Mississippi Today

JSU Development Foundation under scrutiny for alleged ‘unintended’ use of restricted dollars as presidential selection looms

Published

11 months ago

November 7, 2023

Concerns about poor recordkeeping, inadequate accountability and the possible “unintended” use of restricted dollars led a member of the Jackson State University Development Foundation board to quietly resign earlier this year.

In his June 23 resignation letter, Brian Johnson, a 2009 Jackson State graduate who had served on the board for six years, wrote that he was stepping down after the board failed to pass his motion for a forensic audit.

Johnson was alarmed by internal presentations that he wrote showed the cash-strapped foundation using donor-restricted dollars to pay for its general obligations. But the foundation’s recent annual audits, Johnson wrote, had no discussion of the potentially improper spending.

“As a business professional in the financial services industry, I can’t seem to comprehend how the JSUDF Board of Directors received two financial reports over the last two years from two different JSU Division of Institutional Advancement comptrollers indicating the unintended use of restricted/designated funds, but the Foundation’s CPA audited financial statements have no note or mention of this information,” he wrote.

When contacted by Mississippi Today, Johnson would not comment for this story.

Johnson’s resignation letter is part of a cache of internal foundation documents that was obtained by Mississippi Today as Jackson State is poised to receive a new president. Last week, the Institutions of Higher Learning governing board for Mississippi’s public universities held a special-called meeting to discuss the imminent hire for just 16 minutes.

Taken together, the documents raise questions at the core of the foundation’s fiscal health. One document showed the foundation lacking about $7.6 million in “cash on hand to cover fund balances” and its operating budget, on average, bleeding at least $100,000 every year since 2012. Another, an internal audit that Jackson State completed in late September, determined the foundation was commingling in one account its operating and donor-restricted dollars for alumni, athletics and annual scholarships.

Brian Mittendorf, an Ohio State University accounting professor who reviewed the documents for Mississippi Today, said it wasn’t clear how the foundation has enough liquidity, or cash-on-hand, to meet its obligations, including scholarships and financial support for university athletics.

“There’s this consistent nagging issue which is that a substantial amount of their assets are restricted, though the exact amount is somewhat unclear,” he said.

But Mittendorf said he was only able to reach that conclusion — one of the concerns that led Johnson to resign — after reading “between the lines” of the foundation’s audit. He didn’t understand why the foundation’s audits are not drawing attention to the existential financial situation it appears to be facing.

“Somewhat surprisingly, they aren’t shouting about that from the rooftops in the financial statement,” Mittendorf said.

In an email, an IHL spokesperson wrote that “IHL does not govern the JSU Development Foundation, so questions about the foundation’s assets should be addressed to the foundation.” But IHL’s bylaws do permit the board to exercise a certain amount of oversight over the university-affiliated foundations, such as giving prior approval if a president wishes to sever ties with the foundation.

The foundation chair, Guyna “Gee” Johnson, a managing director of global fund ratings at S&P who has led the foundation since 2021, asked Mississippi Today to email her questions for this article but did not respond to repeated requests for comment by press time.

In a sit-down interview with JSUTV earlier this year, Gee said that “one of the things the board would like to do is to bring more attention to what we’re doing so people feel safe and they trust that we are being good stewards over their money so that they can continue to help our students grow.”

$7 million cash on-hand deficit?

The development foundation was founded in the 1960s to financially support Jackson State. It has been in hot water in recent years after an independent audit that IHL called for found tens of thousands of dollars in questionable credit card spending in 2014, leading the foundation to cancel its credit cards.

Johnson got on the board in 2017, a year after that independent audit was made public by the Clarion Ledger. But internally, the foundation was facing even more challenges than Johnson knew, he wrote in his resignation letter.

“It was then I learned the Foundation was behind on 990’s, facing legal issues due to past Foundation ventures/contracts and not having completed audited financial statements for the two prior years,” he wrote.

The board proceeded to work together to resolve the issues, Johnson wrote. In 2019, a resolution was introduced to acknowledge that the board had borrowed funds from temporarily restricted accounts, as well as its permanently restricted endowment, due to “having insufficient unrestricted operating dollars.”

The foundation, according to the resolution, intended to repay the “interfund debt,” which at the time totaled about $1.8 million. It’s unclear from the document Mississippi Today received if the foundation adopted the resolution.

And last year, the foundation finally executed the sale of One University Place, a mixed-use apartment complex across the street from Jackson State’s campus that was draining the foundation’s bank accounts, to the university for $6.9 million.

But it appears the sale wasn’t enough to get the foundation in the clear, according to the foundation’s 2021 audit and two internal PowerPoints presented earlier this year by Keilani Vanish and Sophia Williams, comptrollers for the foundation.

As of May 18, the date of the most recent presentation, the foundation’s restricted fund balances, which cover its designated accounts, totaled $11.6 million. But the foundation had just under $4 million in its operating accounts, leaving a roughly $7 million deficit in “cash on hand to cover fund balances.” A presentation in February showed a similar situation.

That’s when Johnson, who served on the finance committee, began to wonder why that information wasn’t included in the foundation’s audited financial statements, according to his letter.

The foundation should be communicating the difference between those documents to board members, Mittendorf said.

“The concerning part is if someone on a board is unaware of why those things deviate,” he said.

Mittendorf reviewed the internal presentations and the foundation’s 2021 audit, the most recent publicly available. Both documents, he said, were confusing for him to follow.

David Ewing, the accountant who oversaw the audit, said he couldn’t answer any questions about the foundation, because the university is “pretty strict” about the information it gives out and he didn’t want to lose a client.

Though Mittendorf didn’t go so far as to question whether the 2021 audit was accurate, he noted that it appeared to contradict itself. On page 3, the audit shows the foundation has about $33 million net assets “with donor restrictions, but on page 22, in a section titled “liquidity and availability,” the audit claims that the foundation has “no donor restricted net assets.”

That same section, Mittendorf pointed out, claims the foundation has access to about $35 million in “financial assets available to meet cash needs for general expenditures within one year.” But that doesn’t add up, he said, considering the audit also states the foundation has just under $42 million in total financial assets at year-end, with over $37 million of that in the restricted endowment.

Meanwhile, the foundation is holding a substantial amount of debt. In 2021, the foundation extended its credit line with Merrill Lynch from $2 million to $6.9 million, “secured with certain investments accounts held by Merrill Lynch in the name of the Foundation.” The balance was $5.9 million, according to the May comptroller presentation.

At BankPlus, the foundation has a $3 million credit line but the most recent balance is unclear.

A one-page internal audit

Johnson wasn’t the only one with questions. On June 1, an ex-officio board member emailed Gee and the board because there were rumors in the community about the presentation that allegedly showed the foundation spending restricted dollars.

When Gee replied-all on June 9, she wrote that if the community had access to that presentation, which was prepared for “various internal management or other analytical purposes” and was not an official financial position, then an “extremely serious breach of confidentiality” had occurred.

“The matters you mention in your email have been things that JSUDF boards, University Presidents and University CFOs have been aware of for at least 15+ years, and we have been addressing directly through corrective measures,” Gee wrote. “As we have University turnover, the board chair’s transition policy is to immediately request a meeting to properly provide an official financial update, provide and (sic) overview of the Foundation and align our goals with the new administration’s strategic plan.”

A week later, a similar concern about the “potential misuse of donated funds” led Jackson State to start conducting an internal audit of the foundation that was finalized in September, according to a copy.

It was only one page.

Dr. Alfred Rankins, Jr., Alcorn State University President

Though the university’s internal auditor, Christopher Thomas, wrote in an email that IHL Commissioner Alfred Rankins requested the internal audit, an IHL spokesperson wrote in an email that Elayne Hayes-Anthony called for it.

Hayes-Anthony has been the university’s temporary acting president since Thomas Hudson resigned earlier this year for reasons that remain unclear. She holds one of seven ex-officio spots on the board, the one reserved for the university president.

“Commissioner Rankins did not call for an internal audit of the foundation,” Kim Gallaspy, IHL’s interim communications director, wrote in an email to Mississippi Today. “Dr. Elayne Hayes-Anthony initiated the process by expressing concerns to the Board of Trustees about the use of JSU Development Foundation funds. Dr. Anthony was advised to exercise her authority to have her concerns investigated by utilizing the university’s internal audit staff to review any Foundation books, records or accounts needed to monitor and verify proper use of donated funds.”

Thomas wrote that he did not find any “current evidence” of misused donor funds, but that the foundation’s bank accounts only had $4.4 million as of Aug. 31 while the “designated accounts” totaled $11.8 million, a finding that correlates with the internal presentations.

“While the Development Foundation liquid funds are not adequate to cover the Designed Accounts, this does not represent the financial position of the Development Foundation,” he wrote. “The Foundation holds a multitude of assets that can be utilized to meet its financial obligation to the University.”

Though Thomas did not specify what those assets are, he did identify six areas where the foundation could improve its internal controls. Specifically, he recommended the foundation should monitor its budgets “based on actual revenue throughout the fiscal year to reduce overspending.”

He also recommended the foundation establish “separate bank accounts” for the operating budget — called “the Excellence Fund” — and the donor gifts, which were commingled.

Mittendorf said foundations should keep records in a way that prevents concerns about funds getting mixed up.

“When you have donor designed and donor restricted gifts, you want impeccable record keeping that segregates the funds,” he said.

It’s unclear if the foundation has done that.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

If you build it, they will play – that’s the thinking in Coahoma County

Published

1 hour ago

September 23, 2024

Staff Editor

mississippitoday.org – Rick Cleveland – 2024-09-23 09:19:36

Hope Field, a baseball-softball complex in rural Jonestown, will soon serve the youth of Coahoma County,

Bennie Brown, 71 years young, grew up in poverty in Jonestown, 15 miles from Clarksdale in Coahoma County, one of the poorest counties in the poorest state in the nation.

Brown’s earliest memories are of sitting on the front porch with his father, listening on the family radio to St. Louis Cardinals games on KMOX out of St. Louis.

“My dad was a baseball man, loved it,” Brown says. “He’d build a little fire out of leaves and twigs to keep the mosquitoes away and he’d listen to Harry Caray and Jack Buck just about every evening.”

Those St. Louis Cardinals included such remarkable Black ballplayers such as Bob Gibson, Bill White, and Curt Flood. Back then more than 15% of Major League Baseball players were African American, including many of the sport’s brightest stars. Today, only 6.7% of Major Leaguers are Black. The percentage has trended downward for decades.

The No. 1 reason is primarily one of economics. Youth baseball costs money, not only for the equipment. Young Bennie Brown loved the sport almost as much as his dad. When he and his buddies out in the country played ball, they used their caps for gloves, tree limbs for bats and a cheap rubber ball for a baseball. There was no money for gloves or bats. There were no little leagues. There were certainly no travel leagues.

It has remained that way out in Coahoma County in communities such as Jonestown, Lyon, Lula and Friars Point. But that’s about to change. In Jonestown, But God Ministries (BGM) has partnered with Major League Baseball Players Youth Development Foundation and Brasfield & Gorrie General Contractors to fund a $3 million state-of-the-art baseball/softball complex that will be known as Hope Field.

Coahoma County High School, which has never had a baseball field or softball field, will play their games there. So will organized youth leagues from T-ball on up. The land has been cleared and leveled. Baseball and softball diamonds have been carved. Bleachers, concession stands are under construction. Light poles are about to go up. Construction should be complete by December and ready for play next spring.

“I just can’t begin to tell you how much this is going to mean to our young people,” Brown said. “This has exceeded by wildest dreams.”

“Our boys and girls are going to have a place to play,” says Bennie Brown, who serves as associate community manager of But God Ministries.

The Hope Field baseball and softball facility will soon be a reality, and now But God Ministries is raising money to help fund the recreation leagues that will play games there. To that end, BGM has gathered several of Mississippi baseball’s most successful coaches to take part in a fund-raising dinner event on Thursday night (6 p.m.) at Broadmoor Baptist Church in Madison. Longtime Mississippi State broadcaster Jim Ellis will moderate a baseball discussion with coaching legends Ron Polk, Scott Berry, Mike Bianco and Bob Braddy. Ballpark fare will be served. Admission is $30.

The baseball/softball project is the latest in a long line of BGM projects to improve the lives of poor folks in Coahoma County. BGM already has also spearheaded a medical clinic, a dental clinic, a law clinic, a community center, an economic development center and a Montessori school.

Said BGM executive director Stan Buckley, “One thing I love about this baseball project is that it is something that will affect thousands of children and their families for many years to come. I think of the baseball fields on which I played as a child in Natchez. Those fields are still there and are being used over 40 years after I played on them. There is no telling how many children have played on those fields over the decades. The same will be true of our fields in Jonestown. Many children over a significant period of time will be touched through this project.”

Hope Field really is a dream come true for Coahoma County High School baseball and softball coach Wesley Davis, whose teams have played its home games at dilapidated fields in Clarksdale.

“The field we have played on had bad lighting, a flat pitcher’s mound, holes all over it and flooded every time it rained,” Davis said. “Plus it was a long way from where most of our players live. Many of these families don’t have transportation. This new facility is going to mean the world to us. I can’t wait.”

Buckley gives much credit for the Hope Field project to Jim Gorrie, CEO of Brasfield and Gorrie, which built the Atlanta Braves’ Trust Park. This will make a long story really short: Gorrie and Buckley met while working on mission trips in Haiti. Buckley asked Gorrie to come see what BGM was working on in the Jonestown area. Gorrie came and was intrigued. When he asked what he could do to help, Bennie Brown mentioned a baseball field. So Gorrie contacted his friends in Major League Baseball, MLB became involved, and the rest, as they say, is history.

Hope Field will have artificial turf in the infield and a Bermuda grass outfield. It will be a regulation-sized field, but will be convertible to smaller T-ball and youth league fields.

It’s the T-Ball and youth leagues that most excite Davis, who believes those leagues will help develop players for his high school teams.

“We’ve got plenty of athletic talent,” Davis says. “They’ve just never had a place to play baseball.”

If Luke Easter were alive, he would surely be smiling. Luke Easter, you say? Easter was a Black baseball pioneer, born in Jonestown in 1915, whose family moved to St. Louis after his mother died when he was 7 years old. Easter grew up to become one of the great power hitters of the old Negro Baseball Leagues, playing for the Homestead Grays in Pittsburgh and Washington, D.C. Easter called his home runs “Easter Eggs” and he hit many for both the Grays and later the Cleveland Indians after Jackie Robinson broke the color line in Major League Baseball.

Had Easter’s mother not died and his family not moved away from Jonestown, Luke Easter most likely never would have played baseball. There was no place to play.

There will be now.

For tickets to Thursday night’s 6 p.m. program at Broadmoor Baptist Church www.butgodministries.com or call the BGM office at 601–983–1179.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

Mississippi arts groups scramble as Thalia Mara Hall work continue

Published

2 hours ago

September 23, 2024

Staff Editor

mississippitoday.org – Sherry Lucas – 2024-09-23 04:00:00

Ripple effects continue to grow as Thalia Mara Hall’s temporary shutdown stretches into late September, Jackson arts groups adjust to keep season schedules on track and promoters eye lost opportunities and calendar dates that are slipping past.

Jackson’s premier performing arts venue was closed in early August after a weekend air–
conditioning failure and discovery of mold, sending stakeholders scrambling to secure
alternative venues or deal with cancellations. A recent state fire marshal report citing 22 fire
code violations at the building, and noting the health issues of indoor mold and human waste on its outside balcony heaped on more concern for onlookers who can only watch and wait for remediation work to begin.

The Jackson fire marshal will assist crews to address fire code issues once it is safe to return to he building, Jackson Mayor Chokwe Antar Lumumba said at a briefing last week. “We don’t want anyone in Thalia Mara Hall until the remediation goes forward.”

A contractor was on standby to address the balcony issue, he added, and city officials had already been looking into ways, such as appropriate fencing on the outside stairwell, to limit the area’s access by people who are unhoused and try to camp there.

Mayor Chokwe Antar Lumumba answers questions regarding the city’s water system during a town hall meeting held at Forest Hill High School, Wednesday, Dec. 7, 2022. Credit: Vickie D. King/Mississippi Today

“Thalia Mara Hall is going to be just fine,” Lumumba said, stressing that the 1968 structure is an aging building. “So, there’s not just a set of repairs that need to be made and then we’re in pristine condition. Once we make these repairs, I’m sure we will identify other repairs that need to be made, as an aging building necessitates,” he said.

At latest update, the city awaited proposals from new vendors and a revision from another for mold remediation. Once it starts, that work is expected to take between four and eight weeks, followed by a final inspection, clearance and certificate of occupancy. Added to the list of items to be addressed at the theater: rigging system, fire curtain and response to the fire marshal’s report.

In the meantime, loss of access deals a blow to parties that rely on the municipal building as the metro area’s best and, in some cases, only venue able to host certain productions and handle the capacity needed to make them work. Even when local nonprofit arts groups find alternative locations, changes come at a cost.

“Our ticket sales are definitely slower, and our new subscription sales are down from last year,” Mississippi Symphony Orchestra President and Executive Director Jenny Mann said. “We’re already spending about $20,000 extra that was unbudgeted, for all the moving we’re having to do.”

A frequent Thalia Mara Hall user typically logging 34 days there annually for concerts and
rehearsals, MSO embarks on its 80th anniversary season away from its home stage, and with a lot of celebratory activities postponed. MSO’s flagship Bravo series opening concert Oct. 12 is now set for Madison Central High School Auditorium in Madison and the season’s first Pops concert Oct. 26 moves to Jackson Academy Performing Arts Center.

“Those schools are really bending over backwards to accommodate us,” Mann said.

Anniversary celebrations remain on go for the Jackson Symphony League, marking 70 years, and the Mississippi Youth Symphony Orchestra, hitting the 75-year milestone. “So, we have some things in place, but it’s just not quite the grand celebration we had hoped,.” Mann said.

Thalia Mara Hall is crucial because funding is factored around that space, Ballet Mississippi
Executive Artistic Director David Keary said. “When the number of performances is lower and the number of people in the audiences is lower, your budget takes a pretty significant hit,” he said, estimating that hit around $35,000.

Dexter Bishop and Laura Hart dance in a previous production of Mississippi Metropolitan Ballet’s “The Nutcracker.” Credit: Photo by Lisa Speights

“The Nutcracker,” Ballet Mississippi’s biggest production of the year, is now scheduled for
Jackson Preparatory School’s Fortenberry Theatre with public performances afternoon and
evening Saturday, Dec. 7, and Sunday matinee Dec. 8.

“Ticket sales are impacted, school performances for children — we can’t do that,” Keary said. “We’re looking at about half the seat-selling capacity.”

Also out is a Friday night show, a festive evening aimed at young adults that was catching on, because of anticipated parking conflicts with another event at the school. “That hurts,” Keary said. “It really takes a hit on the momentum.”

He is still mulling how to adjust the production, particularly big scene changes in the first act, for the smaller site. “I do wish the city would expedite this,” he said of fixes to Thalia Mara Hall.

portrait of Keith and Kathy Thibodeaux are the co-founders of the Jackson-ba — Keith and Kathy Thibodeaux are the co-founders of the Jackson-based Christian dance company Ballet Magnificat! Credit: Photo courtesy Ballet Magnificat!

Jackson-based Ballet Magnificat! also confirmed its Christmas production for Jackson Prep, with Dec. 21 and 22 performances of “Light Has Come: The Angel’s Story” there. As a touring company, it is already more nimble with a facility change, but the different stage size may limit backdrops and the show’s multiple changes, Executive Director Keith Thibodeaux said. He hopes three performances instead of their usual two can catch the same number of audience members. “It’s a nice venue, and it’s a good place to watch a performance,” Thibodeaux said.

He is heartened by the arts community’s unified pressure for transparency and progress. “We need to get Thalia Mara Hall in order, and it’s not in order,” he said. “It’s sad that Jackson doesn’t have a nice theater like it did, and we would like to be there.”

Jackson promoter Arden Barnett had to cancel two September shows by Kevin Hart (which had already been postponed once), October’s Kansas concert and “Wheel of Fortune: Live” that was slated for November. He moved the concert by Joe Bonamassa (August) and comedian Ali Siddiq (Oct. 19) to a half-house format at the Mississippi Coliseum.

“From a pain level of 1 to 10, it’s an easy 10,” Barnett said, expressing his frustration and little faith the city can meet the timeline under discussion. “No one’s going to buy a ticket until that building is deemed 100 percent safe, and then it might be a bit of a struggle until we get a couple of shows in there. The next six months are pretty rough, even if they get it cleaned up,” he said, with the inability to confidently book shows given the necessary lead time to announce it and sell tickets. “It’s a huge snowball effect.”

Innovation Arts and Entertainment CEO Adam Epstein keeps a close eye on theater
developments with their Broadway in Jackson fall events and series on the calendar in
November and December: “Tina — The Tina Turner Musical” Nov. 19; “Cirque Dreams
Holidaze” Dec. 12; “Chicago: The Musical” Dec. 16; and “Mannheim Steamroller Christmas”
Dec. 27.

“If the city doesn’t start the remediation work in the next seven days, the entire
Broadway in Jackson series is in dire jeopardy of being canceled” through the end of this year, Epstein said.

Season tickets went on sale in August, and are down by more than half. “It’s
crickets.”

The Mississippi Book Festival did manage a switch that preserved some of its in-person student outreach and even scored an all-time high of 37,000 students with broadcast into classrooms around the state of children’s and YA author events before the Sept. 14 festival. Area schoolkids are traditionally bused to Thalia Mara Hall for the pre-fest activities.

“We had to pivot, at least three weeks out from the event,” festival director Ellen Rodgers said, adding a day to the schedule and the destination of Belhaven University for the Arts instead. Calling Thalia Mara Hall “a marquee venue we’ve come to rely on. It is such a treasure, so that was sad. We just made do. Hopefully, we’ll be able to get back there.”

The fest’s Thursday plans with Angie Thomas went virtual when weather threats prevented
school travel, but Friday’s author Kate DiCamillo event proceeded with 750 students in-person.

Changes meant fewer books went directly into kids’ hands. In-person students get a copy of
their own of the featured author’s new book; virtually participating schools receive copies for the school library.

Hyuma Kiyosawa is congratulated by USA IBC executive director Mona Nicholas and IBC Jury Chairman John Meehan for his men’s junior silver medal win. Credit: Photo by Richard Finkelstein

USA International Ballet Competition Executive Director Mona Nicholas remains optimistic that the City of Jackson will get Thalia Mara Hall back up and running as soon as possible. “They’ve not let us down in the past and I don’t believe they’ll let us down this time,” she said, pointing out there was already a plan in place to replace the air-conditioning, now moved up to sooner rather than later because of the latest malfunction.

Mississippi Opera Artistic Director Jay Dean said he has been told the theater should be usable by the time its April 26 production of “The Magic Flute” needs the space.

“We are not actively trying to secure an alternate space because in truth, there is no alternate space anywhere in the Jackson metro to do this,” Dean said. “We’re kind of in the same boat as the Broadway people — if it doesn’t happen at Thalia Mara Hall, it doesn’t happen.”

Dean took exception to characterizations of the theater as an old building. “It’s not an old
building. When you look at performing arts centers around the world, it’s a very young building that has been neglected. Carnegie Hall opened in 1891, that’s an old building. The Paris Opera House opened in 1875, it’s still functioning. … These are still viable performing arts centers because they’ve been taken care of and the maintenance of those facilities has been prioritized.

“The problems at Thalia Mara Hall did not develop because the A/C was off one weekend,”
Dean said. “That’s the snowflake on the tip of the iceberg.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

Podcast: This Mississippi elected official wants his office off the statewide ballot

Published

5 hours ago

September 23, 2024

Staff Editor

mississippitoday.org – Adam Ganucheau and Bobby Harrison – 2024-09-23 06:30:00

Mississippi Today’s Adam Ganucheau and Bobby Harrison discuss Insurance Commissioner Mike Chaney’s recent proposal to change his office’s traditionally elected position to an appointed one. Chaney is not the first Mississippi elected official to suggest such a bold step, and the politics of the state could make this debate a fiery one in 2025.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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