City forced to ask again for insights into ICRCM financial structure

Administrators of the International Civil Rights Center and Museum fared so poorly today in answering questions posed by Greensboro City Council that the city manager was forced to send a second letter seeking clarification on 10 of 15 financial issues.

Deena Hayes-Greene, chair of the ICRCM board and a member of the Guilford County School Board, answered City Manager Jim Westmoreland’s first letter as required by today’s deadline. At times dismissive, the letter often offers one word answers to requests for detailed insights, or uses non-specific accounting language.

At one point the letter directs city council, which has agreed to loan the ICRCM $1.5 million to sustain operating costs, to explore the US Tax Code for clarity on the museum’s financial operations.

View the ICRCM response here.

View the city’s follow up letter here.

One of the most questioned aspects of the museum’s corporate structure is whether any of its principals are profiting from the museum. They city’s original question number eight asked if development fees were paid to the Museum landlord in 2009 or 2011. The ICRCM response is no, but tracks beyond the scope of the original question to explain that development fees, often lucrative in projects involving historic tax credits, were paid to the original owner of the building, Sit In Movement LLC. “In this instance, however, all development fees paid to Sit In Movement Inc., were put right back into the museum for construction, etc.”

The city asserts in its follow up letter that $4.5 million in development fees “were capitalized as part of the building.”

In the city’s original letter, question number one asks for an explanation of the roles and functions of the various LLCs set up and how cash flows between the various entities. The city asked for a flow chart outlining the relationships. ICRCM responds that the set up was created by “highly specialized accountants and attorneys” and that the city attorney had already reviewed many of their financial documents. The city follow up letter again requests a flow chart (and provides an example) that “outlines the relationship of the multiple LLCs … along with how the monies are transferred between the LLCs.”

The city had originally asked for letters from financial institutions detailing the current status of the tax credits. The ICRCM response was to assert that they are “in complete compliance with all tax credit issues” and to invite the city accountant to verify payments. Today’s city follow up again requests a bank letter and goes on to note that “Internal audit reviewed all provided documentation, which did not include these letters.”

Finally of note is that the city had requested an account summary showing any disbursements of the restricted portion of the city’s initial $750,000 loan to the ICRCM. The museum response was that it had included an “accounting sheet” to the city three weeks ago and that $172,674 remains. The city again today requested a list of all disbursements made using city funds. The city asked that the listing include “payee, amounts, check numbers and dates.”

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