Independent task force releases YouthPride findings ahead of tonight’s community forum

Also included in the report is an estimate of $81,204 in debt, though the report states that certain financial information, such as bank statements, the organization’s checkbook and lists of outstanding debtors were not given to the task force. “Assumptions [were] made to arrive at YouthPride’s outstanding debt,” the report reads.

The report’s conclusions:

  • YP has breached its own bylaws which require no less than five members serving as the board of directors. No proof of required monthly board meetings exist or minutes of those meetings. Inferred last board meeting was December 2010
  • YP has not filed its 990 federal tax return for years 2009 and 2010. Subject to IRS penalties and revocation of YP tax-exempt status if YP does not file three consecutive years. Prevents donors from claiming donations as a tax deduction on personal tax returns
  • YP has no evidence that it filed or paid its 941 payroll tax filings withheld from employee paychecks for the quarters ended Sept 2011 or Dec 2011. State labor violations may also have been breached regarding COBRA and proper notice of separation requirements
  • Lease agreement cancelled due to non-payment of rent since June 2011. Inman Park Methodist Church has formally filed law suit for back rent, legal fees, and penalties as stipulated in the lease agreement. Eviction notice is imminent subject to the Fulton County Sheriff’s schedule
  • Directors & Officers insurance is in force since June 2011. No preexisting clause exists since prior coverage lapsed. Other proof of insurance coverage was not provided nor was payment of premiums confirmed
  • Last available budget issued was for the fiscal year ended Sept 2011. No board of directors existed at this time and therefore the budget was not approved or ratified
  • Bank statements, check book, and list of outstanding payables owed to vendors, consultants, and other debtors are not available to assess the current cash position and outstanding debt owed
  • No internal controls exist to deter fraud or provide financial oversight in compliance with certain aspects of the Sarbanes-Oxley Act for nonprofits. No Audit Committee exits to ensure financial accountability
  • No security of confidential client files has been determined. All files have not been completely accounted for, calling into question possible HIPAA violations  

The report closes by asking a series of questions about the continued viability of the youth advocacy organization: With no governing Board of Directors, who is held accountable to answer to Donors and Supporters? Who is the custodian of assets such as bank accounts? Who will ensure liabilities are paid? Ultimately, how are LGBT Youth going to be served?

YouthPride’s financial troubles became public in December, when Board President Jordan Myers posted on Facebook that the agency needed to raise $25,000 in one week, and Executive Director Terence McPhaul said YouthPride had to raise $40,000 by Dec. 31 or face closure in 60 days. Despite that deadline passing, YouthPride currently remains open.

In the wake of the financial crisis, questioning by GA Voice revealed confusion within YouthPride about such basic issues as who serves on the board of directors and when the last board meeting was held.

Led by gay teacher Charlie Stadtlander, volunteers formed two ad-hoc committees to try to assess the current financial and legal status of YouthPride and insure that at least some services for youth continue should Atlanta’s troubled LGBT youth agency close.