Recreation council management, oversight questions unanswered
Wednesday, 23 April 2014 12:48

Embezzlement, loss of nonprofit status among
problems; oversight of local operations is scant

 by Nicole Rodman

A host of financial issues have plagued local recreation councils in recent years, leading one council to lose its federal 501(c)(3) status, another to be dissolved and a third to be placed on probation.
    Comments from county officials and the chairman of the Baltimore County Board of Recreation and Parks on these issues have raised more questions than answers.

Financial concerns
    The Gray Charles Recreation Council is just now starting to recover from financial issues that have  plagued it since at least early last year.
    According to the Jan. 9, 2013, meeting minutes of the Board of Recreation and Parks, the Gray Charles Recreation Council lost its 501(c)(3) status — a tax-exempt status available to nonprofit charitable organizations.
    In order to maintain that status, organizations must remain nonprofit, refrain from lobbying or political campaigning, limit unrelated business income, operate in accordance with stated exempt purposes and file annual reports with the Internal Revenue Service.
    While it is unclear what specific circumstances led to the loss of the Gray Charles council’s 501 (c)(3) status, the council is reportedly working to resolve the issue.
    “They are working with an accountant to file all taxes and get a complete and accurate set of books,” Michael Weber, chairman of the county Board of Recreation and Parks, told The Eagle. “It is my understanding that the accountant is working to restore the 501(c)(3) status.”
    Brian Weir, a Board of Recreation and Parks member representing Council District 7 and a current candidate for County Council, characterized Gray Charles’ financial issues as due to “apathy.”
    “They burned out,” he said of the council members, noting, “These people are volunteers.”
    As Weir noted, the council is “running in the black now.”
    “They have a bunch of new people there working; they’re digging out,” he said.
    Severe financial issues also plagued the Patapsco Neck-Norwood Recreation  Council for years.
    Those issues ultimately led to the council’s dissolution.
    According to the minutes of the board’s May 8, 2013, meeting, the Patapsco Neck-Norwood (PNN) Recreation Council was dissolved after the son of the council treasurer was found to be embezzling funds from the council.
    According to Weir, the treasurer’s son, apparently unbeknownst to the treaurer, got access to the council checkbook and began writing checks for personal use.
    Neither Weir nor any county officials were able to provide the name of the treasurer’s son. As of press time, The Eagle was unable to obtain that information by other means.
    When asked for comment on the issue, Weber told The Eagle, “This matter was turned over to the police. It is my understanding that they have dealt with this issue.”
    As the May 8 minutes state, “[Former board member Wayne] Delfinbaugh further stated that the son of the treasurer was fined $10,000 to $15,000 and sentenced to two years in jail. He is to pay this sum to PNN when he is released.”
    According to Weir, the embezzlement occured approximately 4 to 5 years ago and was just caught in the last year.
    Weir said that he was unable to provide more specific details, since he has only been on the board for two years.
    The May 8 board meeting minutes also detail financial issues stemming from the West Inverness Recreation Council’s failure to file taxes for “several years.”
    As Weir explained to The Eagle, the West Inverness council has been placed on probation pending resolution of their tax issues, which date back at least five years.
    The West Inverness council has until June to correct the tax issues and put together a full council board; otherwise, the council will likely be merged with another council or dissolved.
    “If West Inverness Recreation Council is dissolved, then Bear Creek would be the logical council to absorb their programs,” the board’s Jan. 8, 2014, minutes state.
    When asked why the West Inverness Recreation Council did not file taxes for several years, Weir stated that he did not know, but noted that it was likely due to “thinking it would never catch up with them.”

Questions of oversight
    Each of these local council issues – loss of status, embezzlement, failure to file taxes — raises questions regarding the  financial oversight of county recreation councils.
    All recreation councils in Baltimore County are operated at the local level and run by community volunteers.
    When asked to comment on the financial issues plaguing the three local councils, Barry Williams, director of the Department of Recreation and Parks, did not respond.
    Attempts to obtain comment from Lenny Camphor, community supervisor for the Watersedge office (of which West Inverness is a part), were also unsuccessful.
    A number of other department officials — including Region 4 coordinator Donald C. Kuklinski Jr. and Community Outreach Liaison Mike Schneider — referred The Eagle to county spokesperson Ellen Kobler for comment.
    Kobler explained that local recreation councils are not operated by the county.
    “In Baltimore County, recreation councils operate as independent entities and are not subject to supervision by the Baltimore County Department of Recreation and Parks,” Kobler told The Eagle in a statement.
    “Every two years, they must submit a certification of financial status to the all-volunteer Baltimore County Board of Recreation and Parks,” Kobler said. “The Board of Recreation and Parks reviews these submissions and determines whether the council will be re-certified.”
    Every two years, each  recreation council in Baltimore County must be recertified by the Board of Recreation and Parks.
    “The certification process allows those councils to have priority access to fields and facilities and to provide insurance protection for all volunteers,” Weber explained.
    Weir said the recertification process involves filling out a two-page form.
    On the form, councils must include a list of board officers, the council budget and copies of filed federal and state tax returns.
    According to Weber, the recertification process was recently updated for the 2012-2013 time period.
    Weber did not respond to follow-up queries regarding the nature of these updates by press time.
    Currently, the only Dundalk-area recreation council that is not recertified is West Inverness, which remains on probation.
    According to Weir, it was during the recertification process that the board discovered that the West Inverness council had not been filing tax reports.
    This does, however, raise questions as to the adequacy of the recertification process, since the council was able to avoid detection despite not filing taxes for at least five years.
    Weber did not directly respond when asked how West Inverness could have avoided detection, noting instead that “the board is a policy making body. These policies constitute the course of action to be taken by the department [of Recreation and Parks].
    “The board hears matters as they are brought to its attention through communication with the department and the local council volunteers, parents, etc.,” he added.    
    Weber also declined to answer directly when asked if the recertification process was the only form of oversight that the board exercises over local councils.
    According to Weir, each local recreation council board is responsible for conducting its own financial review.
    When asked how such financial issues could have gone unnoticed for so long, Weir did not directly address the question but instead characterized the current county board as one that is “staying on top of” the councils.
    “This board is working very hard right now to get this stuff done.”