Zurik: Food, gas, entertainment expenses weigh down NOMTN

Zurik: Food, gas, entertainment expenses weigh down NOMTN

NEW ORLEANS (WVUE) - A local CPA thinks the legislative auditor and the New Orleans inspector general need to investigate a local non-profit. It follows his review of findings we dug up in our latest "Swiped" investigation.

We arrive at a board meeting of the New Orleans Multicultural Tourism Network, hoping to schedule an on-camera interview with its president, Toni Rice.

"I'm not interested in doing an on-camera interview," she tells us. "I'm not interested."

We still have questions for Rice, whose non-profit gets around $500,000 of public money, your money, every year.

Patrick Lynch has questions, too. This certified public accountant has been digging into numbers since Gerald Ford's presidency in the 70's.

"Yeah, I've been around," he jokes.

Lynch says Rice's reluctance to speak with us raises his antenna.

"I believe if you've got nothing to hide, you hide nothing," he says. "And I'm a fraud investigator, so this gives me a lot of pause."

Toni Rice makes about $80,000 a year running the Multicultural Tourism Network - a private non-profit tasked with attracting minority tourists and conventions.

A thorough review of the non-profit's records leaves the longtime CPA concerned.

"Where is the board of directors' oversight?" he asks. "There is none."

Records show Rice traveled to Miami in July 2014 for the International Multicultural Conference. There, she used the non-profit's credit card four times at the pool bar - a total charge of $137.81. Rice also charged an additional $90 at the hotel's main bar and rented two pool lounge chairs.

"How do you justify that as a business expense?" Lynch asks.

Receipts show Rice made that trip with one other adult and a 10-year-old child.

Before the conference in Miami, she made two charges at the Crowne Plaza in Orlando. In Orlando, she charged $511 to 'IOA ADMI'. A quick search on the internet reveals that may be associated with Universal Studios.

"I came up with 'Universal Studios' Island of Adventures' Admission," Lynch recalls.

The taxpayers paid for a theme park trip – just one of a long list of questionable purchases.

"Dillard's, Michael, Kreux du Brew Coffee, Best Buy, Enterprise Rental, Walmart, Rosetta Stone," Lynch reads from that list. "Walgreens, Kingfish, Home Depot, Martin Wine Cellar, Second Wine, CV Linens, Wendy's, Michael's, PJ's Coffee, Winn Dixie, Popeye's…"

These are purchases with nothing that shows why taxpayers needed to foot the bill, what public function they serve.

We reviewed three years of credit card statements, almost 1,400 purchases. We asked Rice for copies of the back-up receipts. But she produced only 57 such receipts, for about four percent of all purchases.

Lynch tells us detailed receipts should have been kept for all the purchases. In fact, the non-profit's auditor said in 2010 that NOMTN needed to start keeping receipts for all credit card purchases, warning of potential fraudulent activities that would not be detected otherwise.

Rice told the auditor they would adopt a credit card policy to address those concerns. That policy states, "All receipts must accompany the employee's expense report. Violations of the agreement could include disciplinary action up to and including termination, and potentially criminal prosecution."

"If you are going to support a charge, you have to have documentation that would address, one, the date of the transaction, where the transaction or purchase occurred, how much, from whom, who was in attendance if there was entertainment, and what was the business purpose of that expenditure," Lynch says. "Otherwise, how do you determine if it's a business expense? Or, is somebody embezzling money, misdirecting assets for personal use?"

In 2012, the auditor criticized Rice for charging gas to the non-profit's credit card, writing, "The Multicultural Tourism Network couldn't determine the portion of gas purchases… that is attributive to personal use."

On July 10, 2013, Rice responded, "Effective immediately, no employees will be allowed to purchase gas with the credit card," and even attached a mileage reimbursement policy.

But she continued to charge gas on the card. In 2014, she charged $2,000 in gas to the non-profit; in 2015, $600 - dozens of those gas charges at stations in St. Charles Parish, where Rice lives. Once again, Rice appeared to ignore the auditor. And no one's done anything about it.

In three years, Rice rented cars in the New Orleans area 11 different times, including an $1,100 rental in LaPlace, $1,000 in New Orleans and $500 in Kenner.

"She's rented automobiles from Enterprise throughout the metropolitan area, Baronne Street and Kenner," Lynch notes. "And the same day, she rented two automobiles from the Kenner location."

Why car rentals in New Orleans?  "I don't know; that's suspect," Lynch responds.

We asked Rice for a list of her business trips. We found three out-of-town stays that didn't match up with that list: a 2014 charge at a Renaissance Hotel in Dallas, a 2015 weekend purchase at a Hyatt in Houston and a Cleveland Hilton in 2016 - each trip with no receipt and no explanation to show why the non-profit needed to pay.

In November of last year, the non-profit booked 12 rooms at the Hilton in New Orleans for a board retreat. The rooms and food at the Hilton cost $2,600.

"They all live, the board, all live in New Orleans," Lynch says. "Why did they need a hotel stay for a one-day meeting?"

That night, they ate at Ruth's Chris, a meal that included three choices of wine, mushrooms stuffed with crab meat, jumbo shrimp cocktail, a choice of steak, chicken or fish, and dessert - part of a $1,000 bill. The non-profit charged an additional $663 at Ruth's Chris that night - all totaled, a one-night board retreat that cost $4358.45.

Since the 90's, a City Council ordinance has dedicated money to the Multicultural Tourism Network every year. Lynch says council should be asking more questions about where this money is going, especially in a city strapped for cash, where every penny counts.

"Half a million dollars certainly would pay for a couple more police officers, may fix a couple more potholes - and we're in need of both," Lynch tells us. "So, why are we wasting a half-million dollars every year?"

The Multicultural Tourism Network's mission is to "identify and promote the cultural diversity of New Orleans and to increase local business opportunities at all levels of the hospitality industry." But, with no documentation to support such purchases of "Phantom of the Opera" tickets, women's clothing, throw pillows and, in about three years, $18,000 of food – there is little to show in terms of service, scant evidence of a public benefit.

"Certainly, from the IRS's perspective, this would not pass muster as documentation," Lynch says.

At the company's board meeting, Rice stood firm against conducting an on-camera interview about how she spends public money.

"I'd be happy to submit a statement but I won't do an on-camera interview," she told us.

Here's the statement she provided to FOX 8:

The mission of the New Orleans Multicultural Tourism Network is to identify and promote the cultural diversity of New Orleans and to increase local business opportunities at all levels of the hospitality industry. In the course of stimulating interest in New Orleans as a multicultural tourism destination, we typically meet with and entertain businesses and clients. Each year, as required by the Louisiana Legislature, we undergo a financial audit to ensure our spending is in compliance with the agency's bylaws which are available online. In the history of the organization, our audits have always been in conformance with the legislative audit criteria.

The non-profit's credit card policy requires all statements and receipts to be kept for seven years. But the Multicultural Tourism Network would only give us credit card records for three years, saying they were no longer in possession of the older records.

EDITOR'S NOTE: This report was originally published with a reference spreadsheet that included erroneous data. While our reporting included the correct data, as uncovered in our investigation, the spreadsheet pointed to incorrect expenditure figures due to a technical error in production. We have updated this report with a corrected reference spreadsheet, with correct expenditure numbers for each expenditure item. We regret the error.

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