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Councilors question chamber director on audit

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Andrea Moore, executive director of the Roswell Chamber of Commerce, talks about the audit conducted on three years of chamber finances at Thursday’s meeting of the Roswell City Council. (Juno Ogle Photo)

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The director of the Roswell Chamber of Commerce said the organization was moving forward during a presentation on the audit of three years of its finances at Thursday’s Roswell City Council meeting, but some of the councilors questioned her on the chamber’s transparency during the process.

The audits were performed by Kubiak Melton & Associates, Albuquerque. City Manager Joe Neeb said the total cost to the city was about $42,000.

The examination of the chamber’s financial reports for fiscal years 2018, 2019 and 2020 were requested by the city and agreed upon by the chamber after the chamber’s board of directors abruptly decided in March 2020 to terminate its business retention contract with the city.

Under that three-year contract, which started in July 2018, the city allocated $76,600 in 2018 and 2019 and $38,350 before the contract was terminated in fiscal 2020, according to the audit.

Chaves County also has a similar agreement with the chamber, to which it allocated $57,500 annually, disbursed monthly at $4,792 during those three years.

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Andrea Moore, executive director of the chamber, did acknowledge in her presentation the audits of fiscal years 2019 and 2020 showed the chamber incurred financial losses that raised doubts about the organization’s ability to continue as a going concern.

“There was a going concern, which means that there is uncertainty of the chamber’s ability to meet its debt obligations,” Moore said.

The 2020 audit shows that as of June 30, 2020, the chamber had total liabilities of $171,324 that included $4,183 in overdrawn cash, a $29,623 balance on a $30,000 line of credit and a $14,552 balance on a $23,400 promissory note executed in 2018. It ended the fiscal year with a negative net asset balance of $44,388.

At the end of fiscal year 2019, the chamber had total liabilities of $184,457 including a $26,100 balance on the line of credit and a $17,809 balance on the promissory note. It ended that fiscal year with a net loss of $9,473.

Moore served on the board for two years prior to becoming its president in July 2020, then stepped in as interim executive director in August 2020 after the resignation of Candace Purcella. Moore was named executive director in January. Moore said last summer, the chamber began to implement new practices and policies.

“Before the audit, it was agreed upon that the auditors had little reason to review any of our accounting practices, rules, policies, as the chamber did not have any,” she said. “Since July 2020, we have implemented almost full brand-new practices, rules and policies within the office.”

Moore said the chamber met with the auditors about the changes that have been made.

The 2020 audit notes the chamber management planned to finance operating costs with existing cash, COVID-19 relief funds and by collecting 60% to 70% of outstanding and overdue membership fees.

“After speaking with our auditors about the changes that have been made within the chamber of commerce, they are confident that the chamber will be moving out of the going concern in our future audits,” she said.

Moore said those measures should make the chamber viable by fiscal 2023.

She said the chamber is moving forward in its mission to promote economic and social prosperity and to assist business development, tourism and community pride.

“We are no longer looking in the rearview mirror, we are only looking through the windshield.” She noted the chamber has started a magazine and is rebuilding its relationships with businesses and the community.

While some of the councilors said they would like to see the city and chamber rebuild its relationship, others questioned Moore about what they said was a lack of transparency in the process.

Councilor Margaret Kennard asked about the lack of opinions offered by the auditors in each year’s report. Kennard worked for the chamber for several months from fall 2019 to January 2020. She was one of four staff members to resign that month. She disclosed her connection to the chamber before making her comments Thursday.

Typically, an audit will give an opinion on whether or not the organization conforms to accepted accounting principles and if the audit fairly represents the organization’s financial accounts. An unqualified opinion is the highest opinion offered. A qualified opinion results when there are a few areas of concern and an adverse opinion means there are serious problems.

An auditor can also issue a disclaimer of opinion — meaning no opinion — due to reasons such as not having sufficient records, as was the case with each year of the chamber audit.

Following the departure of the employees, Kennard said, Neeb requested an audit on Feb. 24, 2020. Just over two weeks later, the board decided to terminate the contract with the city.

“It was my hope that this audit would allow for the city and the chamber to work towards repairing the relationship, but I don’t have much confidence that there was transparency in the audit process,” Kennard, who attended the meeting virtually, said.

Kennard said she didn’t understand how detailed records could not be available when the chamber has hired an outside accountant to manage funds. She said she was also disappointed the audit did not mention how cooperative the staff was in the process, something she said the city’s annual audit provides, as well as that a representative of the auditor was not available to discuss the audit.

“The reason I think this is a big deal is because we have other nonprofit contracts and we need to ensure the taxpayer money is protected,” she said.

Councilor Jeanine Best criticized Moore and the other board members for not being aware of the state of the chamber’s finances. She noted payroll taxes were not paid for two years. Moore said since she took office in August all outstanding taxes have been paid.

“I understand there’s trust, but you always have to watch your back and you and the other board members did not watch the back of the citizens of Roswell and the citizens of Chaves County,” she said.

Best said the chamber was “blessed” by COVID-19 relief funds. The 2020 audit notes that in August 2020, the chamber received a $73,253 loan from the Small Business Recovery Act through the New Mexico Finance Authority and a $37,600 loan from the Paycheck Protection Program through the U.S. Small Business Administration. The latter can be forgiven if the chamber meets certain criteria.

“If you’re ever going to come back to the city and ask for money, I believe we need to know your checks and balances. We need to know who your bookkeeper is. We need an audit every year, not every three years,” Best said.

Councilor Juan Oropesa said that while he was initially against the city paying for the audit, he agreed it was time for the chamber and city to move forward.

“I think the city, the city council in particular, should also own the fact that the citizens were hurt, were damaged. The majority of the council are the ones who voted for the audit to happen,” he said.

“It is time to go on and I have confidence with what you have already said, that you are willing to turn it around and go forward and hopefully make it a better chamber,” he said.

Councilors Angela Moore and Jacob Roebuck asked Neeb if he was confident the city needed to take no further action on the audit and if he was comfortable in reestablishing a relationship with the organization. He replied yes to both.

Neeb said the purpose of a chamber is to help the businesses speak with one voice and that a strong business community is important to the city.

“If the business community is strong, we have the economics that move our community forward. We have already discussed the potential of working with projects together or whatever this relationship will look like,” he said, adding both the city and chamber will make sure assurances are in place.

“I think this was a series of unfortunate incidents that brought us to this. I truly believe the Roswell chamber is coming out of it very well in order to remain that important part of the business community that we need. I have no qualms about working with them,” he said.

City/RISD reporter Juno Ogle can be reached at 575-622-7710, ext. 205, or reporter04@rdrnews.com.

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