2 days ago
Matthews to require annual audit of one organization after setting nonprofit funding threshold
MATTHEWS, N.C. (QUEEN CITY NEWS) — Matthews is going to require all organizations that receive at least $50,000 from the town to submit an annual audit – but only one group qualifies at this time.
The Board of Commissioners initially was to consider requiring the audit for either all nonprofits who use town funds or annually receive direct or in-kind support excess of $75,000. A compromise of sorts was made, coming up with the $50,000 figure since it aligned with IRS tax-exempt guidelines.
This threshold only covers the Matthews Alive festival.
'Is no one else concerned that Matthews Alive is the only organization from which we're requiring an audit,' asked Mayor John Higdon. Commissioner Gina Hoover agreed.
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The multi-day festival is a staple of Labor Day weekend, held annually at Stumptown Park with a parade, live music, vendors and more.
'This board was so challenged by Matthews Alive for so many years, and now we're no longer concerned?' asked a frustrated Commissioner Ken McCool. 'I just don't understand how we continuously do this.'
Town Attorney Daniel Peterson noted that from a legal standpoint, 'this is a lawful exercise of treating people differently.'
Outgoing Town Manager Becky Hawke said she's explained to festival leaders the reasoning for singling them out for this potential policy.
'They receive significantly more funding, significantly more in-kind support than any other organization in town,' she said. 'There is wide margin, and when you add in in-kind support provided to Matthews Alive, that pushes them beyond six figures. That was where I felt comfortable creating the differential in the threshold.'
Hawke added that there's another nonprofit that has requested more funding, and given commissioners' support later this year, would pass the $50,000 mark.
'For these other organizations, we essentially cut them a check and don't have direct involvement in anything else that they do,' she said. 'It's much different with Matthews Alive. We are intently involved in that event. That was the difference.'
North Carolina statute states that if a city or county grants or appropriates $1,000 or more in any fiscal year to a nonprofit organization, the municipality may require that the group have an audit performed. If the nonprofit has an annual budget of less than $300,000, the town will provide an additional $5,000 in annual support to complete the audit.
The policy was approved unanimously.
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