Financial Analysis – Financial Mismanagement

One of the more interesting issues that has come up since the election of new board officers is the former officers’ removal of JACC computers, cell phones, checkbook and other records.  At the 1/17/09 press conference, Steve Jackson, a board member aligned with the “old majority,” gave an interesting justification for their actions:

As fiduciaries of this community, when you come and do an illegal move like that…if 12 people off the street came up and did an illegal move like that, nothing is to be turned over. … You guys have not signed the lease but you went and got the landlord to change the locks.  That’s illegal.  That’s illegal.  We are fiduciaries for this community and responsible for this community’s funds, and I will not turn this community’s funds over to anybody elected as illegal.

The “illegal” move was the election of new officers, something discussed in the post Why the Election of Officers is So Important.  The reason there is a “new majority” in Jordan is that residents were unhappy with the way the Jordan Area Community Council (JACC) has been spending the community’s funds.  And residents aren’t the only ones who are unhappy.  Funders have also seen their money spent in ways they did not intend.

As far as changing the locks, it would seem the “new majority” did what any prudent person would have done if you walk into your office (or home) and discover that someone has entered with a key and removed equipment, records and your checkbook:   you would change the locks to secure the facility.  The new group did not know at that time that it was the “old majority” that removed the items.

Mr. Jackson’s statement that “We are fiduciaries for this community and responsible for this community’s funds…” was certainly true until new officers were elected.  And the information coming to light now shows why the change in officers was necessary.

The new executive officers have been scrambling to resolve one financial crisis after another created by the “old majority”.  In addition to financial issues addressed in other pages on this blog, they discovered:

  • The rent for the JACC office was three months delinquent
  • The electric bill was nearly $500 in arrears as of January 12th and power was about to be shut off when the bill was paid by the “old majority” on January 12th.  The electric bill runs between $45 and $95 per month, so it looks like they had not paid it since the May 20th payment.
  • The gas bill was $603 in arrears.  Current charges (for January, our coldest month) were $96, so this bill, too, was many months in arrears.
  • The liability insurance premium of $1,422 was overdue.
  • Minnesota unemployment insurance (due to the state) of $164 was so far overdue that it was being turned over to collections.
  • Hennepin County is within 60 days of taking over the Probation House property that JACC owns at 2539 Irving Ave because of non-payment of property taxes.  In 2005, JACC filed the required paperwork to be exempt from property taxes because (a) JACC is a non-profit 501(c)(3) organization, and (b) Hennepin County leases the property from JACC and the lease specifically exempts JACC from property taxes.  However, JACC began receiving property tax bills in 2006 and paid them.  Last fall, then treasurer Robert Scott was informed of the history and encouraged to talk with the county to get this cleared up.  County officials began corresponding with former executive director Jerry Moore months ago about a new lease and even sent him the forms to complete to get the tax exemption in place.  Apparently, the only thing Mr. Moore did was stop paying the taxes, not resolve the problem.
  • Last week, JACC was dealing with disconnected telephone service (cut off by Jerry Moore) and trying to stay one step ahead of Mr. Moore as he tried to cut off electric and gas service to the JACC offices, which would have resulted in JACC being responsible for thousands of dollars in property damage when the water pipes likely would have burst in the extremely cold temps we were experiencing.
  • Last week, despite a termination of employement letter to Mr. Moore that said he would receive his final paycheck when he returned all JACC property he had in his possession (including JACC’s cell phones and laptop computers), the “old majority” signed a check to Moore for more than $1,500 to replace the check the “new majority” was holding.
  • This week, JACC received a letter from the American Cancer Society  demanding the work plan that Jerry Moore committed to provide months ago in connection with a grant from them.
  • While all of these bills were accumulating, it should be noted that in 2008, Jerry Moore was paid a salary of $60,000.

This is the group that contends they are the fiduciaries for the community and further claims that they will not turn over the checkbook and equipment because they don’t trust the “new majority.” In fact, the “old majority” was in court today seeking a temporary restraining order to keep the “new majority” from asserting its authority as JACC’s leaders.  One of the “concerns” expressed by the “old majority” was that there were bills that needed to be paid and only Jerry Moore’s leadership could assure the organization’s bills would be paid.

NEWS FLASH:  The “new majority” has paid the bills and brought accounts current, something Mr. Moore obviously was not interested in doing.  It was Mr. Moore who chose not to pay the bills and to put JACC’s credit rating into the dumpster.

The temporary restraining order was not granted today, and there will be a hearing soon on a restraining order being sought by the “old majority” to restore their leadership.  Can JACC survive any more of that kind of leadership?


12 Responses

  1. If the legal system works, Mr. Moore should/will be in very hot water. The corporations that did give money that was not managed properly should file something against the individual THIEF Mr. Moore. It is NOT rocket science what Mr. Moore and the OLD JACC did to the donors AND the people for gosh sakes. He may plead insanity as this is INSANE behavior. If he is NOT stopped and jailed, he will do it over and over and over.

  2. Is it definite that Jerry completed the exec leadership program at St Thomas or did he drop out/incomplete? How would someone verify this?

    • Thank you, goodponyz. I saw the application and the cost of the course. I have not seen in the financial records a check to St. Thomas for the course, so it’s possible a funder paid for it for JACC. I don’t know if Mr. Moore completed the course. I did see at least one debit card use at Starbuck’s for a meeting with his “executive leadership coach,” and a feature of the course was one-on-one meetings with a personal coach. So it appears he took the course, but I can’t tell if he finished it.

      • Further information has become available. It appears that McKnight Foundation paid for the course. And it appears that Mr. Moore never finished the course. I’ll be happy to post updated information if anyone has some.

      • why am i not surprised that Jerry didn’t finish the St Thomas Leadership course? Perhaps JACC should adopt a policy that any tuition, even if coming from an outside funder, is paid first by the staff member, then reimbursed upon completion of the course/class, etc. That is what my ‘corporate’ employer’s policy is. Nonprofit america needs to adopt some of the ‘no b.s.’ policy’s used by corporate america. We obviously have some problems in non-profit america with accountability.

      • I think that some courses cost more than many of us could afford (although Jerry’s $60,000 salary might have put him in a different class). Organizations I have worked for in the past have done it both ways. Some pay for the courses when you turn in a final grade. Others paid up front if it was for a significant sum. Then, if you didn’t complete the course, you had to pay back the money (payroll deduction was always an option to do that).

  3. I’ve heard Jerry has some kind of degree. Does anybody have the specifics on what kind of degree it is, where it’s from, when it was given, the accreditation status of the particular institution, etc?

    • According to the resume Jerry provided to JACC, he has an “AA Business Administration and Management” from KRS Business and Computer School. He also listed the Institute for Executive Director Leadership from the University of St. Thomas, a 9-month weekly course that JACC a funder paid $2,750 for beginning while Jerry was an interim executive director on an independent contractor basis.

  4. You didn’t even mention the way fees weren’t paid to the Secretary of State’s Office, and the JACC corporation was put into “inactive” status, and risked being dissolved.

    Plus, cutting off electricity to a house in WINTER could have resulted in tens of thousands of dollars worth of damage from burst pipes.

    • True. JACC’s charitable status was preserved by the annual filings with the Attorney General’s office (part of filing the 990 for most non-profits, but no one remembered to file the corporate registration renewal until the “new majority” took charge.

  5. Does Jerry Moore have any post high school education? Just wondering due to the great income he was receiving and not deserving.

    • It was one of the issues when he was hired as interim executive director. The first requirement listed in the job posting was a bachelor’s degree. When the issue was raised and people asked to see Jerry’s resume, the board’s executive committee said they saw no reason for Jerry to have to submit a resume for the job. Jerry had been vice chair of the board for the previous year. In fact, the initial proposal for Jerry’s salary as an independent contractor in the interim position was $45 an hour. When the board treasurer objected, that was dropped to $35 an hour for 30 hours a week. In looking at the financial reports for that period of time when he was an independent contractor, his biweekly pay varied between $2100 and $2800, so an average of about $2,450 for two weeks work at 30 hours per week. But it’s not that straightforward. A contract for his services wasn’t written and signed until three months into the six months. That contract seemed to indicate he was full time even though the board only approved 30 hours a week in its vote to accept him as interim ED.

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