Multicultural Chamber pledges transparency; auditing firm quits

Multicultural Chamber pledges transparency; auditing firm quits

July 20th, 2011 by Cliff Hightower in News

This building at 353 Chestnut St. houses the Tennessee Multicultural Chamber of Commerce in Suite 200.

Photo by Jenna Walker/Times Free Press.

Document: Response to auditor questions

Tennessee Multicultural Chamber's response to auditor questions.

The Tennessee Multicultural Chamber of Commerce handed the City Council answers to 18 questions Tuesday about financial dealings, land acquisitions, and salaries and travel expenses for employees.

One council member questioned whether it was enough.

"We've received 18 answers, but we didn't receive 18 complete answers," Councilman Jack Benson said during the council's regularly-scheduled business meeting.

The council had told the Chamber to deliver answers to 18 questions posed in a city review last week by City Auditor Stan Sewell. Council members also said they wanted a current audit provided. Audits from 2005 to 2009 are available, however, more recent audits are not. The Chamber said the firm that has audited its books for the last five years quit.

"Effective immediately, we will cease our services as your auditors," a letter from Mann & Miller P.C. to the Chamber states. "We have reached this decision reluctantly and after substantial deliberation because we do not feel that we can continue to provide your organization with the level of services you require."

Board member John Taylor and Executive Director Sherrie Gilchrist attended the meeting. Taylor said afterward he knows there are "clouds" over the Chamber and he welcomes any additional questions about chamber finances.

"We want to answer all the questions," Taylor said.

The city review questions why the Chamber borrowed $71,000 more on a land purchase than what it paid for the property, why Gilchrist received more in salary than other similar nonprofits in the area and what is the justification for paying an average of $27,000 a year in travel.

According to the city review, Gilchrist made anywhere between $134,0000 to $146,000 a year between 2008 to 2010.

Taylor disputed many of the review's assertions, saying "there are a whole lot of things incorrect."

FUNDING SET ASIDE

The City Council voted 9-0 Tuesday night to set aside $75,000 in economic development funds to support an entity that could help minority or multicultural businesses within Chattanooga. Council members did not name the recipient of the funding, saying they could do so at a later date.

Taylor said Gilchrist earns about $119,000 annually. Her salary is appropriate when compared to salary ranges provided by the National Black Chamber of Commerce.

"The salary is within the guidelines of members, budgets and 12 years of service," the response states.

Gilchrist also sits on the board of the National Black Chamber of Commerce.

The Chamber report also defended its use of travel money, saying Gilchrist serves on a committee of the U.S. Chamber of Commerce and must attend meetings in Washington, D.C., attends board meeting for the National Black Chamber of Commerce that meets in different locations, goes to a International Trade Advisory Committee that discusses international trade issues and also incurs expenses such as traveling to the BMS plant in 2009 at a cost of $2,500.

"We used no city or county money for travel," Gilchrist said.

The report also defended the Chamber paying $47,000 a year in rent.

"Management offsets the cost by leasing space to other small businesses," the report states. "The TMCC receives more than 40 percent of its revenues from leasing space."

The city's review also questioned Chamber land deals and whether the Chamber has designs to build a Business Solutions Center on M.L. King Boulevard as promised. Taylor and Gilchrist said that architectural plans had been drawn up for the property.

"We're not developers," she said.

Gilchrist said the Chamber tried to shop around for business partners and land developers, but the economy turned south and the group was left holding the bag on five properties it acquired through a community development loan and a grant from the U.S. Department of Housing and Urban Development.

One portion of the property acquired was to be in a land swap with a current University of Tennessee at Chattanooga property, the chamber report states.

The Chamber said it still plans to obtain $3.5 million in funding to match the HUD grant. The group said it would look for donors and developers.

The Chamber also defended a land acquisition in which almost $500,000 in loan money was used to buy property valued at $211,800.

"The TMCC reviewed appraisals on adjacent properties and purchase prices on similar properties," the Chamber document states. "Also, the TMCC utilized documents from the city of Chattanooga that came from a study of all commercial property on the M.L. King Boulevard."

Taylor said Tuesday night the chamber would clear its name.

"Everything can be accounted for," he said.

MORE: Federal agents ask questions about loan to Multicultural Chamber