Despite hearing that it could be financially troubled, Mecklenburg County commissioners on Wednesday gave $75,000 to a nonprofit linked to Charlotte’s oldest black Baptist church.
For six months, the county withheld grant money from First Baptist Church-West’s community services association because it failed to provide an audited financial statement. The association, which depends on grant reimbursements to cover its expenses, provides youths with summer, after-school and gang-prevention programs.
The nonprofit’s latest audit shows that, as of June 30, 2014, it operated on a $37,000 deficit and nearly maxed out on two lines of credit. Michael Bryant, county budget director, said staff advised County Manager Dena Diorio to keep the grant money in reserve because the nonprofit did not seem financially stable.
But Diorio lobbied for the money to be released because the nonprofit provided an audit last month. The grant dollars, she said, will reimburse the nonprofit for money it spent only on its summer camp – not any other programs or operating expenses.
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The association’s delay in readying an audit wasn’t the result of “financial malfeasance” but because auditors expressed concerns about the nonprofit’s survival, said executive director Patsy Burkins.
Burkins said the group’s finances improved when leaders cut staff and hired an accountant to help get finances in order. Last year, the nonprofit took in $875,000, and it expects to generate $1 million in income this year, she said.
Commissioner Bill James, who cast the only dissenting vote, grilled Burkins and the Rev. Ricky Woods, First Baptist’s pastor, about credit lines with exorbitant interest rates and finances he considered “shaky.”
“My bottom line is that I don’t like to see financial statements that have negative cash flows or deficits because then it makes it appear – whether it’s true or not – that we’re financing a deficit,” James said.
But the nonprofit’s leaders stressed they were only requesting reimbursement for money already spent. “The total cost of the program is in excess of $100,000,” Woods said. “Our request is only for $75,000. The county is not footing the entire bill for the program, only a portion.”
“What I don’t want to leave is an impression that … what we are doing is somehow complicit with something untoward,” said board Chairman Trevor Fuller. “That is not the case at all. You do great work.”
Jonathan McFadden: 704-358-6045, @JmcfaddenObsGov