During an April 24 meeting of the Robstown Area Development Corporation, it was revealed that the organization has not conducted required yearly audits for the past four years, has not filed required information to the Internal Revenue Service during that same time period and has not kept accurate records on payroll and purchase order expenditures.
Since our first story on this issue ran on April 30, more than one person has asked why this issue has earned so much attention. I have a few answers.
Every reader should care about this issue because the money that the RADC receives does not just magically appear in its bank account every year. It's taken from you, in the form of taxes.
When taxpayers have money taken from them, there is an understanding between the taxing entity and the taxpayer that the money will be handled in a responsible manner and be used for worthwhile reasons.
In fact, this responsibility is so great that a series of checks and balances are put into place to ensure that the money is not misused. In this case, many of those checks and balances failed.
Most of the blame for the RADC's financial problems has been placed at the feet of Ken Faughn, the organization's executive director. In many instances, this blame is placed correctly, and Faughn has acknowledged that it was his responsibility to file tax information and obtain annual audits. Filing tax forms, conducting annual audits and keeping track of expenditures is really the bare minimum of responsibilities needed to keep a non-profit organization afloat, so it is troubling that these actions were not conducted correctly.
However, it would be shortsighted to place all of the blame on Faughn, since those checks and balances do exist. While Faughn is the executive director of the organization, he answers to a 17-member board.
This board is made up of many elected officials, bankers, lawyers and business professionals. It is difficult to understand how a board of individuals from those different walks of life was unable to foresee a potential problem like the one that has arisen here. The board members have a responsibility to ensure that their employees are conducting the organization's business in a proper manner, and his failure is their failure.
But the checks and balances did not end with the board. The RADC receives funding from a number of taxing entities, including Nueces County, the City of Robstown and the Port of Corpus Christi. Each of these entities has, as part of their agreement with the organization, a requirement that the RADC present regular financial reports, in some cases as frequently as once a quarter, to their governing bodies.
In every instance, though, those taxing entities failed to do their part in holding the RADC financially accountable. For four years, Nueces County Commissioners, Robstown City Council members and Port of Corpus Christi Commission members were negligent in their responsibility to require these regular reports. While I have sat through many a tedious meeting listening to financial reports from organizations, the recent problems at the RADC demonstrate why those "boring" reports are so necessary.
Granted, the City of Robstown finally held the RADC accountable for its failure to present financial reports by limiting their funding this year, but I don't give very many points for that action.
For one, the decision to withhold funding has come after four years of negligence- too long, in my opinion. And second, the mayor and mayor pro-tem of the city are part of the 17-member board that oversees the RADC.
Although both Rodrigo Ramon Jr. and Elias Vasquez have said their calls for financial reports from within the RADC went unheeded, the fact that other board members say they were unaware of the problems makes one wonder how loudly they were calling. The strange act of sanctioning the RADC from their city council seats while sitting on the RADC board is difficult to understand.
With all this said, what happens now? There should be a renewed sense of responsibility regarding this issue at every level. Obviously, the issue of the executive director's missteps needs to be addressed, and taxpayers should have assurances that the RADC has responsible leadership.
Second, board members who were unaware of these issues need to look within to determine why they were oblivious. Perhaps some of those members should be asking a few more questions. On another level, the elected officials who give taxpayer money to organizations like the RADC need to look a little closer when they write those checks, and ask a few more questions of their own.
And, most importantly, the taxpayers need to understand that they don't just hand their money over into the dark. They have a right to require that their money be handled properly.
Christopher Maher is the Managing Editor for the Nueces County Record Star. Readers may contact him at 387-4511.