the budget request given to the county, Gilchrist's salary line was X'd out. When county commissioners questioned the omission, she blamed a glitch in the spreadsheet software.
Both requests had the same overall operating budget, but some individual spending items appeared in only one request. For example, the city request budgeted $10,000 for fundraising expenses, but that line was missing from the county request.
The Chamber also reported different numbers of people benefiting from its programs in its requests to the city and county, and breakdowns of beneficiaries by age, sex and ethnicity didn't add up.
Earlier, Gilchrist explained the differences by saying the city and county budget requests were due on different dates and that the Chamber updated information on the later request.
The city requests but doesn't require an audit from agencies that receive taxpayer money.
Though the Multicultural Chamber budgets for an annual audit, Gilchrist said the 2010 audit was not ready. That would cover the fiscal year that ended June 30, 2010.
Littlefield said Thursday that Gilchrist met with him Wednesday about the funding request.
He said Gilchrist brought a copy of a prior-year audit that city finance officials will study.
"We'll be fair. We'll take a close look at the figures and the audit, share them with the council and see what they want to do," he said. "This is not a good year for things that are not well supported by facts and figures."
While larger requesting agencies have regular audits, he said, to require an annual audit would be a burden on smaller agencies.
"We don't have that many missed stitches. Of course, one could pop up from time to time, but most of the agencies we deal with are old, mainline agencies."
The county is giving $525,000 and the city $450,000 to the Greater Chattanooga Area Chamber of Commerce this year. The larger Chamber partners with both governments on economic development and job creation.
Coppinger called that funding a "good investment of taxpayer dollars."
"The Chamber plays an integral part in economic development and recruitment, and that pays large dividends," he said.