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Updated: Wednesday, November 7, 2007
Published: Wednesday, June 7, 2006 |
A New Beginning
... And Now For Some Housekeeping
Dear members:
As NABJ begins our next chapter with the appointment of our new executive director, Karen Wynn Freeman , we are excited that we were able to attract such a dynamic, experienced, veteran association leader. Those of us from the search committee and national staff who have met Karen know the talent she brings and are eager to watch her transform and reinvent the national operations of the organization.
Karen will be stepping in at a challenging, yet exciting time for the association. We have just celebrated our 30th anniversary and are preparing for a powerful annual Convention and Career Fair in Indianapolis, August 16-20. We have injected new energy into NABJ's communication, with a robust Web site, regular e-mail updates and delivering three printed NABJ Journals in less than nine months. (The latest Journal, featuring tributes to Gordon Parks and Coretta Scott King, begins to arrive in mailboxes this week).
We have also extended NABJ's footprint across the nation and the globe, reaching out to journalists affected by Hurricane Katrina and children affected by malaria in Africa. At the same time, we are coming out of one of the associations more pressing chapters with the resignation of our previous executive director in March.
This report to the membership comes after questions were raised earlier this year about accounting practices in our national office. As a result, Treasurer John Yearwood and the finance committee have conducted a detailed investigation to unravel those accounting practices and get an accurate picture of our finances. We have also commissioned an outside firm to audit the 2005 finances. While it would have been inappropriate to say much more until after conducting the investigation, I thought it appropriate now to share with you what happened, what action we took, and how the association is doing now.
As you may remember, on March 6, Tangie Newborn resigned as NABJ's executive director after questions were raised about her management of the associations finances. Newborn had been with the organization more than six years.
At the January board meeting, Newborn reported to the treasurer, the finance committee, the board and me a 2005 year-end surplus of about $40,000. After a subsequent investigation, however, that report turned out to be inaccurate.
In late February, as we began preparing for our finance committee and spring board meetings in Indianapolis, we again started to gather our financial information for review. But as requests for the latest information and 2005 end-of-year numbers were being made of the executive director, the answers were slow in coming.
On the last day of the month Tuesday, Feb. 28 I received a late evening call from Rodney Brooks, former NABJ treasurer and co-chair of the finance committee. He and Jackie Greene, the other co-chair of the committee and a former NABJ treasurer as well, had received a call from our accountant saying that he had wanted to send us information but had been delayed by the executive director.
The next day, March 1, the treasurer, finance chairs, the accountant and I met on a two-hour long conference call. What began to emerge was evidence of sloppy financial management at the national office. Bills were not being paid and checks had gone undeposited for months, all while NABJ was sitting with more than $1.7 million in the bank. We thought we had ended 2005 with a $40,000 surplus, but in reality it was looking like NABJ had closed the year with an operational deficit of more than $200,000, our accountant had concluded, based on the available record of income received, bills paid, outstanding bills and account balances.
On Friday, I convened an emergency call of the Executive/Personnel Committee and apprised it of the situation. On Monday, Yearwood and I visited headquarters to discuss the questions with executive director. She resigned and left the premises that morning.
In the subsequent inspection, it was clear that while there was ample evidence of sloppy management, a lack of candor in reporting of information, and repeated failures to follow through with timely bill paying, the investigation has found no evidence of theft, misappropriation or significant misuse of NABJ funds or resources.
So, despite all that has happened, the system indeed worked. Within six days of discovering the issues, your president and board took swift and decisive action and the executive director had resigned.
Next, I thought it important for us to swiftly do four things:
1) Establish a continuity of leadership.
2) Pay off any outstanding obligations.
3) Find out what really happened, and
4) Make sure we do everything we can so that this never happens again.
I quickly tapped some of the best leadership minds in the organization past presidents Herbert Lowe, Sidmel Estes Sumpter and Arthur Fennell and asked them who we could get to step in and run the office, even on a short-term basis. All immediately pointed to JoAnne Lyons Wooten . Wooten had been executive director under Fennell and presided over some of the most successful years NABJ had seen up to that point.
Within a week, we were able to convince JoAnne to step in and run the organization for the next 60 days. And what a difference she made! She instantly added organization, professionalism and urgency to the national office leadership. She and I talked frequently, and I did all I could to try to convince her to stay longer. Alas, she was unable to extend her tenure but was able to provide us with critical leadership during that period and give us enough time to launch a national search for executive director and ultimately land Wynn Freeman (she was JoAnnes top choice).
Also within a week of the revelations, we asked treasurer Yearwood and finance co-chairmen Brooks and Greene to launch a full-scale investigation, tapping whatever resources they needed to find out the real state of NABJ's finances. They presented their initial findings to the board at its spring meeting.
Meanwhile, Yearwood consulted the finance committee and moved to reallocate funds from our reserves to cover the outstanding debt. Board members were then informed of the finance committees decision that $230,000 be moved from our reserves we didn't touch our restricted or scholarship accounts to cover the outstanding obligations. Within the month, all of our outstanding debts had been paid.
Currently, let me be clear that NABJ is financially sound and has strong, positive balances and cash flow leading into the convention. The ship is back on course.
Last month, we hired an outside, independent auditing firm McGladrey & Pullen to go through the data and conduct a complete audit of our 2005 financials. We expect to have those results in mid-July, will post them to the Members-only section of the Web site our 2004 audit is already posted there and will have them available at the business meeting in Indianapolis.
At the spring meeting, the board also approved several recommendations from the treasurer and finance committee to tighten up NABJ's financial policies and procedures. Among them were:
Changing the reporting structure so the accountant reports both to the executive director AND to the president or treasurer. That way, the accountant is more likely to come to the leadership with problems or opportunities well before they become major issues, without fearing his or her job is on the line.
Change the policy on who can sign major contracts to require signatures of both the executive director AND the president or treasurer for any contracts over $10,000. Before, our operating procedures allowed that the executive director could sign for all contracts on his or her own.
Require that the president or treasurer approve all executive director expenses, and that the treasurer sign off on the presidents expenses.
Require the approval in advance of both the executive director AND the president or treasurer rather than just the executive director if any regional conference, workshop, training or other event exceeds the budgeted amount of a specific program or activity.
In addition, we are also looking at making several other changes in the way we handle NABJ's business when Wynn Freeman takes over in a few weeks:
Clarifying line items and categories in the budget so that they more clearly reflect what the item is for. Now, for instance, the Media Institute budget category contains everything from student services to professional training.
Look at our staffing when it comes to who handles basic bookkeeping functions, hiring if necessary someone with those skills.
Require all credit card charges be reconciled and submitted for approval within 30 days of receipt of the bill.
Require all wire transfers, online and telephone payments be approved in advance by the president or treasurer.
Require individual revenue and expenditure statements/reports on individual events such as galas, regionals, conventions and Media Institute events within 30 days of the event, with the final report in 60 days.
Conduct a review of all NABJ contractual obligations.
While this was a difficult process to go through, I feel confident we took the right action at the right time in the right way. And now were back on track.
Although we still may not be able to answer every question because of legal and personnel concerns, we will have a full presentation of the details and the audit at the business meeting, set for 9:30 a.m., Thursday, Aug. 17, at the convention.
Meanwhile, feel free to e-mail me directly at bryan@nabj.org. Better yet, call me at (408) 938-0281 if you want to talk more about this or anything else regarding NABJ.
As always, I am here in your service,
Bryan Monroe
NABJ President
2005-2007
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