Jake Lowary and Stephanie Ingersoll

The Leaf-Chronicle

CLARKSVILLE — Roxy Regional Theatre board members have refused to release additional information and documents related to the nonprofit organization's construction fund that an audit shows was wiped out last year.

On May 25, The Leaf-Chronicle reported that about $300,000 in private donations pledged to Roxy Productions for a new building was used to fund operations instead, leaving the building capital fund with a zero balance by Aug. 31, 2015, according to the most recent audit of the nonprofit’s finances.

Those donations had been “temporarily restricted” for the specific purpose of building a new facility, but those funds were reclassified as “unrestricted assets” and used to pay operating expenses, salaries and to produce shows.

Roxy theater building fund wiped out

Following the initial report, The Leaf-Chronicle requested the prior 10 years of board minutes.

Former treasurer Barry Kitterman told The Leaf-Chronicle that a previous board had agreed to increase executive director Tom Thayer's salary and co-founder John McDonald’s salary decreased for tax purposes as they neared retirement. Thayer's salary doubled in four years from $46,754 in 2011 to $92,883 in the 2014 tax year.

Requests for board meeting minutes going back 10 years — when Kitterman said talks likely began of the arrangement — were denied by Roxy board chair Stacy Turner on May 26 because they were "overly burdensome."

In an e-mailed response to questions and requests, Turner and two other members of the executive board said that after being made aware through management of financial concerns, the board collected all pertinent audits, tax records and financial statements to obtain a picture of the financial state of the organization.

“First, your request is overly burdensome," Turner wrote. "Second, I do not believe there is any legal authority for same, accordingly I am denying that request on behalf of the board.”

In response, The Leaf-Chronicle narrowed its request to board minutes related to using building fund capital campaign donations for operating expenses and any board minutes relating to salary increases for Thayer and McDonald.

Again, that request was denied.

On May 27, The Leaf-Chronicle again revised its request and asked for board minutes for the last year, a list of board members as it stood Jan. 1 and May 27 with a list of members who resigned, a copy of comments from those who resigned that were read into the record, according to a source, and how much money was raised for the building fund.

Turner did not reply that email, nor was a response given by management.

The board members listed as of Thursday on the Roxy's website were Turner, chair; Kay Haase, vice chair; Nancy Ladd, treasurer; Joseph Britton, Nancye Britton, Ricki Holleman, Kurt Kowalski, Janet Mund, Nicole O’connor and Linda Shephard.

On June 3, The Leaf-Chronicle made a final request for answers and board minutes for the last year, specifically any since Jan. 1, along with a list of board members' email addresses and any statements former members may have read into the minutes when they resigned.

There was no response from Turner or from Roxy management.

A letter to donors sent this week, signed by Turner, provides much the same information given to The Leaf-Chronicle on May 25, reporting that in the wake of the audit, the board took action to hire an external controller “and is actively involved in the financial processes of the organization.”

“This letter is to inform you of the audit’s findings and to make you aware that any donation provided as stated above for the temporarily restricted purpose of building an arts center, was used toward operations,” it states. “Also this letter is to assure every donor that all donations given to the Roxy were used for a legitimate business purpose.”

The letter thanks donors for support. It does not offer donors a way to ask for donations to be returned if the donor did not approve of changing the use of that money.

Nonprofit leaders gather, stress transparency

Following the news of the Roxy's building fund depletion and the Salvation Army board's collective resignation last month in the wake of an alleged scandal involving gift cards, Leaf-Chronicle General Manager and Sales Director Carol Daniels organized a half-day nonprofit advisory panel and information session. The Tuesday event was designed for local nonprofit leaders to ask questions about governance, responsibilities and other topics.

The Leaf-Chronicle partnered with the city, county and United Way of the Greater Clarksville Region to host the event. Representatives from the Roxy were among those who attended.

Ginna Holleman, CEO of the local United Way office; Kim Drake, vice president at the Center for Nonprofit Management; and Margaret Dolan, president of the Knowledge Division for Local Shares Inc., sat on the panel and took questions from attendees.

When discussing transparency, Drake said a "lack of transparency" is a warning sign that a nonprofit's board or CEO are not managing the nonprofit effectively.

Every year, nonprofits are required to file tax forms with the IRS and conduct audits — both of which become matters of public record — and if they apply for public funding, typically are required to provide similar documents to municipalities who allocate funding.

"Anyone can request financial documents," Holleman told the attendees.