Questions about RBHSEF

Quick replies to the Riverside Brookfield Landmark article:

9/4/2012 10:00:00 PM Email this articlePrint this article
Riverside-Brookfield High School charitable group under fire for shoddy records Tax returns ‘trying to obscure rather than illuminate’

http://www.rblandmark.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=9343&TM=39005.2

For one, I thank Bob Skolnik and Bob Uphues for this coverage.  The transparency, and thus integrity, of a foundation started with our tax dollars is at issue.  I appreciate their spending time and effort to bring the story to the community.

1. In April, the RBHSEF president said on video to the board of education that the foundation has nothing to hide, all inquiries will be answered.  I have made my inquiry and we shall see how it is answered.

2.  The RBHSEF check register should be on-line.  Why isn’t it?  What does RBHSEF have to hide?

3.  RBHSEF appears to think ‘990s are enough, no more disclosure is necessary.’  When 990s are pristine, and show dedication to disclosure and compliance, i agree.  RBHSEF’s, for the reasons i point out below, are not pristine and show ongoing determination not to disclose.   How else does one explain:  “No Documents Available To The Public”, a classic RBHSEF reply to transparency and disclosure questions from the Internal Revenue Service?

4. I am surprised to see RBHSEF acting as though this is a one-off conversation with an upset community member.

5. RBHSEF was on notice from the board and the interim superintendent two years ago that compliance, disclosure and transparency were coming up.  It resolved, as far as its documents to date show, none of its issues.  Next, the board noticed up the new standards.  Apart from promising openness, no action was taken to cure these errors.  I then came along and said, ‘you have eight years of incorrect filings and non-disclosure.’  Their statement so far has been: ‘Wait.’

If you are a community member, your tax dollars were used in 1987 to set this foundation up.  It not only owes compliance to the State and the Feds, but to each one of us.  My note below goes into specifics.  It was first posted on Monday, Aug. 27.  thank you for your interest.

August 27 note starts here:

In the 2011-2012 year, RBHS Education Foundation, founded with $8,000 appropriated by the RB board from the taxpayers of D208 in April 1987, gave $16,760 to RB students and staff to recognize achievement or further education through some 24 awards and grants. This from a filing with the district last week.

In 2010-2011, there were 25 awardees and grant recipients, receiving some $20,735. For 2009-2010, the figures were 20 and $10,725. And in 2008 – 2009, there were 51 recipients, again including both awardees and grantees. The total awarded $28,939.41.

The top fundraiser for RBHSEF is the annual RBEF Telethon. According to documents filed with the district, RBHSEF made $16,867.23 on the 2011 Telethon. The 2010-2011 Telethon brought in $20,911.79. The year before Telethon receipts were $6,329.03. Back in 2008-2009, the Telethon brought in a whopping $26,445.

Several folks should be recognized and thanked: Start with the donors — the foundation has recruited donors big (+/-$50,000) to small — folks who call in at Telethon time.  And don’t forget the volunteer RBHSEF board, the officers, the volunteers who make the Telethon a success, and some staffers at RB who help the foundation along.

Last week I appeared at the RBHSEF board meeting and asked to view their check register.  I did so because RBHSEF invited scrutiny when presenting to the RB Board, and because of an eight year record of — at the very least — inaccurate and — at worst — deceptive official filings.  I refer to the RBHSEF IRS 990s.

Here are some specifics:

I have seven tax returns for the last eight years (missing july 2006 to june 2007*).  Here is a taste:

Every year RBHSEF filed officially as a 501(c)(4).  Yet it describes itself as 501(c)(3), and has a recent letter from the IRS saying it is a “3”, not a “4.”

It is not an idle difference.  RBHSEF has always said contributions are tax-deductible.  But that is not true for the category in which it filed.  Contributions to actual 501(c)(3)s are presumed deductible.  But the opposite is true for the category in which RBHSEF filed.

RBHSEF leadership, which serves for life according to its by-laws, has said repeatedly that this “mistake,” which was made at least from 2003 to 2011, was inadvertent.  [It also blames the accountant, which i find tacky, because it selected the accountant.]

But, that endlessly repeated excuse overlooks the care with which each return ignores clusters of questions for 501(c)(3)s, and answers the complex questions directed specifically at 501(c)(4)s.  Doing so takes thought, because the 501(c)(4) questions are challenging — and they lead to other questions.

So, even if foundation leadership’s excuse were true for one year, and one mistaken return was inadvertent, the year-in / year-out replies only to “4” questions indicate a fairly developed sense that RBHSEF thinks — or thought — of itself from 2003 to 2011 — as a 501(c)(4).

Which brings up the RBHSEF management question.  If indeed there was a mistake way back when, why was it not caught?  Who read the IRS Form 990s?  The treasurer, an attorney, did.  He signed them.  Would an attorney repeatedly sign something he knew to be untrue?

I think the opposite.  Attorneys are regulated by the Attorney Registration and Disciplinary Commission.  Every attorney I know is careful that what s/he signs is accurate.  The attorney said RBHSEF is a 501(c)(4).  To me, that means he thinks the forms accurately depict the behavior of RBHSEF.  But that gets to the conundrum:  501(c)(4)s are empowered to do things not allowed to 501(c)(3)s.

And it points to a performance issue at the top of RBHSEF.  Folks who run not-for-profits are accountable.  The head of RBHSEF has been in office for the entire period represented by the IRS Form 990s I reviewed.  Somewhere, the person at the top has to take responsibility — for the good, and the bad.  So far, no one has taken responsibility for these forms, which are either blatantly and repeatedly wrong, or right and thus indicative of behavior that cannot be reconciled with RBHSEF’s status.

So, what are the problems?

In every return, RBHSEF refuses to disclose its officers — except the treasurer, the attorney who signed the official filings.  Disclosing officers is an IRS Form 990 requirement.

In every return, RBHSEF refused to disclose its directors.  Doing so is an IRS Form 990 requirement.

In every return in which the question is asked, RBHSEF refused to answer the required governance question, ‘how many voting members on your board?’

RBHSEF goes on to ignore or to refuse to answer other governance questions, or flat-out declares “no” to “do you have” questions about policy safeguards, such as conflict of interest policies, whistleblower procedures, possession of books and records, etc.

In fact, when IRS asks RBHSEF to “attach an explanation of how the organization determines that recipients qualify to receive payments,” which goes to the heart of the grant- and award-making for which the RB board started RBHSEF in 1987, RBHSEF either ignores the question, or, in 2008, it replied, “See attached statement.”  According to the Illinois Attorney General’s website — no such statement was attached.

About substance, RBHSEF has refused to provide a grantee list in the IRS Form 990, as required, since 2004.

In fact, IRS Form 990 itself says, “[the 990] serve[s] as the primary or sole source of information about a particular organization.  How the public perceives an organization in such cases  may be determined by the information presented on its return.  Therefore, please make sure the return is complete and accurate and fully describes, in Part III, the organization’s programs and accomplishments.”  (The words change a bit every year, but it is the same message.  This quote is from the 2008 form.)

In each of the returns since 2004, RBHSEF then lists categories of activity (“Assistance for class trips and outings” or “Software gift to the RB high school”), but with no specifics, no accomplishments, no amounts, no numbers of awards, no awardees, no grantees, no breakdown of what money went to what program activity.  Nothing.  In doing so RBHSEF again leaves numerous IRS boxes empty and questions unanswered.

And in all of the returns, RBHSEF lists its actual program spending — the spending it was founded by the RB Board to make on our community’s behalf, the spending that helps our kids and RB staffers — the spending that depends on volunteers, a telethon and donors, under the IRS Form 990 “other program services (attach schedule)” line. This line is for ancillary (“other”) services related to programming.  It is an insult to the people of this community.

Based on the above, what do you think RBHSEF said on the attached schedule?  “Grant Awards $37,596.”  That’s it, nothing else.

RBHSEF refused to supply any of the specifics IRS names.  No number of grants, no awardees, no correlation to its other stated categories, no breakdown at all.  Nothing.

RBHSEF goes on to ignore other questions, such as ‘Have any of these figures been compiled by an independent accountant?’ and ‘Have any of these figures been audited?’  RBHSEF refuses to say.

RBHSEF’s most shocking reply, for its sheer brass, is a declaration that recently appeared in a series of questions about public disclosure and accountability.  Inevitably, RBHSEF says “No” or nothing at all on such questions.  But, in 2010, RBHSEF said its answer was in an attached statement.  With anticipation, I paged over, anxious to see what I could finally learn about RBHSEF.

The statement?  “No Documents Available To The Public.”

Any group that directs to a statement and then stiffs the IRS is acting like it has something to hide.  I cannot imagine what, given the foundation’s record, mentioned above.  That’s why after the president said at the April Board of Education meeting that RBHSEF records are open,  I called the treasurer and asked to see the check register.  He said I had to ask the Board, so last Wednesday I did so.

So far, no reply.

If you scroll up this thread, or visit chrisrobling.com, you will not be surprised to learn I see it all as of a piece with the Awful Years and the Parade of Horribles.  Precisely the same dodges and double talk we suffered in the Bad Old Days, with no accountability once mistakes were plain, are replayed in this story.

The practice of operating RBHSEF as a private enclave with zero accountability to anyone, including the Internal Revenue Service, is another Horrible in the lengthy (and unfortunately still growing, as items are discovered) Parade.

But, there is a new board, with new members, who have nothing to do with the bad old days.  The board must act for the foundation, not for the board members who made the mistakes, looked the other way, or simply fell asleep at the switch.

If RBHSEF acted as a 501(c)(3) during all of those years, then it should be easy to open its check register and let everyone see that, while it corrects the erroneous IRS Form 990s.

If RBHSEF’s actions were covered up, as suggested by the ongoing pattern that riddles its IRS Form 990s with evasions and non-answers, then it’s time to start a systematic correction of the record, and to discharge those who did not stay on the straight and narrow.

Just like the other RB disasters, this robs the rest of us of something — the community-based foundation we deserve — and which RB taxpayers paid to found in 1987.  The current foundation leadership, spluttering aside, has not kept its part of the bargain.   And the RB board, for its part, has even recently elevated the importance of disclosure and transparency.

There is still more i will not bore you with, but i hope this provides sufficient relief for my insistence that RBHSEF produce its check register to show what it did in all of these years of not reporting faithfully.

RBHSEF said it was one thing, but it filed like another.  It has admitted no IRS corrections.  In its April presentation to the RB Board of Education, it said on video, ‘we have nothing to hide, everything is available.’  That’s the right spirit, and it goes with the new treasurer and new board members.

I took them up on their offer, because disclosure is elemental in the regulated not-for-profit world.  To me, it’s no burden to follow the rules and tell the truth.  We’ll see what the new board at RBHSEF thinks.

Posted Monday Aug 27, 2012 23:58 #
*The 2006-2007 990 surfaced in the documents handed over to RB last week.  It fit all of the patterns noted above.  Notably, it referred the reader for an explanation of a $49,000 transaction to “Attachment 1”.  As usual, there was no “Attachment 1”.  I will post more on it — and the terrific grant awards RBHSEF disclosed in its document dump that it had failed to publicize originally, shortly.
Explore posts in the same categories: Education, Riverside Brookfield High School -- Turnaround

2 Comments on “Questions about RBHSEF”

  1. Jack MeOff Says:

    Your a little dick idiot. Mind your own business when it come to RB. What happen some teacher or administrator scorn your advances so now your gona act like an idiot…Or are you and Butterfinger in bed togeather…the 2 of you are sad individuals….leave the kids and school alone…..dickhead

  2. chrisrobling Says:

    Above is a fairly typical response of those who support a flawed status quo, but who also realize a personal benefit from doing so.


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