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Update: Board Still 'Ablaze' Over Funding Allegations

Former ASNC member Meredith McKenzie responds to claims from ex-Treasurer.

remains at odds over a review of last year's spending by new Treasurer Judy Knapton, which alleges that more than $10,000 in funds were spent without the council's knowledge.

Council member Joseph Riser and Treasurer Mark Legassie have disputed Knapton's findings, saying that a majority of the funds identified in the report do not need to be authorized by the council, as they fall under the broad banners of outreach and operations.

Knapton's report was discussed by the council during a to respond to an ongoing Department of Neighborhood Empowerment (DONE) audit of the ASNC's 2010/2011 finances.

Knapton's report attempted to square ASNC's purchase card expenditures as listed on the DONE website with board authorizations from meeting minutes.

Knapton's report can be downloaded from the media box on the right.

Riser called Knapton's report "misleading," arguing that it missed at least one $1,500 animal welfare expenditure that was approved by the board in April.

A copy of the April minutes which show the authorization of the funds can be downloaded from the box on the right.

Riser also argued that many of the expenditures listed in Knapton's report—such as food for public meetings, postage to mail outreach materials and office supplies--did not actually require board authorizations.

DONE General Manager Bonghwan Kim agreed with Riser's assessment, saying that treasurer's are allowed to use city issued purchase cards to make expenditures within the realm of operations and outreach, as long as they do not overspend approved budgets

“It would be improbable for the board to authorize every single transaction,” Kim said. “As long as board's are not overspending line items, they are within the law.”

However, Kim also told Patch that councils should reconcile those expenditures on a monthly basis--a practice Legassie admits the ASNC has not followed.

He said DONE's treasurer's handbook calls for quarterly reconciliations, though he also admitted that Fiscal Year 2010/2011's 4th quarter expenditures have never been reconciled due to the fact that he was on vacation during June's meeting.

Outreach Expenditures Questioned

Since Saturday's meeting, board President Martha Benedict has notified Patch of three expenditures made by Legassie in May of 2011 without council authorization totaling more than $1,500, which she believes fall out of the purview of day to day operations.

Those expenditures include $589.54 to U.S. Impressions on May 25 for sticky notes, $367.05 to U.S. Impressions on May 26 for green key-chains and $551.05 to Keychains.biz on May 27 for more green key-chains.

Kim—who admitted he had only be briefed on the ASNC audit—told Patch that the types of expenditures made by Legassie in May likely should have been authorized by the council first.

“It's hard to say without looking at the document; I don't want to say they are incorrect or outside the bounds, but those kinds of expenditure probably fall under the purview of needing to be authorized by the board,” Kim said.

Further, Benedict argued that the keychains—which were emblazoned with the logo for a disaster training group called LASurvival.org and distributed by Legassie during June's Lummis Day Festival—were not legitimate outreach expenditures, as they did not promote the board.

“Mark was not registering new ASNC members at his disaster booth at the Lummis Festival. He was signing people up for his disaster project,” Benedict said. “...I don’t believe these were ASNC outreach expenses and we did not approve $1508.19 to be spent for such items that I can find in the minutes. And they do not strike me as “ordinary expenditures.”

She also alleged noted that the purchases came after a May 23 meeting, during which Legassie told the board that DONE had frozen neighborhood councils' rollover funds, leaving them with only $85.

A copy of May's minutes can be found here.

“Given that Mark had stated days before in a public meeting May 23 that the ASNC had no money to spend and had to cancel existing projects, it seems unlikely he can make a persuasive argument that it was OK for him to spend yet more money on something new,” Benedict said. “Money was approved for the Lummis Day event, which came a few days later, but the money allocated for it was spent elsewhere. Mark’s spending was not an ASNC outreach expenditure because what he purchased did not promote the ASNC.”

Legassie, though, argued that L.A. Survival was a project of the ASNC's Public Safety Committee, and was designed to spur interest in the neighborhood council.

“The whistle and flashlight gave credit and acknowledgement indirectly to ASNC through [L.A. Survival], a new website put together by the ASNC Public Safety Committee's Disaster Survival Task Force,” Legassie said. “The purpose of this website is to create a one-stop place for neighborhood councils and communities in Los Angeles to get sample emergency templates and other useful items.  It was part of the proposal we sent to the city's Emergency Management Division which and a vendor to develop a generic disaster preparedness template for the city.”

Legassie said Benedict also misinterpreted his comments, saying he told the board that their accounts would be drawn down to $85 only after all approved funds were expended.

He said there was also a looming June 15 deadline to make expenditures with the city's purchase card before the money would be taken back by the city. Legassie said that's what prompted him to purchase the outreach items shortly after the May 23 meeting.

“The next day [after the May meeting] I started calling up the people who still had approved but unspent funds to check if the funds would be used before losing them. I learned after speaking with fellow board member Meredith McKenzie that she would not have time to use the $2000 allocated for community outreach materials such as tri-folds,” Legassie said. “Our next board meeting was not until the end of June, and there was no way to schedule a special meeting in time with quorum before June 15, so I purchased outreach items at the end of May  for use at Lummis Day, upcoming CERT drills, and exercises.   They included post-it notes, rechargeable flashlights, and safety whistles.”

McKenzie, who no longer sits on the board, could not be reached to confirm her conversation with Legassie.

Update:

McKenzie told Patch that she never gave Legassie the go-ahed to expend outreach funds.

"Mark never called me after the May 23 meeting and said we don't have enough money, what do you want to do?" McKenzie said.

Instead, McKenzie said that after the May 23 meeting, she conferred with Benedict about expending the outreach funds on advertising in local publications  before the P-Card accounts were frozen.

"In order to spend what we had to spend, we decided to advertise in some local publications. We wanted to get them booked and placed before June 1, so they could be paid for before P-card deadline," McKenzie said. "Only conversation [Mr. Legassie and I] had was to communicate how much had to be spent.

Legassie had “no history of impropriety”

Riser said that Legassie's history should have negated the need for DONE's audit. Legassie had served as DONE's treasurer for two-and-a-half years, Riser said.

“There has never been any question of impropriety with Mark,” Riser said. “He had a great relationship with DONE--they held him up as a "prize" treasurer and invited him to join a special task force of a half dozen or so-- just a year go. They called his budget survey a neighborhood council 'best practice' and sent copies to all 95 neighborhood councils across the city, saying 'this is how to involve stakeholders in the process.' So if they had questions, why didn't they call him, and just say, "Hey Mark, we found some problems... maybe you got some things confused. Let's talk!  Instead they invited people who were not aware of the specifics, who then made some very bad guesses, missed some things, and set a neighborhood council ablaze."

But Benedict said that DONE's audit was spurred by Legassie's unwillingness to cooperate by failing to hand over financial records to Knapton.

“When it became apparent that the previous Treasurer would not comply with requests to convey his records to the new Treasurer, DONE staff suggested Judy Knapton and I visit their office and pick up copies of theirs,” Benedict said. “We went to the DONE office on October 20. The DONE staff members told us they had already determined there were 'irregularities' and advised us to not act on any spending requests in the areas of animal welfare, public safety and outreach.”

Rob Schraff December 15, 2011 at 09:27 PM
Why is Mr. Riser working so hard to rationalize on Mr. Legassie's behalf? Surely if it so simple, Mr. Legassie could just come forward with the records and an explanation, but he seems to have repeatedly refused. And, there seems to be more than a disputed $1500 sloshing about, given the ASNC's sloppy and easily manipulated "budget survey" process, backed by committee votes with no records against budget line-items like animal welfare and public safety. It will be interesting to see if DONE will take any further action now that the ASNC board has basically agreed that "errors were made." And what about the ASNC president's signature that seems to have magically appeared on Mr. Legassie's reconciliation reports to DONE?
Joe Walker December 15, 2011 at 10:54 PM
I will be more than happy to hold the jackets of these strong personalities as they tear each other apart. Meanwhile, what is being done to find those two shih-tzu's that escaped from their yard and for which the largest search in Glassell Park history is being made? Call out the National Guard! Set up checkpoints at all major intersections! : )
Nimby pimp December 16, 2011 at 04:56 AM
The squabbling of these would be neighborhood potentates recalls a comment made by Jorge Luis Borges' when he compared the Falklands/Malvinas War to "two bald men fighting over a comb."
Rob Schraff December 16, 2011 at 05:34 AM
Yes, but at least we get to see what's been getting swept under "the rug."
Nimby pimp December 16, 2011 at 06:30 AM
Shih-tzu hair toupees anyone?
Josie Roth December 16, 2011 at 03:11 PM
Unbelievably petty. It must be a political power grab.
ChickenBoyFan December 16, 2011 at 03:59 PM
Cluck Cluck...lol
ChickenBoyFan December 16, 2011 at 04:05 PM
For the most part, NC meetings I've attended are made up of 10% of board members who actually DO anything, and 90% of people who must not have had enough attention as a child, and need to hear themselves speaking/and or (blowharding).
JosephR December 16, 2011 at 04:29 PM
As the ASNC Outreach Chair for the fiscal year before (2009-10), I think I can address the disconnect between what Mark and Meredith have said here, although not what they discussed in phone calls months ago. Meredith, having received Board approval for the ads months earlier, but having never prepared or vetted them with the Board, could call for any remaining Outreach funds to be used for those purchases, and apparently did. (The purchase card reconciliations show that they were made, within that same time frame). As the outreach chair she could recommend purchases -- depending on their nature -- either to the Board, or to the treasurer. Only in those two ways can they be approved. Mark as the treasurer was also authorized to make certain outreach expenditures on his own, or at the request of any other committee or boardmember, as long as they stayed within budget (see BH Kim's response to this story). He also did also, and stayed within budget. Obviously he needed no "go-ahead" from the outreach chair to use any remaining funds - which at this point could only have been used for outreach, and would have been shortly lost.
JosephR December 16, 2011 at 04:40 PM
I should append, for the bigger picture... Last year the ASNC had two different outreach chairs (and also was without one for many months). Of the approx. $10K budgeted for outreach, the first chair requested and spent zero (0) dollars, and the second (Meredith) requested board approval for something like $2,200, and spent about half -- the rest not being completed while funds were available. The balance of outreach funds were requested by other board members and other committees, and most were authorized and paid for by the treasurer under his bylaws authority.
Alberto December 16, 2011 at 05:20 PM
At least they're speaking. It's quite another thing to attend some Board meetings and hear almost no discussions at all, no questions, no follow-up ... just an assembly-line of "Ayes".
Martha Benedict December 16, 2011 at 06:19 PM
Alice, to clarify, what Meredith was saying was that Mark did not call her after the meeting. He told her during the May 23 meeting that he canceled her funding for the outreach material she had been working on, an ASNC newsletter and a brochure which the board had approved. He did not phone her the next day to discuss it with her. The Treasurer does not have the authority to withdraw funds from a board approved project without the board's consent. But that's what happened. Then in the next few days, Mark purchased $1500 worth of keychains and sticky notes to give out at the Lummis Festival in his disaster booth which had no ASNC promotions displayed on it. Petty? Yes, and characteristic of the lack of transparency during the ASNC's last fiscal year.
KingSlav December 16, 2011 at 06:45 PM
Why not just make all the financial records open to the public? This is after all a neighborhood council.
Martha Benedict December 16, 2011 at 06:56 PM
A few days after the May 23 meeting, Meredith may have called Mark--which had been approved by the board months before--about how she was spending the advertising part of her allotment. He had already withdrawn the money for the board-approved ASNC brochure and newsletter. I find an email dated May 25, 2011 in which I recounted the ad plan to Mark. Meredith may have called me, actually, and I sent the details to Mark in an email.
Alberto December 16, 2011 at 07:00 PM
@Martha Benedict: Actually, what Meredith is quoted as saying in the article just above these comments is NOT that say anything at all about what occurred at the meeting (which should be, if it's about cancelling a pre-approved project like you suggest, recorded in the minutes*) but only states that: "after the May 23 meeting, she conferred with Benedict about expending the outreach funds on advertising in local publications" She goes on to say, "In order to spend what we had to spend, we decided to advertise in some local publications..." Clearly that's not what he did but you speaking for her does not clarify anything any further. In fact, if it went down the way you say and he cancelled a project at the meeting, how did you and the Board respond to that? Again, this should be in the minutes. ...at least, it should be in MacKenzie's own account. It seems by your "lack of transparency" claim that you've got something against Legassie but, so far, it doesn't seem to have been stated plainly. Actually, it leads credence to the assertion that someone on the Board (esp. someone who felt Legassie was bad at his role or just bad) approached DONE. That would be fine, proper even, but that someone should be forthcoming about it so other egos can just get over it. (*I haven't served on NCs but have served 5 years as Executive Assistant and sat in on Board meetings twice a month and recorded all minutes for every meeting.)
JosephR December 16, 2011 at 07:22 PM
"$1500 worth of keychains and sticky notes to give out at the Lummis Festival in his disaster booth which had no ASNC promotions displayed on it." Correcting that record, too: nearly $600 of that was for the sticky notes, which did indeed have a large ASNC logo as the main graphic element. I have one on my desk right now. That leaves just over $900, which could only have been spent on outreach (Mark contending this was ASNC Public Safety Committee outreach, and by all accounts would have been swept away one week after the event.
Martha Benedict December 16, 2011 at 07:52 PM
@Albert, thanks for your interest in the details. The recounting gets confusing. From ASNC April 2011 final minutes: 1. Annual Newsletter (Outreach) - $1,000. Motion approved 14 Ayes, 0 Nays, 0 Abstentions. 2. Advertisements, Banners & News Stories (Outreach) $1,500 for 6 months. Amendment approved: 14 Ayes, 0 Nays, 0 Abstentions. 3. Trifold Brochures & Mini-Posters (Outreach) $1,000. Motion approved: 13 Ayes, 0 Nays, 1 Abstention. Only the advertising part squeaked through at the end of the fiscal year.
Meredith McKenzie December 16, 2011 at 08:04 PM
I resent being dragged into this fray by erronenous comments attributed to me. The Patch's quote is essentially correct but without context; Martha Benedict's comment is correct. The ASNC Communications & Outreach Committee Minutes of 4/23/2011 and the ASNC Board minutes of 4/25/2011 accurately reflect the board approved funds for the Communications & Outreach Committee. The 4/25/2011 board minutes reflect the following: 'Mark Legassie reported that the treasury had enough funds to cover all project requests on the agenda with approximately $3,700 left after these requests are approved.' At the 5/23/2011 ASNC meeting, Mark Legassie, without any prior communication to me or any other project committee members who had approved funding, announced that because we could not use our carry-over funds from the previous year, there was no funding for Communications & Outreach approved projects totalling $5,000. After significant board discussion and compromise, it was agreed that the Treasurer could re-allocate some unspent funds from other projects for Communications & Outreach committee approved items. From this compromise, Martha Benedict coordinated with Mark Legassie and me so that my committee received only $1,313 out of $3,500 approved for advertising/brochures/newsletter which was used for advertising. Mark Legassie never discussed with me that he was moving forward with purchasing the 'approved' PA system item for $1,500.
Meredith McKenzie December 16, 2011 at 08:18 PM
I might add that this statement from Joe Riser is completely erroneous: 'Meredith, having received Board approval for the ads months earlier, but having never prepared or vetted them with the Board, could call for any remaining Outreach funds to be used for those purchases, and apparently did'. The funding request for Communications and Outreach during my chairmanship came before the ASNC Board on 4/25/2011. I don't understand why Mr. Riser would make his assertion since he was in attendance at our committee meeting on 4/23/2011
Meredith McKenzie December 16, 2011 at 08:19 PM
For the record, ASNC's fiscal year ended June 30, 2011, and all P-card expenditures were to be charged by 6/15/2011.
JosephR December 16, 2011 at 08:20 PM
Ahh, Meredith. I'm sorry you were dragged back in as well. I hope you're well. But, if Mark was going to move funds from one budget category to another -- to cover approved outreach projects -- it would have required a full board vote, and should have appeared in the minutes you prepared. Otherwise -- it's like it never happened. And it becomes "he said" - "she said" - which is where we all are. The minutes say nothing like any of this, least of all a board vote affecting the budget. They do seem to say that the fate of outreach projects was left dangling at meeting's end.
JosephR December 16, 2011 at 08:25 PM
I am guilty sometimes of mixing up punctuation, which leads to misunderstanding. I did not mean to imply that that the ad "funds" were not approved in April. Instead, that the ads themselves were never shown to the board (a diffferent point I should have made in a different sentence). If you did actually show ad copy to the board and it was approved, I apologize. I don't recall seeing them. You absolutely did get approval for the funds.
Alberto December 16, 2011 at 08:55 PM
You should resent it! It's good to get clarification from the person herself. I thought we were talking about key-chains and sticky notes but, whatever, Ms. MacKenzi provides details And context. I have been, in the past, directed to strike words from draft minutes that illustrated disagreement and that the fact that something passed after compromise. I felt it was important to document how a decision was reached but was overruled for fear that it was too intimate for auditors who, in general, don't care. This can make minutes tricky when hunting for specifics. This seems to be an example of that: Minutes say, "Board approved x & y" when actually it seems was, "Board learned x was unavailable due to z and couldn't cover n associated with y and so, after wrenching of garments and gnashing of teeth, the Board approved new x and a compromised y." Really, this is the NCs issue and something they have to work out with DONE - which they are doing. That members are generous enough to respond to these threads is exceptional but, also, can be more troublesome for them: we all weigh in w/o context and w/o a stake in the game. Clearly this Board was not spared issues that plague many boards and we just get to look at the process. So far, I don't think anyone is saying (save Rob, I think) that anyone actually meant harm. I'd just encourage member to keep cool 'cause, yes, the public is now watching (though probably still won't show up to help later).
David Fonseca (Editor) December 16, 2011 at 09:09 PM
Hi King, give me a few moments. I rustle up a link to DONE's account of all ASNC expenditures for 2009/2010. You'll have to go to ASNC's website for the minutes to cross-check. Knapton's report already did this work, but if you're so inclined, you can do it again on your own.
Michael H December 17, 2011 at 03:29 PM
seems that the more power we turn to politicians and wannabes.. the more they take. i guess it's true, power corrupts. i'm with chickenboyfan. we did just fine for many years (s without the neighborhood councils. now we have a new layer of people to rip us off. just give the fed, state and city and now neighborhood pols your atm password and call it a day.

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