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CI1--Y OF SAN BERNARDOo - REQULlr FOR COUNCIL AC'~N
From:
Kenneth J. Hen:ierson, Director
Subject:
J3REND.lI. JO RICE - JUVENIIE
~ ~.l'.l:ta< INl'ERVENTION
mxiRAM
Dept:
Camrnunity Developnent
Date: May 9, 1989
Synopsis of Previous Council action:
On May 16, 1988, the Mayor and l'nmrllt Council considered and approved certain
FY 1988/1989 moo eligible projects, PJ."YL= and activities.
On May 16, 1988, the Mayor and 0...,.., Council adopted a resolution authorizing
and directing the Mayor to execute an ay..=:lllellt bet10ieen Brenda Jo Rice
(Juvenile Fi.resetter Intervention P.l.U:jLc2Il1) and the City of San Bemardino.
Recommended motion:
'!hat the financial status of the JuvenUe Fi.resetter Intervention PL"YLcull be
considered in conjunction with the org-cmi.zation's application for non-profit
and tax-exempt status. F\1rt:her, that &'taff be directed to take "W.L..~.date
action in acx:orclance with federal, stat.e and local regulations.
'-.14 G. ~~
Phone:
5065
Supporting data attached:
Ward:
1-7
FUNDING REQUIREMENTS:
Amount:
$18,526.80
Source: (Acct. No.)
121-544-57694
(Acct. Description)
moo FY 1987/1988 Allocation
Finance:
Council Notes:
75.0262
Aoenda Item NO.-6Y
. Clh OF SAN BERNARD~O - REQUM FOR COUNCIL AC~N
STAFF REPORT
On January 9, 1989, the Ccmmmity Develc:pDeIlt DeparbDent =n-
ducted a p1:ogl.aw am financial audit of the Juvenile Firesetter
Irrt:ervent:ion PL'-":ILcIIIl. As a result of said audit, a )'1ItmhP.r of
1-L'-":ILcIIIl areas were foun:l not to be in oarpliance with certain
federal, state am local regulations. '!he organization did not
have in its pose-",\;'sion certain items, such as Articles of
IncoJ:poration for a non profit status, state am federal tax
exenpt status identification, organizational By-laws,
Certificate of Evidence of Authority by the organization I s
govemi.n;J body am p1:'-":ILcIIIl deficiencies deal:in;1 with general
aClOC11I1ti.n;J principles.
On January 17, 1989, the C'nmmnrlity Deveh.p.....rt; DeparbDent sent a
letter (Exhibit "A") via certified mail to Ms. Brema Jo Rice
(Juvenile FiIesetter Irrt:ervent:ion Pi.'-":ILcIIIl) wtlin:in;1 the
ooncems raised by the audit am requesti.n;J a response regardin:J
said ooncems. Consequently, follawin] J'lOJ:I\\al. ~tres am
mandated policies as identified by the ~L""""""lt between the
ozganization am the city, all clisOOrsements of :furJjs were Int
on hold until the concems stated in the letter oc:W.d be suc-
cessfully resolved.
On March 8, 1989, Ms. Rice personally delivered a notarized cx:py
of the Articles of IncoJ:poratian which were not awroved am did
not contain the erx:lorsed seal of the Secret:azy of state, copies
of the ar:plication for exenption to the Califomia Frand1i.se Tax
Board dated August 31, 1988, am a cx:py of exenption under
Section 501 (c) (3) of the Internal Revenue Code dated September
3, 1988. Ms. Rice also sul::mi.tted a c:x:mpleted am notarized copy
of the organization's By-laws. Unforbmately, the copies of the
requixed dlY'lnn<>TJts did not indicate proof of the organization's
non-profit status nor a state am federal tax exenpt status
identification.
On April 20, 1989, ChmIntity Develc:pDeIlt staff contacted the
Sec:ret:al::y of state I s Office for any updates on the ar:plication
am were infonned the Articles of Inc:01.};luLC1tion for the PL'-":ILcIIIl
were beiD:J fonrcm:led to the Frarx::hi.se Tax Board (exenpt section)
for consideration before maki.n;1 a final detennination on the
classification of the organization. Also contacted was the
Intemal Revenue Service (IRS) which infonned staff the
organization's ar:plication was retumed to Ms. Rice because of
i.ncaupleteness am that re-su1:mi.ttal ~d have to be made with
p1:00ess:in;1 fees attached for further consideration. To date, no
evidence of awroved non-profit status or state, Federal tax
exenpt status has been fumi.shed.
May 9, 1989
75-0264
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S'D\JT ~. O:mi:';ftt~...
BraIIdaJoRice
Paqe -2-
I, therefore, reo .,.,"""Xi that the claiJns for reiInbursement for
the nxmths of Dec:eni:ler, 1988 throogh April, 1989 (a total of
five (5) nxmths), not be ~sed until such tiIne as awro-
priate docn-TJt:atian has been subnitted fran the Secretary of
state's office, Franc::hi.se Tax Boazd, and the Internal Revenue
Service and, until such tiIne as a legal opinion has been
rerxiered by the Office of the City Attorney regardin;J the
allCMability of retroactive payments.
KENNElH J.
Direct:or of CaIIlII..mity Devel
KIH/EIF/lab/3214
attachments
May 9, 1989
......,
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,./
CITY OF
San Bernardino
COM"UNITY DIVeLO'MINT DI'ARTM.NT
KEN NET H J. HEN 0 E R SON
DIRECTOR
January 17, 1989
Ms. Brenda Jo Rice
Juvenile Firesetter Prevention Program
200 East Third street
San Bernardino, CA 92410
Re: FY 1988/1989 CDBG AGREEMENT REVIEW
Dear Ms. Rice:
I am in receipt of the December, 1988, request for reim-
bursement of funds from your organization dated January 9,
1989. Upon review of your request for reimbursement, a
number of concerns have arisen which need to be addressed
and corrected prior to additional CDBG funds being
disbursed as per Section 11 of your FY 1988/1989 CDBG
agreement. specifically, the concerns in question are as
follows:
1. A completed copy of the Articles of Incorporation for
your non-prOfit agency are not on file which are
certified as being approved by the Secretary of the
State of California, coupled with the imprint of the
State Seal of California as mandated by the city of
San Bernardino.
,
,
2. A completed and notarized copy of the By-Laws govern-
ing your organization are not on file as required by
the City of San Bernardino.
3. Since your organization is a non-prOfit organization,
the City is required to have your 501C(3) Tax Exempt
Status Number on file. This identification number has
not been furnished to the City as of this date.
4. A certified copy of Evidence of Authoritv of the
governing body as per Section 20 of your CDBG agree-
ment is not on file.
EXHIBIT "A"
PRIDE -I
~~RESS
300 NORTH 0' STREET, SAN BERNARDINO.
CALIFORNIA 92418-0001 714/31.-101.
.........-
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,
,)
,
Brenda Jo Rice
January' 1'7, 1989
Page -2-
~
5. a) The overall utilization and expediture of funds as
it pertains to the CDBG FY 1988/1989 agreement,
Secton 4, subparts (a), (b) and (d) are not in
compliance. Improper travel justifications and
documentation is being submitted.
b) Reimbursement justifications are submitted without
proper documentation for salaries and are based on
aross income criteria versus ~ income criteria
contrary to Section 4, subpart (d) of your CDBG
agreement.
6. Overall expenditures are not documented within
generally acceptable accounting principles contrary to
Section 5, subparts (b) and (c) of your CDBG agree-
ment.
7. Clear and quantified reporting activities as it
pertains to services being rendered to low and
moderate income families are vague and do not measure
actual preventative trends on how this program is
impacting the city of San Bernardino (Section 6, CDBG
agreement).
8. Disbursement of CDBG funds have previously been made
for the months of JUly, 1988 through November, 1988
with payroll salaries being reimbursement by the
Community Development Department which are contrary to
the CDBG agreement, Section 4, subpart (d). This
being the case, staff is hereby requesting evidence of
payments to the entitled governmental agencies of
employee taxes, social security, and/or other with-
holdings as per your CDBG agreement as described
above.
Your cooperation and written response to these concerns
will allow us to expedite your payment request as quickly
as possible. Your December reimbursement request is
attached to be resubmitted once the concerns in questions
are corrected.
Should you require additional information or clarification
regarding the above referenced concerns, please do not
hesitate to contact me at 714/384-5065.
Edward L. Flores
Community Development Specialist
cc: Director of Community Development
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