published Wednesday, July 13th, 2011

Chattanooga auditor: Multicultural Chamber in financial straits


by Cliff Hightower
 John Taylor and former City Council Chairman Yusuf Hakeem speak regarding the defunding of the Multicultural Chamber of Commerce by the Chattanooga City Council during a meeting Tuesday evening in Chattanooga, Tenn.  The council ultimately decided to cut funding of the agency.
John Taylor and former City Council Chairman Yusuf Hakeem speak regarding the defunding of the Multicultural Chamber of Commerce by the Chattanooga City Council during a meeting Tuesday evening in Chattanooga, Tenn. The council ultimately decided to cut funding of the agency.
Photo by Jenna Walker.
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REVIEW FINDINGS

A review by the city’s internal audit department raises 18 questions about the management and financial oversight of the Tennessee Multicultural Chamber of Commerce. Some of the issues detailed in the report include:

* The Tennessee Multicultural Chamber of Commerce received more than $500,000 in federal funds never used;

* The organization’s travel expenses totaled in excess of $13,000 per employee, more than other similar non-profit organizations;

* The salary and compensation of Executive Director Sherrie Gilchrest exceeds other similar non-profits;

* The chamber appears to be in significant debt;

* The chamber purchased two properties for almost $580,000, yet the value of the properties is about $211,000.

Source: City of Chattanooga

The Tennessee Multicultural Chamber of Commerce has been operating in the red for years and has made questionable financial decisions, including receiving federal money without completing the project the funding was slated for, a city review states.

City Auditor Stan Sewell wrote the Chamber’s “management and board have made extravagant expenditures and obligated the organization to excessive liabilities at a time when liquid assets were virtually nonexistent and operating losses were consistently incurred.

“Even with continued funding from the County and City, the organization’s ability to continue as a going concern should be questioned.”

But a Chamber board member and former city councilman questioned the 21-page review to Mayor Ron Littlefield on Tuesday night, saying Sewell never talked to the executive director of the organization, Sherrie Gilchrest, or to board members.

“It was a document taken without her opinion,” said John Taylor. “She can answer every question.”

City and county officials cut budget allocations to the Tennessee Multicultural Chamber of Commerce this year after questions emerged in a Chattanooga Times Free Press investigation about financial data the organization provided to both governmental bodies, as well as on federal tax forms.

The review of records found contradictory data reported on different forms over a period of years.

Board members appeared before the City Council on Tuesday night to ask for the $75,000 annual allocation to be reinstated.

Council members said they would review the city auditor’s report and asked that Chamber officials come back next Tuesday with answers to 18 questions detailed in the review and a copy of the latest Chamber audit.

Board members on Tuesday pleaded with the council to restore funding, saying the organization helps minority business owners in the community get a leg up to compete against larger, more established businesses.

“This Chamber, sad to say, is recognized more outside of the city of Chattanooga than it is here,” said Gerald Mason, a former member of the organization’s charter committee.

Auditor findings

Internal audit of the Tennessee Multicultural Chamber of Commerce
Internal audit of the Tennessee Multicultural Chamber of Commerce

The auditor’s review, released just before the council’s regularly scheduled business meeting, includes a laundry list of questionable financial and business dealings and concerns over use of federal money.

Gilchrest received a salary from $134,000 to $146,000 annually over a three-year period, the review states. Sewell compared the salaries to two other nonprofit organizations — Big Brothers, Big Sisters and the Partnership for Families, Children and Adults Inc. — and found her salary is more than double the directors of both organizations.

His review also found that the Chamber’s travel expenses totaled almost $27,000 per year, or about $13,000 per employee. Big Brothers, Big Sisters, which has about the same budget as the Chamber, has a $8,100 travel budget or about $630 per employee.

The review also found that the Chamber had gone into debt considerably and appeared it funded its operations by increasing its credit line over a period of four years.

“It appears these consecutive and persistent losses from operations were funded by increases in debt,” Sewell wrote.

The review also found the Chamber purchased two pieces of land for almost $580,000, but the value of both parcels totaled about $211,000. In one instance, the Chamber bought a parcel valued at $46,600 for $250,000, property assessor records show.

The organization also received $545,000 in grant money from the U.S. Department of Housing and Urban Development for a Business Solutions Center in the 2005-06 fiscal year. The review states $306,400 was spent on the $4.4 million project. About $200,000 was spent on land acquisition, while another $106,400 was spent on planning, administration and project management.

The Chamber received another $238,000 but it is unclear what the money has been spent on.

“A physical inspection of the land shows no signs of project activity,” Sewell wrote. “There were no expenditures on the project during the fiscal years ending June 30, 2008 or 2009.”

Reaction

WHAT ELSE HAPPENED

The City Council voted 7-2 Tuesday night to approve a budget with appropriations of $19.3 million to agencies once funded jointly through the now-defunct sales-tax agreement with Hamilton County. Councilman Russell Gilbert and Councilwoman Deborah Scott voted “no.” The amendment to the current year’s budget went through first reading; a second reading is scheduled for next Tuesday.

Gilchrest did not attend the council meeting.

Taylor said afterward the Chamber’s board of directors also will go to the Hamilton County Commission on Thursday to ask for restoration of funding.

He said the Chamber would not comment on the auditor’s review until it meets with the council and commission to give them answers to the questions raised by Sewell.

Councilman Jack Benson said he would not support funding the agency until he gets some answers.

“Until the questions produced in this document are answered, we would not be good stewards of the taxpayers’ money,” Benson said. “You’ve got some real problems.”

Taylor said the Chamber would respond fully.

“I will assure you every question will be answered,” he said.

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harrystatel said...

Appears that Sherrie "Are You Sure My Last Name Isn't Crutchfield?" Gilchrist and Ron "Slip and Slide" Littlefield both enjoy nefarious real estate deals paid for with taxpayer money.

July 13, 2011 at 5:33 a.m.
sandyonsignal said...

When will we question the big Chattanooga Chamber of Commerce? For being a bunch of Milton Friedman, government bashing wingnuts, they are the biggest Welfare Queens around. The city subsidizes them over a million bucks. Like we have that kind of money. Let's go through their stuff.

What's that you say? They just got another $500 k from the city last night. Oh, the irony escapes them.

July 13, 2011 at 7:29 a.m.
rosebud said...

The TFP is picking on the Multicultural Chamber! This is racism in its most blatant form! Yeah! That's what it is. The man is kickin' em to the curb! Outrageous! (I was just surprised someone hadn't written this yet, so I thought I'd fill the void)

July 13, 2011 at 8:11 a.m.
harrystatel said...

The Chamber of Commerce is not a "free market" enterprise. It's another government-corporate subsidized Mafia-type group seeking government protection to prevent free markets.

Cut ALL taxpayer funds to any Chamber. Special interests protecting their own special interests.

July 13, 2011 at 8:17 a.m.
sandyonsignal said...

Agree with you to a certain extent, Harry. Cut all taxpayer funds. I still think they are free market hypocrites, but you said it better: "government-corporate subsidized Mafia-type group seeking government protection to prevent free markets."

July 13, 2011 at 8:50 a.m.
adolphochs said...

The Chamber of Commerce has a demonstrable record of bringing business to this community, associated jobs and tax producing economic activity. I doubt if Sandyonsignal could actually read anything Friedman wrote as there are quite a lot of multisyllabic words used. The "separate but equal" Tennessee Multicultural Chamber of Commerce has a record of overpaying Gilchrist and providing some nice vacations to her and her board. I smell a federal investigation of fraud and the inevitable cries of racism.

July 13, 2011 at 9:03 a.m.
sandyonsignal said...

The Chamber fights to keep government out of business, except for grabbing taxpayer's money to enrich their own pockets. Hardly, a good thing, in fact they are the ultimate Welfare Queens.

July 13, 2011 at 9:18 a.m.
harrystatel said...

Robbing taxpayers to give money to the MultiCultural Chamber is bad.

Robbing taxpayers to give money to the Chattanooga Chamber of Commerce is good.

Nice concept if you're the "good-guy" thieves.

July 13, 2011 at 9:20 a.m.
thedeltajew said...

thats alot of money for land and im sure the land owner wasnt the only one to profit from that sale cause someone on that chamber got some of that money back!!!its just another way to rip off money.i think the goverment should investigate and have a talk with everyone at the chamber and the land owner.harrystate above me the chattanooga chamber hasnt got the audit that the multicultural chamber has and im sure this will be like operation rockytop were alot of heads rolled!!!i was here then,and i was here in 2006 when billy long's head rolled to and i will be here threw this also.sandyonsignal and harrystate you need to read adolphochs post above.

July 13, 2011 at 10:08 a.m.
midnitewatchman said...

It is said a picture is worth a thousand words. If you dont think politicians prey on segements of society for their gain then you have been decieved!

July 13, 2011 at 10:16 a.m.
thedeltajew said...

to payingattention:you can stand alongside john taylor,yusuf hakeem and sherrie gilchrest (if she shows up)at the next meeting and listen to them "answer every question"but i cannot gaureentee you that the council will like the answers they get.to tell you the truth they are probably contacting their lawyers about now,cause somebodys got some money thats not theirs and their going down for it.crying about the county chamber only distracts from these guys and does not excuse their actions.two wrongs if indeed there are two wrongs doesnt equal a right!!!

July 13, 2011 at 12:41 p.m.

I do love the photo of King Ronnie in the background, out of focus, as usual.

July 13, 2011 at 12:51 p.m.
mymy said...

Another Politically Correct waste of taxpayer funds. Let them win or loose on their own. There is no need for 2 chambers. Also stop the hugh amt. to the Chattanooga Chamber. What a lot of............fill in the blank.

July 13, 2011 at 1:16 p.m.
thedeltajew said...

payingattention,like i said two wrongs do not make a right!this is not about the county chamber or anybody else,so giving me examples of what you think is corruption by other officials in hamilton county does nothing to "right" anything the multiculture chambers done wrong. save your rants for the county commmision when they are audited and found to be wasting money.

July 13, 2011 at 1:31 p.m.
chet123 said...

StrongTHIS IS A DISGRACE.....HOW DO THEY HELP THE COMMUNITY....SHERRIE GILCHRIST SALARY IS WHAT?

TO THE POSTERS...DO RESEARCH ON NEW UNITED COMMUNITY CHURCH ON TUNNEL BLVD.....AND SEE HOW THE CHURCH MEMBERS WAS SWINDLE 100,000'S OF DOLLARS MAYBE AS MUCH AS A MILLION DOLLARS...BY A CROOKED PEACHER...AND SEE WHO HIS TREASURER WAS(SHERRIE GILCHRIST)...SOMEONE WHO WOULD STEAL IN GOD HOUSE NEED NOT BE A PUBLIC SETWART WITH TAX PAYER MONEY....SOMEONE SHOULD GO TO JAIL....

DONT BELEIVE ME....DO RESEARCH ON A LITTLE SMALL CHURCH...TAKEN FOR EVERYTHING.....NEW UNITED COMMUNITY CHURCH...PASTOR NAME WAS HOLLOWAY...HE AND SHERRIE GILCHRIST** COMPIREED TOGETHER...TOKE THOSE POOR PEOPLE FOR EVERYTHING...

SHAME ON THE MULTI-CULTURAL CHAMBER OF COMMERCE...SHAME SHAME SHAME!

July 14, 2011 at 1:31 p.m.
chet123 said...

ROSEBUD...YOU AND I FINALLY AGREE ON THE SAME THING....

July 14, 2011 at 1:45 p.m.
eastridge8 said...

yeah chet...you got it right ...this time...I agree...

On another post I asked..."why do we (taxpayers) always seem to get "stuck" with thieves when it comes to taxpayer/government handouts? I wonder..."...no one answered so can someone on here asnwer that? Why DO we always get stuck with these thieves and then watch them "retire" with NO questions answered or punishment in sight?

July 14, 2011 at 4:06 p.m.
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