Inconsistencies raise questions about agency

Inconsistencies raise questions about agency

June 19th, 2011 by Judy Walton in News

Sherrie Gilchrist is the president of the Tennessee Multicultural Chamber of Commerce. Staff File Photo by Chattanooga Times Free Press.

Document: Sherrie Gilchrist's Statement

Making its pitch to city and county leaders this spring for $225,000 in taxpayer support, the Tennessee Multicultural Chamber of Commerce said its membership and programs are growing quickly, helping to develop minority businesses.

But the paperwork the Multicultural Chamber gave to Chattanooga and Hamilton County to support its funding request for the coming fiscal year paints a different picture: an agency with falling membership and shrinking revenue that will spend more than $350,000 in the coming year to pay two employees and run an office and spend less than $34,000 on programs.

Though the city and county each have placed $75,000 in their 2012 budgets for the Multicultural Chamber, inconsistencies in the organization's budget requests - including questions about the executive director's salary - have prompted another look by city and county leaders.

"That sounds very excessive to me," County Commission Chairman Larry Henry said of the salary and office costs compared with spending on programs. "I'd like to know what the Multicultural Chamber is really doing, how effective they really are."

One expert in Nashville said the inconsistencies raise "red flags."

City Councilwoman Carol Berz, chairwoman of the Budget Committee, said questions about the Multicultural Chamber's budget request should be answered.

"We work under the assumption that what they tell us is true," she said. "Any agency that has discrepancies, I think the public needs to know that."

Hamilton County Mayor Jim Coppinger said some commissioners expressed concern about the funding during budget hearings earlier this year.

"It currently is in the budget, but the budget has not been adopted," Coppinger said.

Chattanooga Mayor Ron Littlefield said the city's auditor "will take a close look at [the request] before we carry that item through to the final budget."

Sherrie Gilchrist, executive director of the Multicultural Chamber, said in a written statement that the organization is the main point of contact between public and private agencies that seek to connect with minority-owned businesses.

"They call the TMCC looking for companies that can meet their needs. There is no other place to call," Gilchrist wrote the Chattanooga Times Free Press.

The city and county will be voting within weeks on their 2012 budgets.

BY THE NUMBERS

The 2012 request is at least the second year that budget requests submitted to the city and county by the Multicultural Chamber had inconsistent numbers for salary, spending and program results.

Several elected officials interviewed for this story said they had questioned the Multicultural Chamber's funding and effectiveness but they were cautious about public perceptions.

Councilman Manny Rico was blunt.

"I know some people are unhappy, but you want to pick your battles," Rico said. "I think people get a little frightened they're going to use the race card on them."

Gilchrist has been executive director since what was then the African-American Chamber formed in 1999. Supporters at the time 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 organization became the Multicultural Chamber in 2007.

In its budget request to Chattanooga for the coming fiscal year, the Multicultural Chamber says its operating budget is just less than $468,000.

The request said the Chamber serves 535 "stakeholders" and has provided 11,425 businesses with technical assistance as well as helping small, minority, women- and veteran-owned businesses secure $233 million in local contracts and create more than 600 jobs.

To a question in the budget request about the program's goal, Gilchrist stated: "The TMCC has grown much faster than anticipated and with that growth comes new opportunities to serve more."

That's not what the Chamber's numbers say.

Revenue from memberships is budgeted for $129,000 in 2012, down more than $40,000 from 2010.

"A lot of members didn't come back," said Tony Taylor, an EPB employee who was on the Multicultural Chamber's board until early this year.

Other board members could not be reached or did not respond to messages seeking comment.

In a telephone interview, Gilchrist said the Great Recession was a hard hit for Multicultural Chamber members.

"Some people have gone out of business these last two years, and they have not kept their memberships," she said.

HOW MANY EVENTS?

The Chamber's 2012 budget request lists $3,600 for meetings, $5,000 for marketing/advertising, $5,000 for printing and $20,000 for an awards banquet, the same as this year's budget.

The request says the Multicultural Chamber offers "more than a dozen events annually that focus on how to do business with various public and private entities."

The Chamber's website lists only two events: a job fair that took place in May and a "Breakfast with Champions" scheduled for June 28 at the Chattanooga Convention Center.

A calendar on the website lists 10 programs - QuickBooks lessons, training sessions and a job fair - that were offered between January and June of 2010, but nothing since then.

Gilchrist said the Chamber has held 15 to 20 events so far this year and advertises them in a weekly email blast that goes out to about 15,000 people.

In her written statement, Gilchrist said the Chamber offers business owners free help with business plan preparation, loan information and other services. She said the Chamber also prints a guide to local minority businesses called "Soul of Chattanooga."

Gilchrist has said in media interviews that the banquet is the Chamber's largest annual fundraiser - last year's goal was $100,000 and the keynote speaker was Donna Brazile, who managed Al Gore's 2000 presidential campaign.

Figures submitted to the city and county, though, show the Chamber budgeted only $70,000 from all grants and fundraisers in 2011 and the coming year.

Gilchrist said the banquet this year was replaced by the "Breakfast with Champions." The keynote speaker is Thomas Loafman, director of purchasing for Volkswagen Group of America.

Loafman also is listed on the Chamber's budget request this year as a board member. He did not return calls seeking comment.

MORE QUESTIONS

The Multicultural Chamber's budget requests and other documents show other inconsistencies, from its director's salary and benefits to the number of people it serves.

For instance, the budget requests to the city and county list Gilchrist's salary at $102,000. But a supporting salary schedule gives it as $112,000 in the city request. The salary line on the same supporting schedule was X'd out in the county request.

When county commissioners questioned the omission in May, Gilchrist blamed a "software glitch" in the Microsoft Excel program.

The explanation didn't fly with Henry.

"I think that's a flimsy excuse at best," he said.

Gilchrist said the actual salary figure is just less than $155,000 for her and an assistant. She could not explain why the incorrect figure was given on the city budget request, although she said she prepared the requests.

Both the county and city budget requests also list payroll taxes at $17,780. That's the same figure as in 2009, when the Chamber had three employees.

Among other mismatches:

• The 2012 request to the city budgets $10,000 for fundraising expenses, but that line item is missing from the county request.

• While the city request budgets $5,000 for educational development conferences, the county request puts the figure at $8,000.

And though the Multicultural Chamber's job is minority business development, neither request shows any money budgeted for minority recruitment.

WHO'S HELPED?

Accounts of how many people the program serves are similarly unreconcilable.

Gilchrist said the current membership is about 575, although a member list on the website has 208 names. The Times Free Press attempted to contact 20 names from the website list and made contact with only one, who declined to comment. Messages left at other businesses were not returned, and many numbers had been disconnected.

It's not clear that the website, set up in 2009, is up to date. The site lists a board of 17 members, but four names don't match the list of board members attached as a hard copy to the Chamber's budget request. That list has 19 names.

The city and county budget requests ask for information on program beneficiaries broken down by age, sex and race. Inconsistencies show up there, too.

For instance, the city request anticipated serving 1,400 people in 2012, up from 1,200 in the current year. But the breakdown listed 1,095 served by age, 750 by sex and 601 by ethnicity, according to the document submitted by the Chamber.

The county request listed 575 beneficiaries in 2012, including 600 by sex and 835 by ethnicity. That request stated that the Chamber doesn't track its beneficiaries by age, even though it did so for the city.

The budget requests ask for three years' worth of beneficiary data - last year, this year and next year - and the mismatches appear in all three years in both requests.

In her statement, Gilchrist attributed the differences to varying deadlines to turn in budget requests to the city and county. She said the city request was due Feb. 3 and the county request March 31.

"The TMCC had more time to review the numbers as they relate to our stakeholder needs," she wrote.

She noted that the Chamber also didn't have money this year for interns to help coordinate the program.

WARNING SIGNS

Lewis Lavine, executive director of the Center for Nonprofit Management in Nashville, said the inconsistencies raise red flags.

"Data must be consistent from grant request to grant request," Lavine said in an email. "It is appropriate to ask why they are so different in these two requests."

Another warning sign, Lavine said, is that the Chamber didn't include a current audit with its budget request.

"In Nashville, any Metro government grant or contract to or with a nonprofit agency requires that the agency have an audit EVERY year as a condition of receiving Metro dollars," Lavine wrote. "It costs the agencies money to do so, but I strongly agree with that requirement here."

Hamilton County officials said they don't require an audit, only a financial statement, with annual budget requests.

Chattanooga asks for an audit, but the Chamber's budget request submitted in February said the 2010 audit was "in progress."

Gilchrist said Wednesday the audit still is not complete. She said the Chamber has been audited each year since 1999. Because the TMCC is a private entity, it does not have to release the audits for public inspection.

TIME TO MERGE?

Some elected leaders have questioned the agency's budget for years. Now some say it's time for the Multicultural Chamber to join the Chattanooga Area Chamber of Commerce.

"We've been saying, 'Why can't y'all merge with the regular Chamber?'" said Rico. "One Chamber has more credibility, more resources to use. Like the city and county need to go metro, these Chambers need to combine resources."

County Commissioner Greg Beck, who serves on the board of the Multicultural Chamber, agreed with Rico.

Though Beck said minority businesses in the past haven't had "fair representation" in the Chattanooga Chamber, "I think we would really be better served if we have a general Chamber that had a multicultural wing."

Beck and Littlefield both said they have spoken with Gilchrist and Chattanooga Area Chamber of Commerce President and CEO Tom Edd Wilson about merging the Chambers.

"We don't want the members who have contributed to the Multicultural Chamber to lose their representation," Littlefield said Thursday.

Wilson said Friday that the big Chamber has become more sensitive to the needs of small and minority-owned businesses. Earlier this year, the Chamber formed an international council to serve those groups, he said.

"We actually started looking at the Hispanic community as a large minority population," he said. "We discovered there are a number of other minority groups that are establishing a business base and becoming a part of our very diverse community."

As far as a possible merger with the Multicultural Chamber, he said that decision would be up to the boards of both groups.

"If the board of the Multicultural Chamber wanted to discuss a possible merger with this Chamber here, I feel certain they [the Chattanooga Chamber board] would be open to conversation."

Staff writer Dan Whisenhunt contributed to this report.