March 16, 2011 04:11

Fight over funds spoiling between city of Greensboro and farmers market supporters

 

On one count volunteer supporters of the Greensboro Farmers Curb Market and city staff agree: Funds raised from pancake breakfasts should be spent on improvements to the market.

 

After that, much of the consensus erodes in a long-running controversy over management of the farmers market, with a dispute over funds raised by the nonprofit Friends of the GFCM potentially headed to court. During a March 3 meeting between the nonprofit’s treasurer and its former president, city staff and District 4 Councilwoman Mary Rakestraw, Assistant City Manager Denise Turner told the nonprofit representatives that she wants them to turn over $3,300 in their account to the city.

Turner said Monday that the city has made no official request for the nonprofit to turn over the money, but she is conferring with the city’s legal department on the matter.

Ginny Olson, the nonprofit’s new president, said the group is in the process of making a decision about how to respond to Turner’s request.

“When we decide what we’re going to do with the funds, it would be a restricted donation,” Olson said. “It would have to be used for market improvement. That’s why the funds were given to us, and that’s in the mission of our group.”

Mary Hess, the nonprofit’s treasurer, said, “They’re going to have to do it way over my head if any money’s going to be get turned over to the city.

“Part of the funds came from membership and donations,” she said. “I feel like the people who signed up to be members and donated money deserve better stewardship than us capitulating to the city.”

Friends of the GFCM is separate from another nonprofit, Greensboro Farmers’ Market Inc., which has submitted a proposal to manage and operate the farmers market. The latter organization is led by David B. Craft and Charles S. Brummit.

Alex Amoroso, the nonprofit’s former president, has resigned from his position, saying he disagreed with other members about how to respond to public accusations of mismanagement and feels that he can speak out more effectively without being officially tied to the group.

“I told the board that my recommendation would be that I would refuse to turn over the money to the point of making them take legal action,” said Amoroso, who is the owner of Cheesecakes by Alex, a downtown bakery. “For the city to step in and tell a nonprofit: ‘We’re going to seize your funds’ — you’re going to have to take me to court. There’s no precedent for the city doing that.”

Amoroso said he called the March 3 meeting to try to get public vindication for Friends of GFCM in the wake of a series of critical articles in The Rhinoceros Times written by its editor, John Hammer. Unofficial minutes obtained by YES! Weekly reference that “Rakestraw mentioned that it might sound harsh, ugly, etc. but this type of reporting comes with the territory and it would probably clear itself up. Suggested Alex sit down with John Hammer.” Earlier in the meeting, the minutes reference either Amoroso or Hess stating that Friends of the GFCM “had not received any requests from John Hammer and would be happy to provide documentation if requested.”

A final audit of Friends of the GFCM conducted by the city, which was released on March 10, noted that the organization relies on one person, the treasurer, to keep records and handle money, a practice at variance with “good internal controls.”

“Internal Audit noted that all expenses reviewed were incurred for appropriate purposes and it does not appear that fraud has occurred at the Friends of the GFCM as of this review,” the final report reads. “However, without proper segregation of duties or compensating controls in place, a window of opportunity for the misappropriation of assets exists.”

A draft report of the audit found that $323 spent by the Friends of the GFCM had not been documented. After meeting with Hess prior to finalization of the audit, the amount of unaccounted expenditures was reduced to $269, which equates to 3.8 percent of all expenses incurred.

Almost half of the expenses were incurred “as a direct result of operating the special event breakfasts at the Farmers’ Curb Market, including goods, supplies, table rent and liability insurance,” the audit found. The nonprofit paid a consultant $2,000 to prepare a proposal in response to the city’s announced plans to privatize the market. The city audit reports that “the Friends of GFCM sought donations of $2,000 specifically for the RFP, outside of operating the special events breakfasts at the farmers’ curb market.”

The audit notes that the Friends of the GFCM, which was incorporated last year, has yet to spend any money on improvements to the market and the nonprofit has been asked by the city “to put on hold all spending pending the conclusion of the review.”

“Some plans for improvement under discussion between the parks and recreation department and Friends of the GFCM prior to the review included making improvements to the exterior market signage and vendor tables, as well as creating an outdoor seating area for customers of the farmers’ curb market to enjoy.”

“I never saw the money as the nonprofit’s money,” Turner said, explaining her reason for seeking control of the funds on behalf of the city. She added that the money would be spent on improvements to the market.

Amoroso said the reason the Friends of the GFCM incorporated as a nonprofit in the first place is because when proceeds from fundraising events were turned over to the city, no one could tell them how much money was in the account.

“That’s the reason I’m so hesitant to allow them to take possession of it in the first place,” Amoroso said. “[Should the city seize the funds] it’s going to go into a general parks and recreation fund. They’re going to say it’s earmarked for the farmers market, but there’s no guarantee.”

The contract, which was finalized last September, makes the Friends of GFCM responsible for providing supplies for food plates sold at the market, for coordinating event planning and for receiving and taking responsibility for payment of money for the food plates, among other duties. In turn, the contract binds the city to assist the Friends of the GFCM in promotional efforts such as public service announcements and Cablevision channel ads. The contract allows either party to terminate the contract with 60 days written notice.

Turner said City Manager Rashad Young directed staff to end the contract in January, and that the fundraising breakfasts are no longer taking place.

“Our bylaws specifically state that if our group was dissolved then we would choose a charity to give the funds to,” Amoroso said.

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