Rose Martin, former executive director of the Bessie Smith Cultural Center.ABOUT THE BESSIE SMITH CULTURAL CENTERThe Bessie Smith Cultural Center -- comprising an African-American museum and an event hall -- was founded in 1983 as the Chattanooga African American Museum. More than 10 years later, the center moved to its current location on Martin Luther King Boulevard at a performance hall where banquets, community events and performances were held. The late Vilma Fields led the museum for 20 years before she retired in 2007 and was replaced by the current Executive Director Rose Martin. The center's mission is to "become the premier interdisciplinary cultural center that promotes cultural, educational, and artistic excellence and fosters research and education of African and African American heritage."BESSIE SMITH BOARD OF DIRECTORSJeffery Wilson, board chairmanMary Beth Sutton, vice chairmanVanessa Jackson, secretaryMichael Jones, treasurer (recently resigned)Carmen Ware, parliamentarianJoey BirdRoger Brown, Ph.D. Ed.Rich HeinsmanDionne JenningsStacy LightfootKimberly Mumford-WillisAlvin PartridgeS. Daniel Thomas IIINick WilkinsonIrvin Overton, immediate past chairmanSource: Bessie Smith website
In light of a scathing audit released last week, the Bessie Smith Cultural Center's governing board will ask Executive Director Rose Martin to resign in the coming days, sources with knowledge of the situation said.
Martin, who has been the head of the center popularly known as "the Bessie" for seven years, was in charge of this year's Bessie Smith Strut when tens of thousands of dollars in uncounted cash from the event was stolen from an office desk overnight.
On Friday, members of the Chattanooga City Council were split on how to react to the audit findings. Councilman Moses Freeman said if the board doesn't take serious, prompt action, the City Council should consider whether to ask its own auditor to examine the organization's entire operation.
"I want to give the board a chance to do their due diligence and take all appropriate actions necessary," Freeman said. "If not, there is a strong probability that there will be a complete audit where all the records will be examined."
But Councilman Yusuf Hakeem, who is waiting to be confirmed on the Bessie Smith board after asking to join, said he believes the city should not interfere and should let the board make the necessary changes.
In the past five years, the Chattanooga City Council has directed more than $285,000 in taxpayer funds to the center. But the independent audit by Henderson Hutcherson & McCullough castigated Bessie Smith Center management for failing to impose controls assuring funds were properly accounted for during its largest annual event. And the cultural center's board of directors, whose responsibility is to set policies and direction for management, failed to see the lack of accountability revealed in the financial audit.
An expert on nonprofit management argued that at the end of the day, the blame rests with the board of directors.
Every nonprofit has to operate like a good business to keep the public's trust, said Lewis Lavine, president of the Nashville-based Center for Nonprofit Management.
"The responsibility rests with the board. The CEO's job is to manage the responsibility but it's the board's responsibility to look over its fiduciary interest and run the agency in a businesslike manner," Lavine said.
Board Chairman Jeffery Wilson and Martin did not return calls seeking comment Friday.
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In the end, it took a thief to expose the problems at the Bessie Smith Cultural Center.
The audit released Thursday revealed that Bessie Smith officials didn't keep track of how many wristbands were sold or how much cash was collected during this year's Bessie Smith Strut, a popular blues-and-barbecue street party during the nine-day Riverbend Festival.
And after the Strut ended on June 9, the cash was left in a locked office drawer, uncounted, with the key stored in an open safe that wasn't locked. Center employee Torrey Hines admitted he went into the office, vandalized the building with racial graffiti to misdirect investigators and stole about $42,000 in cash. But the audit couldn't confirm how much money was actually stolen, saying that the center's employees failed to document wristband and beer sales and cash-handling procedures.
On Thursday, Wilson promised that the board would make sweeping changes to how the center operates the Strut. But he couldn't explain how the board, whose Finance Committee is tasked with reviewing the organization's money management, overlooked the lack of controls.
The cultural center took over the Bessie Smith Strut in 2012 after the city pushed to move the event to the main festival site at Ross's Landing, citing safety concerns.
After some black leaders denounced the move as racist and one black leader said they were "handed a plan" and were kept out of discussions, the Friends of the Festival declined to hold the event. The cultural center announced it would host the Strut at its traditional spot on Martin Luther King Boulevard.
Black leaders had little to say after the audit was unveiled Thursday. Only a few board members and one member of a special blue ribbon panel were at Thursday's news conference.
And though several community leaders, including state Rep. JoAnne Favors, Freeman and County Commissioner Warren Mackey, met privately on Sunday with Wilson, none would provide details of the discussion.
Freeman and Mackey said Thursday that the meeting was only to discuss how the board would address the audit. Favors didn't return multiple calls seeking comment.
City officials in the past have stepped in to investigate nonprofits receiving city funding.
In 2011, when the now defunct Multicultural Chamber of Commerce submitted paperwork to the city and county showing it would spend more than $350,000 in the coming year just to pay two employees, officials asked the city auditor to step in.
Then in 2013, Mayor Andy Berke's office asked the city auditor to scrutinize the McKamey Animal Center, citing controversy over how the then-executive director received a $10,000 bonus.
But Brent Goldberg, the mayor's chief operating officer, said he sees no need for that kind of scrutiny in this case.
Earlier this year, when the mayor's office reviewed nonprofits' requests for taxpayer funds, Goldberg said officials wouldn't consider organizations that didn't submit an unqualified audit. Bessie Smith management has submitted an audit each year with its finances and request for funds.
Those financial reports show that the center has been losing money for at least three years, since Hamilton County pulled its $64,000 in funding in 2011, state funding slumped and membership began to shrink. The center reported losses of $16,481 in 2012 and $38,400 in 2013, and projects a $24,663 loss in this fiscal year.
Freeman explained that after Martin was hired in 2007, the board shifted its main focus from fundraising events to implementing educational programs at the center. But he said many of those programs have relied on the center's reserves for funding.
Friends of the Festival Executive Director Chip Baker said his staff has offered to help manage the Strut for the center, but center officials have previously chosen to handle the financial operations of the event on their own.
"But we're very, very willing to help," Baker said. "We strongly believe in the Strut and the value it has to our community. If their board asks us to get involved, we will gladly look into it."
Contact staff writer Joy Lukachick Smith at jlukachick@timesfreepress.com or 423-757-6659.