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Sherrie Gilchrist is the executive director of the Tennessee Multicultural Chamber of Commerce.


• $4.4 million: Total amount expected to support the construction of a Business Solutions Center

• $3.6 million: Amount of cash the Tennessee Multicultural Chamber of Commerce said it would raise in addition to federal grant funds

• $545,000: Amount of grant to Multicultural Chamber from the U.S. Department of Housing and Urban Development

• $306,400: Amount of money used to purchase land for Business Solutions Center and for planning and project development

• $238,600: Total amount of HUD money unaccounted for in construction of Business Solutions Center

Source: Chattanooga

The U.S. Department of Housing and Urban Development wants to know what happened to $545,000 it gave to the Tennessee Multicultural Chamber of Commerce for a new business center that never materialized.

The department is sending a letter of inquiry into the matter to the Chamber and it expects documentation on how and where the money has been spent, a HUD official said Friday.

"HUD will issue a written inquiry directly to the grantee asking for a response to the audit and any other issues as may be identified by HUD," HUD spokesman Joe Phillips wrote in an email. "That request will require the grantee to submit source documents [bills, invoices, etc.] to support the expenditure of grant funds as well as additional information."

Phillips said the Chamber would have 15 days to submit the information. He gave no indication whether the letter had been sent.

"Any subsequent actions would depend upon HUD's review of the grantee's response," he said.

Richard Beeland, spokesman for Mayor Ron Littlefield, said Friday the administration expected the HUD response.

"And I'm sure there will be additional questions," he said.

Council Chairwoman Pam Ladd said she also was concerned after hearing the latest developments.

"Maybe the wound is deeper than we realized," she said.

Chamber Executive Director Sherrie Gilchrist and board member John Taylor did not respond to calls Friday.

The Chamber has been under fire this week after City Auditor Stan Sewell released a review of the organization that questioned the group's business practices, financial management, high salaries, large travel expense budgets and expenditures. Among those were the purchase of five pieces of property along M.L. King Boulevard to build a Business Solutions Center that has yet to happen.

HUD money paid $200,000 for three of those properties, according to the review, while $106,400 in HUD money went for planning and project development. The remaining $238,600 in HUD money is unaccounted for, the review states.

According to the Chamber's annual financial statements from 2006 and 2008, the completion date for the business center originally was set for June 2008, but each year it was pushed back by 12 months until 2009, when the Chamber didn't mention it at all in its statement.

Sewell's review also posed 18 questions about the expenditures of the Chamber. City Council members have said they want those questions answered, along with an internal audit by the Chamber. The deadline for the answers to the questions is Monday, city officials said.

City Councilman Russell Gilbert said Friday the inquiry does not change his opinion of what is needed from the Chamber.

"I want them to come to us and answer the questions," he said.

Some other points made by Phillips about the HUD grant are:

• The Chamber was required to file semiannual and annual reports and HUD is reviewing the reports on file.

• If the initial inquiry shows any instance of waste, fraud or abuse, HUD would refer the case to its Office of the Inspector General and the HUD Enforcement Center. Based upon their investigations, the case could then be referred to the U.S. Department of Justice.