June 24, 2016 ‘Mrs. Deena Hayes ~ Greene, Chairman of the Board Mr. John Swaine, Chief Executive Officer International Civil Rights Center & Museum 134 South Elm Street Greensboro, NC 27401 Dear Deena and John, Pursuant to the terms and conditions outlined in our August 19, 2014 loan agreement, the City of Greensboro Internal Audit Division has completed a review of the International Civil Rights Center and Museum (ICRCM) records and documents to determine the amount of the $1.5 million loan that can be forgiven by the City (see attached report from the internal Audit Division). Based on the findings of the review, | am pleased to report that the City will be able to forgive $612,510 of the loan. This total credit will be applied to the first $750,000 installment provided to the ICRCM on October 25, 2013 and, will leave an outstanding balance due to the City of $137,490 (plus 2% annual interest since date of first installment of $7,498.43). The balance of $144,988.43 is due and payable to the City on June 30, 2016. In addition to balance due for the initial loan installment, the ICRCM will also be required to pay the City an additional $500,000 (plus 2% annual interest from date of second installment of $25,444.76) on February 20, 2017 and, $250,000 (plus 2% annual interest from date of third installment of $12,722.38) on February 17, 2018. This leaves a current outstanding balance owed to the City at $887,490 (plus 2% annual interest based on dates of loan installments of $45,665.57 for a current total principal and Interest amount due to the City of $933,155.57). On another matter, the City would also like to request a written update from the ICRCM on the status of the tax credit structure completion and, the status of the put/call and collateral assignments as outlined inour agreement. To follow-up, please provide us with a copy of your proposed lozn repayment plan and requested tax credit information as soon as possible (and no later than Friday, July 22, 2016) Sincerely, Nn “r Vas Borreynrne Nancy Vaughan, Mayor Jim Westmoreland, P.E., City Manager City of Greensboro City of Greensboro Attachment (Civil Rights Museum/Loan Offset Report - Internal Audit Division) PO BOX 3136 - GREENSBORO NC 27402-3136 » WWW.GREENSBORO-NC.GOV + 336-373-CITY (2489)GREENSBORO DATE: June 17, 2016 Jim Westmoreland, City Manager FROM: Internal Audit Division SUBJECT: Civil Rights Museum / Loan Offset (Written Response Required by July 1, 2016) ‘The Internal Audit Division has completed our review of the Civil Rights Museum’s Financial Records/Documents as requested by the City Manager’s Office. This review involved the analysis of items provided to us by the Intemational Civil Rights Center & Museum (ICRCM). The purpose of this review is to verify eligible allowable net funds raised by the entity outside the normal course of business for the period of September 3, 2013 to July 1, 2015 to “Offset” the Loan provided by the City of Greensboro as forgivable amounts as outlined in the Executed Agreement dated August 19, 2014 “Item 15 — Offset Rights of Borrower”. (See Attached Agreement Executed August 19, 2014) ‘This entity is also known as “Sit-In Movement, Incorporated and Affiliated Entities”. The affiliated entities include: Civil Rights Museum, LLC; International Civil Rights Center and Museum, LLC; ‘Museum Landlord, LLC; and Museum Tenant, LLC. Alll of these entities are related parties that were formed in order to facilitate the development of the Museum at 132-134 South Elm Street in Greensboro, NC. ‘On October 22, 2013, The City of Greensboro approved a $1,500,000 forgivable loan to Sit-n- ‘Movement, Incorporated (Borrower) provided that a dollar for dollar match is raised over the course of the three (3) year period, 2013-2015, Borrower will assign to the City a security interest in the real property located at 134 South Elm Street, Greensboro, North Carolina, The purpose of the Loan is to provide operating support and development of the business located at 134 South Elm Street, Greensboro, North Carolina (the “Business”) for the International Civil Rights Center and Museum, Incorporated with the objectives of (1) satisfying debt requirements; (2) retaining existing jobs; and (3) maintaining utilities of the Business. Further, it is understood that the Project will have until July 1, 2015 to raise $1,500,000 in matching (vet) funds from rental and fundraising activities to ensure that the liability to the City is fully forgiven. The City holds two (2) board level seats as a result of the above loan arrangement. We were originally provided a spreadsheet by Mr. John Swaine, Chief Executive Officer on September 16, 2015 showing funds raised in the amount of $1,271,669.52. At the start of our review date, March 16, 2016, we were provided an updated spreadsheet by Ms. Cassandra Garner, ‘Accounting Assistent showing funds raised in the amount $1,266,745.26 (Our Starting Point) which PO BOX 3136 - GREENSBORO NC 27402-3136 - WWW.GREENSBORO-NC.GOV - 336-373-CITY (2489)‘GREENSBORO is $4,924.26 less than the original document. We attempted to verify the latter amount as outlined below. ‘We reviewed the following eleven (11) items and reported amounts to determine the amount eligible for Loan Offset: 1. GOLF $44,056 We reviewed the documentation for the Net Funds Raised (Revenues of $56,656 less Expenses of $12,600) for the Golf Tournament in the amount of $44,056. We noted two items as follows: there ‘was a $2,500 contribution from Food Lion that was recorded as July 1, 2015. The deposit ticket from the bank was dated July 3, 2015. The check was dated July 1, 2015. There was a $500 item from Rental Works recorded as revenue. There was no documentation from the vendor to support this item. It was noted that this was the donation of chairs for the golf event. RECOMMENDATION We recommend based on the two exceptions above the Golf Revenue should be reduced by $3,000 to ‘make the net amount for offset equal to $41,056. 2. GALA $132,392 ‘The Gala is an annual banquet held by ICRCM in order to help raise funds via donations. We reviewed the documentation for the Net Funds Raised (Revenues of $251,440.31 less Expenses of $119,048.55) for the Gala in the amount of $132,391.76. For the period January 1, 2015 through July 1, 2015, the museum included a credit of $5,000 for Gala Expenses from the Sheraton Greensboro that should not have been deducted. RECOMMENDATION ‘We recommend that based on the exception above the expenses should be increased by $5,000 making the net amount raised for offset credit equal to $127,392. 3. SPECIAL PROGRAMS $15,808 Special Programs relate to particular events and exhibits that are at the Museum for a limited amount of time. Examples include plays, concerts, and art exhibits. Some programs are free to the public, while other events cost money to attend, During the period of September 3, 2013 to July 1, 2015, ICRCM reported $10,017.82 of funds raised from Special Programs. On the updated Schedule of Matching Funds given to us by the ICRCM staff, we identified an amount recorded in December of 2013 as a debit of $2,895. Upon further review, the amount should have been a credit. This changes the amount reported by the Museum for funds raised to $15,807.34. ut of the thirty-one transactions that compose the $15,807.34, seven transacti made from individuals. ‘These seven transactions total $670.00. The remai are payments twenty-four PO BOX 3136» GREENSBORO NC 27402-3136 » WWW.GREENSBORO-NC,GOV » 336-373-CITY (2489)‘GREENSBORO transactions totaling $15,137.34 are journal entries made to allocate revenue and expenses from the Civil Rights Museum, LLC to Sit-In Movement, Inc. These transactions represent operating revenue and expenses incurred through the day to day activities; for example admissions, gift shop sales, touts, utilities, etc, and are not eligible for offset. According to Number 15 entitled “Offset Rights of Borrower” listed under the Agreement section of the contract is states, “.. the obligation of Borrower under this Agreement and Note shall be offset by the amount of net funds of Borrower and Sub- Tenant, raised outside the normal course of business.” RECOMMENDATION ‘Based on the loan agreement and the nature of the allocations made, the majority of the $15,807.34 reported during the period of September 3, 2013 to July 1, 2015 is not eligible for offset because the ‘majority of the transactions are from day to day activities and do not represent funds raised outside the normal course of business or new fundraising. In summary, of the $15,807.34 reported by the ICRCM for offset, $15,137.34 is not allowed for offset; leaving $670.00 as net funds raised by Special Programs and eligible for offset. There were no expenses reported during the period under review. 4. 1960 SOCIETY $49,036 ‘The 1960 Society is a support campaign for the International Civil Rights Center and Museum. The program is made up of citizens and orgenizations that pledge annual support for the Museum's operations. In becoming a member of the 1960 Society, there are certain benefits that members receive depending upon the amount of money pledged. ‘These benefits range from free admission and complementary tickets to the Museum to priority invitations, reservations, and seating at special events and activities. In addition, there is payment options for members to pay their pledges depending upon the amount of money pledged. For amounts pledged from $1,000 to $2,499, the member has the option of paying over a three year period. For pledges that are greater than $2,500, ‘members have the option to pay over a three to five year period. During the period of September 3, 2013 to July 1, 2015, ICRCM reported $49,035.70 of funds raised from the 1960 Society and $10,968.39 of fund raising expenses attributable to the 1960 Society. ‘The majority of money received during the period of review was for pledges made in the past where members had taken the option to pay their pledges over a three year period or the three to five year period offered by the Museum. This was determined by the Invoice Date listed on the member's Payment Form. These dates ranged from November 2, 2009 — January 14, 2014; with the majority of Invoice Dates occurring in 2010. For example, a $200.00 payment was received on September 23, 2013 (within the offset period); however, the Invoice Date on the Payment Form is January 16, 2010, which indicates a pledge made in the past. The majority of the transactions is like the example above and is not eligible for offset. According to Number | entitled “Definitions” listed under the Agreement section of the contract dated August 19, 2014, “Fundraising” means the activities that PO BOX 3136 « GREENSBORO NC 27402-3136 - WWW.GREENSBORO-NC.GOV » 336-373-CITY (2489) a(GREENSBORO directly raise money for the Museum and Building, but shall not include; (i) pledges made before June 30, 2013; (i) pledges made that will not be paid in full by July 1, 2015, (ii) admission fees.” We noted one transaction wiere legal services were donated to the Museum. While the legal services donated must be recognized as revenue, the nature of the transaction does not meet the qualifications of funds raised outside of the normal course of business. Legal proceedings are activities that occur in the normal course of business and the legal services would need to be purchased if not provided through the donation, unless the decision was for the entity to represent itself We also noted nine transactions totaling $5.39 ranging from $0.01 to $2.00 in which the transaction memo listed wes “Write Off.” These were included in the funds raised figure reported by the Sit-In Movement. RECOMMENDATION ‘According to the loan agreement and the Invoice Dates of the Payment Forms reviewed and adjusting for the “write off” transactions, the majority of the $49,035.70 received from September 3, 2013 to July 1, 2015 is not eligible for offdet because the majority of the money received is for pledges made before June 30, 2013 and does not represent new fumdraising. In summary, of the $49,035.70 reported by the ICRCM for offset, $41,952.70 is not allowed for offset; leaving $7,083.00 as gross funds raised by the 1960 Society for the period above. When taking the expenses incurred by the 1960 Society of $10,968.39 for the period into consideration, the net funds raised by the 1960 Society is -$3,885.39. In other words, the money spent exceeded the new fundraising that was generated by $3,885.39. Therefore, we do not recommend that any loan-offset credit be provided for this item, 5, RENTALS $70,027 ‘We reviewed the documentation for the Net Funds Raised for Rentals in the amount of $70,207. We were able to see the details of the transactions and the general ledger totals. However, we were not able to verify the credit cards amounts on the Bank Statements due to the fact that all Counter Sales Deposits are combined into one deposit/credit total from the bank for Rentals, Gift Shop Sales and Daily Tours. Also, there is an Account for Discounts in the amount of $30,117 that is not reflected on the spreadsheets provided to us. We fel that this should be categorized as an Expense reducing the Gross Sales of $70,207 to the Net Amount of $40,090. RECOMMENDATION ‘The amount of credit available to reduce the City’s Loan should be in the amount of $40,090. 6. INTEREST FROM FUNDING $456,000 We reviewed the documentation for the Interest Revenue received on the Tax Credit Financing in the amount of $456,500, This was verified without exception, This appears to be ordinary revenue received by the museum which is generated fiom interest earnings associated with the Tax Credit PO BOX 3136 « GREENSBORO NC 27402-3136 » WWW.GREENSBORO-NC.GOV + 336-373-CITY (2489) 4GREENSBORO Agreement/Project. The Project was formed under the laws of the State of North Carolina on June 2, 2009 to rehabilitate and operate a museum and commercial office space located in downtown Greensboro, North Carolina. RECOMMENDATION ce the project was formed in 2009 and the Tax Credit Agreement was executed several years before the City’s Loan Agreement with the museum in 2014 and, since the querterly interest payments represent ordinary revenue received by the museum as part of its normal course of business (and therefore cannot be considered fundraising), we do not recommend that any loan-offset credit be provided for this item. 7. BUILDING AMERICA $12,076 Building a Better America through Core Democratic Values (“Building America”) is a fundraising program to provide educational initiative for social studies students in grades 4, 5, 8 and 11. There ate four (4) key components for which donations to the program are used: 1. Educational Fieldtrips ~ provides funding for 112,000 social studies students from across the state to explore the International Civil Rights Center & Museum’s state of the art 16-pallery experience, The Battlegrounds. 2, Lesson Plans — provides mote than forty (40) lesson plans to reinforce an understanding of core democratic values ~ eg. liberty, right to vote, equal protection under the law, and others ~ conveyed in The Battlegrounds. 3. Teacher Training ~ ICRCM will offer onsite seminars as well as webinar to ensue effective implementation of the lesson plans. 4. Recognition of Support - Donors may help to underwrite admission fees for students. Each firnder’s name will appear on the ICRCM website, the Building a Better America donor wall in the ICRCM’s lobby, and the Annual Report. (Per ICRCM personnel, most donations during the period under review were used to underwrite admission fees for students.) We reviewed the documentation for the Net Funds Raised for Building America in the amount of $12,075.80. On August 31, 2014 a journal entry was made to allocate revenue of $581.30 from ICROM to the Building America program, ICRCM personnel indicated that donations are deposited throughout the month in a donation box located in the ICRCM lobby during business hours. RECOMMENDATION Since the above transaction is comprised of donations made during the normal course of business, we recommend that $581.30 be removed from the reported total of $12,075.80; which makes the allowable amount from Building America program equal to $11,494.50. There were no expenses related to the program. 8, INDIVIDUAL GIFTS $103,926 PO BOX 3136 + GREENSBORO NC 27402-3136 « WWW.GREENSBORO-NC.GOV - 336-373-CITY (2489) 5‘GREENSBORO Individual Gifts are received by ICRCM in numerous ways (e.g., in person, by mail, in the donation ‘box, on-line, etc.) We reviewed the documentation for the Net Funds Reised for Individual Gifts in the amount of $103,951.20. There were several exceptions to this amount. (A) There was a $123.00 donation made by check where the donor denoted “General Designation 2012 Campaign” under the description column of the check stub. Section 1 of the written loan agreement dated August 19, 2014 (effective as of October 22, 2013) defines “fundraising” as: the activities that directly raise money for the Museum and the Building, but shall not include; (pledges made before June 30, 2013; (i)pledges ‘made that will not be paid in full by July 1, 2015; (tl) admission fees.” (B) There were eighteen transactions totaling $10,235.71 where journal entries were made to reallocate revenue from ICRM’s depository account to the individual donations account. ICRCM personnel indicated that donations are deposited throughout the month in a donation box located in the ICRCM lobby during business hours. This appears to be outside the normal course of business. (© We also noted three (3) individual donations totaling $994.21 where the documentation attached noted that the transaction was collected from the donation box. RECOMMENDATION Since these transactions are comprised of donations made during the normal course of business, we recommend that $11,352.92 be removed from the total of $103,951.20; which makes the adjusted net amount eligible for offset from individual gifts $92,598.28. There were no expenditures reported during the period under review. 9. CORPORATE GIFTS $166,713 We reviewed the documentation for Corporate Gifts in the amount of $166,713. We agreed amounts pper the spreadsheet to deposit slips, bank statements or credit card merchant email receipts to verify amounts. $100,000 of this amount was noted as “forgiveness of oan debt” by Carolina Bank in October 2014, We did not see any correspondence from the bank confirming this amount. We were only provided the October and November loan statements and noticed the amount decreased by $100,000, RECOMMENDATION ‘We need to see a confirmation directly from the Bank. 10. DONATIONS IN THE MUSEUM $673 We reviewed two items that comprised Donations in the Museum. We agreed the April 2014 transaction in the amount of $379.05 without exception. The October 2013 transaction was a journal entry of $294,00, We were not provided any documentation for this transaction, PO BOX 3136 - GREENSBORO NC 27402-3136 - WWW.GREENSBORO-NC.GOV + 336-373-CITY (2489) ‘GREENSBORO RECOMMENDATION ‘We recommend that Donations amount should be reduced to $379 as the allowable amount for offset credit. 11. GRANTS $232,117 We reviewed the documentation for the Net Funds Raised for Grants in the amount of $232,117. ‘These appear to be within the timeframe of the agreement without exception. RECOMMENDATION None. Please see a summary of the above analysis located in Attachment A. We also received a summary from the Museum regarding all items mentioned above (See Attachment B). However, we have not been provided any additional documentation regarding this summary that would warrant us changing our report. In summary, based on our observations and the Executed Agreement dated August 19, 2014, we recommend that the amount of Offset Credit for the City’s Loan be in the amount of $612,510. ‘We would like to thank Mr. John Swaine, CEO and Ms. Cassandra Garner, Accounting Assistant for the ICRCM for their courtesy and cooperation to us during this review. Please provide a written response to the Internal Audit Division by July 1, 2016. Please contact us with any questions that you may have, 4. Keto tye Kew Mickey Kerans Ryan Kildoo Internal Auditor Internal Auditor Tira ZZ Tina McKoy Garland Wells Internal Auditor Intemal Auditor PO BOX 3136 » GREENSBORO NC 27402-3136 - WWW.GREENSBORO-NC.GOV + 336-373-CITY (2489) 7soz /s2/s uojsita pny jeusoyuy Aq pasedoug wa 3 aTaeT 3 FEURT 5 STVIOL LIVeEe 7 $ LIVeez $s LIVeEe $ SINVYD 1 LE $ €L9 $ €L9 s OAS HHL NI SNOLLYNOd “01 €1L'99 $ E1L‘991 $s €1L‘991 $ SLHWO ALVUOTUOD 6 865°C6 s TS6'EOT s 976"E01 s ‘SLdID TVNGLAIGNE ‘8 S6vTL $ 940% $ 9L0'C s Vora ONICTING L $ oos‘9sy $ ous‘9sr s ONIGNDA WOW STAINED 060°0r $ LZO'OL s LEO'OL s STV.INEY Ss $ 980°6r $ 980°6r $ ALHIOOS 0961 - oL9 s 308‘sT s sT0OT $ SWYvwOOd TYIORdS: € WELZ s ‘TOETEL $s WETEL $ vivo % 9S0'lr s 980 $ 9s0ry s a0. T INIONV FHVROTIV INDOWV OSTWIA INTONV IHSHSGVEEES SINTOOOV ARVININNS 13530 NVOT- WN3SNIN SLHORE AID ‘VINSNFOVILYMay 31,2016 ATTACHMENT B Good Evening Mr. Lucas, ‘There are a couple of Matters to be address in the draft report as follows: ‘A. Instead of Civil Rights Museum or Intemational Civil Rights Center & Museum, the draft document should read “Sit-In Movement Inc”. This is the entity that entered into a transaction with the City. B. We actually agreed to “Fund Raising”, not “net funds”, as stated in the first paragraph. C. In the fourth paragraph, itis important to note that the match was to be within the period of release. ([had raised the point with the City that the last disbursement of $250,000 ‘was outside of the matching period.) This was to have been corrected before the contract was finalized in 2014, D. Third Paragraph, Please change title to CEO on September 16, 2015. E. Please adjust title for Ms. Gamer, as Accounting Assistant. She is not an employee of the organization, only a contracted assistant. 1.0 Golf - According to my records, $2,500 check from Food Lion was delivered to the Museum, after the banking time. It is common for receive checks in advance of the dates; because, many of us set the dates ahead of the mailing time, Regarding the $500 that was provided by rental works, this was the fair market value of the donated tents and other equipment that were donated for the golf tournament. ‘There was a corresponding deduction on the expense side as well. ‘The net effect is “0” because this is an in-kind donation. Recommendation ~ Leave the funds raised as reported $41,056, 2.0 GALA - Please correct the “January 1, 2015” date to reflect September 3, 2013 thru July 1, 2015; as this was the period of fund-raising for the three fundraising events. In looking at the review by the City, there are insufficient details provided on the $5,000 credit. (Please forward the detail of what is being referred to at this point. The only $5,000 transaction that is to be deducted was one for a deposit dated 12/14/2014, totally within the fund-raising period. Please keep in mind, that fundraising for the January 2015 Gala started as early as May and June of 2014 and expenses are being paid in advance for certain bookings. Recommendation ~ Leave the funds raised as reported, $132,392, are reported. 3.0 Special Programs - Each month special program revenues that are posted on Civil Rights ‘museum’s general ledger is reclassified over to Sit-In Movement’s ledger via journal entry to account for the special educational revenues raised by the Museum, These funds are posted there because all registers are tied to the Civil Rights GL. Further, Special Programming fund-raising is often by donation, Once financial adjustments are completed, 1 JE is posted tomove these cost to the proper ledger. Included with the end of month transfer/allocations are items like utilities and other expenses that are to be allocated over to the Sit-In Movement general ledger. Its obvious that the December 2013 posting was posted as a debit for special program discounts offered. This is not an error, rather the reclassification of two number from Civil Rights Museum for a net of 1 on Sit-In Movement. These transactions do not reptesent day-to-day operations. They are representative of community partnerships with other non-profit organizations to build a larger community opportunity. Finally, many of these programs of special purposes were designed as a direct result of fund-raising requirements with the City and are far from routine. Recommendation — Leave the funds raised as reported, $10,017.82. 4.0 1960 Society the 1960 Society was a support campaign for the Sit-In Movement Inc. The campaign ended in February 2010, with many of the pledges to be fully paid over 3-5 years. The Charter members had their names posted on the 1960 Society Wall and that was the end of the campaign. Many members choose to renew their pledge commitments for the new campaign which started in 2011 and @ new 2015 February One Society was initiated. The numbers that you have were under the old structure offunds raised. In reviewing the report. There were actually $12,358 in new pledge payments made and received before July 1, 2015. The Museum is on an accrual basis, s0 the old pledges would not show up on the financials as new money. Each month, tran a Cash Basis Summary to show New Pledge payments that were recelved and removed the old pledges that were before the September 2013 date. A three year pledge that had two years paid by July 1, 2015 does qualify for the match, for the funds collected on the pledge during the period and should not, have been totally disallowed. I would suggest that revisiting the details of this particular line. Recommendation ~ Leave the funds raised as reported, $12,358, | would also suggest that the expenses related to this line of fund-raising be prorated with the schedule of funds received over the three year period. Match the expense of $10,968.39 to the funds raised over three years would support the Accounting Principle of Matching. 5.0 Rentals - The $70,027 raised from rentals should not be reduced by the discounts for Jeasing the space. We have offered free and or discounted space to entice other organizations to consider leasing the Museum for special functions and programs. Often, these events generated revenues from tours and Museum Store purchases. Examples of entities that use the building for free, The City of Greensboro, the Police Department, Social Services, DGI, Rotary Club and many other entities with little or no budgets at all for the payment of space. However, in a very direct manner, this was considered marketing the facility to increase revenues for the operations. Therefore, the offset of $30,117 would require the Museum to support community engagement without any support from the City for public engagement. Recommendation — Leave the funds raised as reported, $70,027.6.0 Interest ~ As we have stated before, the funds raised for the Tax Credit Interest is funds raised each quarter as a direct result of our investing, has been agreed previously that this could be counted. | would suggest a revisit of the intent of this particular line for fund-raising. It is not the same as.a pledge; rather, its totally outside of normal course of business ~ rather extraordinary fund-raising that will benefit the entire community for years to come. Recommendation — Leave the funds ralsed as reported, $456,500. 7.0 Building A Better America ~1 would suggest removing the 4 key points, asit will cause confusion in the public, Many of the objectives have already occurred. It simply need to state that this is money raised to serve title vii schools and help to pay admission fees to the Museum. The funds that you are intending to disallow totaling $581.30 is being reduced in error. Customers visiting the Museum learn about the student fundraising program and leave donations in the Museum Shop or contribute funds in the donation box that sits in the Museum Lobby. This donation box that isin the lobby of the Museum is part of our fund-raising efforts and the box was placed there to raise additional funds. When donors make donations at the register or place funds in the box, they will often request a receipt from the Museum, To eliminate the need to have a separate system in place, and to have operations streamlined, all funds collected in the Museum and earmarked, “Donation” are recorded in the Museum Store, deposited in the Civil Rights bank account, and a separate journal entry is posted at the end of the month to move donations, special events, memberships, allocated utilities and shared wages over to Sit-In Movement Inc, the only entity that reports on fund-raising activities in the Museum. Donations are aways made during the normal course ofa business/operating day. Nearly all non-profit organizations, especially museums, receive additional funds in a donation box, as a segment of their standard operations and in the normal course of operations. Recommendation —Leave the funds raised as reported, $12,075.80 8.0 Individual Gifts ~ The donations that you're looking at are donations made during the normal course of an operating day I would not reference this as normal course of business because the downstairs area is Museum store sales and tours predominately # fundralsing activities gave rise to us putting a donation box downstairs to take donations often donors would make donations to the museum in the Museum Store at the end of the month a journal entry would be made and the funds willbe transferred from Civil Rights Museum LLC over to sit-in movement. “2012 Campaign was the Bullding A Better America Project” Ifa guest made a donation for the “2012 Campaign, the question is when was it received? Our records were accounting for information starting September 2013, even though it was a prior campaign. | will need to see the actual documentation. ‘The eighteen transactions were allocations, or movements of funds from the Civil Rights General Ledger over to the Sit-In Movement Ledger. This does not disqualify donations that were made by guest In the Museum Store and had to be reclassified over at the end of the month. This isa normal process for any multi-faceted organization and a standard accounting transaction for an end of month closing.Again, Funds in the Donation Box are a legitimate activity for the Civil Rights Museum. Please keep in mind that Sit-In Movement own Civil Rights Museum 100%, so, related party activities are necessary and essential. Recommendation ~ Leave the funds raised as reported, $103,926 9. Corporate Gifts - A notice from Carolina Bank has been received by the Museum to be reviewed by the city indicating that $100,000 of principle had been waived. Recommendation ~ Leave the funds raised as reported, $166,713 10. Donations in Museum ~The October 2013 transaction was a journal entry of $294. The Back-up should be on the general ledger for Civil Rights Museum. It s more than likely transfer of revenue from Civil Rights Museum reclassified over to Sit-In Movement. End of Month Allocation. Backup is available to substantiate the claim for the fund amount of $673, Recommendation ~ Leave the funds raised as reported, $673 14, Grants—No exceptions