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Sports Commission update: McCasey’s compensation and Cohn on the loan – a reponse to readers



After a nonprofit defaulted on a $400,000 loan from the city, Sacramento Press wanted to know: How much does the executive director make, and why did the city make the loan in the first place?

As one of the more prolific blog commenters in the Sacramento region noted, nonprofits disclose their staff compensation figures in their 990 IRS forms, which as public record are easily accessible through sites like GuideStar.org.

Tthe Sacramento Region Sports Education Foundation only lists one "key employee" on its 990s – its director, John McCasey – who earned $163,975 in 2010, $160,600 in 2009 and $155,354 in 2008.

The foundation has been in the red since 2009, and while a nonprofit by definition does not seek to make money, the audit concluded the "pattern of losses and failing to clearly account for them indicates a lack of financial planning and effective organizational management."

The report also indicated that the SRSEF failed to follow its own bylaws or the conditions of the city loan, including a requirement that the loan money be kept segregated from the foundation’s general fund and only be used to organize and host the 2011 World Masters Athletics Championships.

McCasey also draws a separate salary from the city for his role as the executive director of the Sacramento Sports Commission. I’m working on a story that will answer reader’s question about on what the comission recieve from the city.

Other readers asked why the council had made the loan in the first place. After the meeting Tuesday, I asked Councilman Steve Cohn if he thought that the loan had been a mistake and what the council would do differently going forward.

He indicated that the loan approval may have been rushed because of the time-sensitive nature of the tournament it was intended for, and that the city should have taken greater care to ensure the foundation had financial controls in place.

"I think in this case, because of the nature of the events, people may have gotten caught up in trying to make things happen quickly, and really didn’t do the full examination that was needed in terms of the controls," he said. “Just because we want to do an event, doesn’t mean we don’t put the controls in place.”

Here’s Cohn’s full response – in a regrettably wobbly video:

 
  • Jared – are you saying that McCasey gets paid an additional salary from the City of Sacramento on top of the $163,975 he gets paid (not earns) from SRSEF?

    • Jared Goyette

      That’s my understanding, but on second read, there is one aspect of the email the City Clerk’s office sent me in response to a public records request on McCasey’s compensation that I’m confused by and I want to get that cleared up first. I’ve crossed out that line in the article for the time being but I’m working to figure it out.

      Update: The clerk got back to me. Yes, the salary he draws from the city is separate from the salary he draws from the foundation. I still have questions on the breakdown and the clerk is helping me with them – should have more to report next week.

  • bye bye Sacpress

    Careful Jared – if you shine a light on Sacramento’s out of control spending and this tanks the police union’s sales tax increase, you might receive a page out of the “Police Union Playbook”.

    Example Costa Mesa – original story:
    http://abclocal.go.com/kabc/sto ry?section=news/politics&id=8785325

    Follow up:
    http://articles.latimes.com/2012/sep/16/local/la-me-tactics-20120916

  • While their 990’s show a remainder of about $7,000 for the 2008 filing, one thing that might also be of concern is their net assets/fund balances at close of each year….indicating that they piled on debt year over year…

    2008 — (275,000)
    2009 — (438,000)
    2010 — (653,000)

    … With financials like these, either these reports were not distributed in the board packets, or they were not explained to the council, or the council chose to ignore them altogether…. all in the context of having Tom Friery, former city Treasurer on their board…

    A ‘going concern’ letter from an auditor should have been issued a long time ago, and I bet was indeed so issued, but concealed from publication, as often happens under such circumstances (such as with St. Hope schools, actually, as was found by Inspector General Gerald Walpin)… Such a letter is a kiss of death for a nonprofit org, and in many cases it forms ‘judicial notice’ with regard to creditor actions against the org…

    Every nonprofit should stand up to this scrutiny, especially those with government contracts, especially the shadow government that the mayor has attempted to engineer to escape constitutional requirements for process rigor…

    In this case, it’s pretty clear who financed this org’s debt…. shamefully…

    • Jared Goyette

      You raise some interesting points. I can do a public records request to see if such a letter exists. That’s a start.

    • The issue HERE is that their debt didn’t start with the added $400k from the City — they already had nearly $300k in debt prior to the loan, which is roughly half, or more, of their annual revenue… IF they had serious audits in prior years, rather than ‘friendly’ audits that ‘looked the other way’, it is likely that they may have year over year ‘going concern’ letters….

      Another issue that I’m trying to drive home is that ALL nonprofits that engage public funding should have this scrutiny — actually ALL nonprofits REGARDLESS of public or philanthropic funding should have this scrutiny — BECAUSE of their IRS tax status and ‘public welfare’ status within state law… ALL ‘public welfare’ nonprofits should face such scrutiny, including those involved in the ‘shadow government’ of Sac’s mayor…. Now THAT would be NEWSWORTHY….

    • …and EYE ON SACRAMENTO, or whatever that ridiculous group is called now, won’t TOUCH these issues, because KJ is involved, and they just LOVES their KJ….

    • Just ask EOS why they didn’t comment on the wasteful spending on behalf of KJ’s SMI’s and the arena scam…. ***crickets***

    • bye bye Sacpress

      So you are crusading against Eye on Sacramento becasue they haven’t turned over enough stones? Or the stones that you prioritize are not their stones?

      The reason that Eye on Sacramento gets any press at all is because of the lack of other watchdog group enforcing public accountability. Instead of bashing EOS, we should be saying thank you while asking how do get more groups scrutinizing city hall.

  • Great story – great work. This is what newspapers are supposed to be doing.