More to the Story

According to the May 4th article in the Tacoma News Tribune in which the Tillicum Community Center feared loss of funding which a follow-up article now declares is reality – the decision based upon “concerns with its past financial reporting” – Jeff Gumm, Lakewood’s program grant coordinator said that “the city is required by HUD to review the finances of the groups that receive the money every two to three years.”

Federal funding dollars are audited not annually but “every two to three years”?

OK, so would not previous audits have revealed the problems with the Center the City says now are so severe the Center’s funding is no more?

The amount the Center received each year from the city ranged between $60,000 to $90,000 in federal money, as stated by TNT reporter Brynn Grimly.  With audits performed “every two to three years” then there should be anywhere from four to seven city reviews of the Center’s financial operations since the year 2000 when the Center reportedly began receiving HUD funds.

If in fact previous year’s audits were performed, why are basic bookkeeping matters only just recently being addressed?

The financial difficulties of the Center came to the attention of the Tillicum Woodbrook Neighborhood Association (TWNA) board in the Lakewood City Council agenda packet for March 17, 2014.  In that packet was the recommendation of the Citizen’s Advisory Board (CAB) from its January 22, 2014 minutes, namely, that the Center should not receive funding in 2014 because of “reporting deficiencies – financial reimbursement requests, reports and other information.”

A Public Disclosure Request (PDR) dated April 11, 2014 and received April 25, 2014 specifically asked for “any and all documentation that concerns this matter (the financial and program status of the Center) including correspondence between the CAB and the Center that would reflect the unmet reporting expectations of CAB and the Center’s replies.”

Accordingly the city supplied a letter dated March 25, 2013 by Dave Bugher, assistant city manager of community development, addressed to the executive director of the Center and all Center board members. 

In that letter Bugher delineates a number of rather basic bookkeeping deficiencies. 

For example, the Center “did not have in place adequate financial management systems to ensure effective control of CDBG (Community Development Block Grant) funds” – the funds the Center had been receiving the past 14 years and the disbursement of those funds ostensibly reviewed regularly by the city. 

Moreover, Bugher wrote, the Center “is lacking in effective internal controls and program oversight by the Board of Directors,” with “the Executive Director (having) sole control over many functions of the financial process, including payroll, payment of all taxes and labor reporting requirement without a clear link to a Board review and approval process.” 

The danger of this Bugher wrote is that “without proper separation of duties and/or Board oversight, the Center cannot effectively control or minimize the opportunity for someone to perpetuate or conceal errors or irregularities in the normal course of duties.” 

Additionally Bugher included a 60-day demand for “the Center (to) include processes and procedures for the creation and adoption of a formal budget and reporting procedures to the Board of Directors, expenditure approval authority timelines for record maintenance, and Board Member policies and responsibilities.” 

But based upon the HUD requirement, according to Gumm, “to review the finances of the groups that receive the money every two to three years,” how does an agency receiving tens of thousands of federal dollars annually - for the last fourteen years - do so without a “financial management system” i.e. basic budget by which to control those funds - the funds they had been receiving for nearly a decade-and-a-half - without one of the city reviews having discovered the issues the city says now exist?

Bugher wanted a budget, proof of board oversight, a delineation of board responsibilities, and evidence of adequate record keeping. 

The basics. 

But again, how do you receive $60,000 or more a year for 14 years, with city reviews “every two or three years,” and only recently be found wanting in the basics-of-budget department, let alone not have all those systems in place from the get-go?

And what of the 60-day reply requirement demanded over a year ago of the Center by the City the results of which, requested in the recent PDR, evidently do not exist as nothing was received? 

Culpability works both ways.