Councilors ask chamber director about audit
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The director of the Roswell Chamber of Commerce said the organization was moving forward during a presentation on the three-year audit of its finances at the Roswell City Council meeting on Thursday, but some of the councilors asked her about the transparency of the chamber during the process.
The audits were performed by Kubiak Melton & Associates, Albuquerque. City manager Joe Neeb said the total cost to the city was around $ 42,000.
The review of the chamber’s financial reports for fiscal years 2018, 2019 and 2020 was requested by the city and accepted by the chamber after the chamber board abruptly decided in March 2020 to terminate its maintenance contract doing business with the city.
Under the three-year contract, which began in July 2018, the city allocated $ 76,600 in 2018 and 2019 and $ 38,350 before the contract was terminated in fiscal 2020, according to the audit.
Chaves County also has a similar deal with the chamber, to which it has allocated $ 57,500 per year, paid monthly to $ 4,792 over those three years.
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Andrea Moore, executive director of the chamber, acknowledged in her presentation that audits for the 2019 and 2020 fiscal years showed that the chamber suffered financial losses which raised doubts about the ability of the organization to continue its activity.
“There was going concern, which means there is uncertainty about the ability of the chamber to meet its debt obligations,” Moore said.
The 2020 audit shows that as of June 30, 2020, the chamber had a total liability of $ 171,324 which included $ 4,183 in overdraft cash, a balance of $ 29,623 on a line of credit of $ 30,000 and a balance of $ 14,552 on a promissory note of $ 23,400 executed in 2018. It ended the year with a negative net asset balance of $ 44,388.
At the end of fiscal 2019, the chamber had total liabilities of $ 184,457, including a balance of $ 26,100 on the line of credit and a balance of $ 17,809 on the promissory note. He ended this fiscal year with a net loss of $ 9,473.
Moore served on the board for two years before becoming its chairman in July 2020, then became interim executive director in August 2020 following the resignation of Candace Purcella. Moore was appointed executive director in January. Moore said last summer that the chamber began implementing new practices and policies.
“Prior to the audit, it was agreed that the auditors had little reason to review our accounting practices, rules and policies, as the chamber had none,” she said. “As of July 2020, we have implemented almost entirely new practices, rules and policies within the office. “
Moore said the chamber has met with listeners about the changes that have been made.
The 2020 audit notes that chamber leadership planned to fund operating costs with existing cash, COVID-19 relief funds and by collecting 60% to 70% of unpaid and overdue membership fees.
“After speaking with our auditors about the changes that have been made within the chamber of commerce, they are confident that the chamber will move out of going concern in our future audits,” she said.
Moore said these measures are expected to make the chamber viable by fiscal 2023.
She said the chamber is moving forward in its mission to promote economic and social prosperity and help with business development, tourism and community pride.
“We don’t look in the rearview mirror anymore, we only look through the windshield.” She noted that the chamber had launched a magazine and was rebuilding its relationships with businesses and the community.
While some councilors have said they would like to see the City and the Chamber rebuild their relationship, others asked Moore about what they said was a lack of transparency in the process.
Councilor Margaret Kennard asked about the lack of opinions offered by the auditors in each year’s report. Kennard worked for the chamber for several months from fall 2019 to January 2020. She was one of four staff to resign that month. She revealed her connection to the bedroom before making her comments on Thursday.
Generally, an audit will provide an opinion on whether or not the organization conforms to accepted accounting principles and whether the audit fairly represents the financial accounts of the organization. An unqualified opinion is the highest opinion offered. A qualified opinion is obtained when there are a few matters of concern and an unfavorable opinion means that there are serious problems.
An auditor may also issue an opinion disclaimer – i.e. no opinion – for reasons such as lack of records, as was the case every year of the audit of bedroom.
Following the departure of the employees, Kennard said, Neeb requested an audit on February 24, 2020. A little over two weeks later, the board of directors decided to terminate the contract with the city.
“I was hoping that this audit would allow the city and the chamber to work on fixing the relationship, but I didn’t really trust the transparency of the audit process,” said Kennard, who attended. the meeting virtually. .
Kennard said she didn’t understand how detailed records couldn’t be available when the chamber hired an outside accountant to manage the funds. She said she was also disappointed that the audit did not mention how cooperative staff were in the process, which she said the city’s annual audit provides, as well as a representative auditor was not available to discuss the audit.
“The reason I think this is a big deal is because we have other non-profit contracts and we have to make sure that taxpayer dollars are protected,” she said. declared.
Councilor Jeanine Best criticized Moore and other council members for not being aware of the state of the chamber’s finances. She noted that payroll taxes had not been paid for two years. Moore said that since taking office in August, all unpaid taxes have been paid.
“I understand there is trust, but you still have to watch your back and you and the rest of the board have not watched the backs of the citizens of Roswell and the citizens of Chaves County,” she declared.
Best said the room has been “blessed” by COVID-19 relief funds. The 2020 audit notes that in August 2020, the chamber received a loan of $ 73,253 from the Small Business Recovery Act through the New Mexico Finance Authority and a loan of $ 37,600 from the Paycheck Protection Program through of the US Small Business Administration. The latter can be forgiven if the room meets certain criteria.
“If you ever come back to town and ask for money, I think we need to know your checks and balances. We need to know who your accountant is. We need an audit every year, not every three years, ”said Best.
Councilor Juan Oropesa said that while he was initially opposed to the city paying for the audit, he agreed it was time for the chamber and the city to move forward.
“I think the city, the city council in particular, should also recognize the fact that the citizens have been injured, have been damaged. The majority of the board is the one that voted for the audit to take place, ”he said.
“It’s time to move on and I’m confident with what you’ve already said, that you’re ready to turn around and move on and hopefully make it a better room,” said he declared.
Councilors Angela Moore and Jacob Roebuck asked Neeb if he was convinced the city did not need to take further action regarding the audit and if he was comfortable reestablishing a relationship with the ‘organization. He answered yes to both.
Neeb said the purpose of a chamber is to help businesses speak with one voice and that a strong business community is important to the city.
“If the business community is strong, we have the economy that drives our community forward. We have already discussed the potential of working together on projects or what that relationship will look like, ”he said, adding that the city and the chamber would ensure that assurances were in place.
“I think it was a series of unfortunate incidents that brought us to this. I sincerely believe that the Roswell Chamber is doing very well in order to remain that important part of the business community that we need. I have no qualms about working with them, ”he said.
City / RISD reporter Juno Ogle can be reached at 575-622-7710, ext. 205, or firstname.lastname@example.org.