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January 26, 2013 Published in Schools, Top Stories

Alexandria School Board, Public Continue To Seek Answers About ACPS Educational Foundation

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By Carla Branch
alexandrianews.org

Either Alexandria City Public Schools Superintendent Morton Sherman is ignorant of the process for creating a public charity and Deputy Superintendent Madye Henson is incompetent at maintaining the Internal Revenue Service-mandated files associated with that charity or both are willfully withholding information from the Alexandria School Board and members of the public.

Former School Board Member Scott Newsham requested a copy of IRS Form 1023, the application for nonprofit status and the IRS Letter of Determination, which notifies a charity that it has been granted tax-exempt status, on Dec. 9, 2012. He received a copy of the Letter of Determination granting the Alexandria City Public City Schools (ACPS) Educational Foundation tax-exempt status as a public charity on Dec. 14 but no other requested material at that time. The Letter of Determination was dated Nov. 8, 2012.

The Alexandria School Board requested a number of documents related to the ACPS Educational Foundation on Jan. 10, which were related to an agenda item for the Jan. 24, School Board meeting, and received some of those documents on Jan. 22. However, a number of requested items, including the IRS Form 1023, were missing. When Board members asked about these missing items, Sherman told them that Henson had supplied everything she had related to the Foundation.

On Jan. 24, after seeing that Form 1023 was not one of the agenda documents for that night’s meeting, Newsham sent another request for the form to Henson, reminding her that IRS regulations require public charities to give any member of the public access to the form and a number of associated documents upon request. He highlighted that IRS regulations provide for penalties of $20 per day for failure to provide documents as required. More than 100 pages of documents on the Foundation were distributed to Board members at the meeting when the agenda item on the Foundation was called.  Henson obviously located documents she previously claimed not to have. These documents are now posted on the Electronic School Board public site.

The Board waited 14 days for Sherman and Henson to provide them the documents.  On Jan. 25, 47 days after his initial request, Newsham received a response from Henson’s office advising him that the documents he requested were now available on line.  At $20 per day, that comes to potential penalties of $1220 so far.

Incomplete Information

The documents are confusing and incomplete. Pages are missing from the Form 1023 and other IRS documents. There are also missing pages in documents to and from the Commonwealth of Virginia. On Jan. 12, 2012, the IRS confirmed receipt of the Form 1023 application for nonprofit status and the application fee of $750, but the second page of that document is missing. According to the IRS, the initial submission for 501(c)3 status was rejected because further information was needed. An IRS representative at the agency's call center said that the final request for 501(c)3 status was dated Oct. 23, 2012. None of the correspondence to or from the IRS regarding deficiencies in the original application nor the amended Form 1023 has been provided to the School Board or to the public.

The Form 1023, which was provided, projected that ACPS would provide services or facilities not available to the general public without charge, valued at approximately $61,000 for the Foundation's first fiscal year of operation, July 1, 2011, to June 30, 2012. Documents provided also show various fees paid of over $1000 to the IRS and various Commonwealth of Virginia agencies. No financial data has been available to show who paid these fees.

While the Form 1023 has no actual signature, the typed signature is Henson. Sherman, Henson, Dr. Margee Walsh (an ACPS Executive Director) and Mrs. Yvonne Gorsuch are listed as the founding members of the Foundation Board, with Henson listed as the Board Chair. Since the address listed for Yvonne Gorsuch is former School Board Chair Sheryl Gorsuch’s home address, alexandrianews.org assumes this is a clerical error.

The Form 1023 requires answers to a number of questions including whether members of the charity's Board of Directors have any family or business relationship outside their relationship on the Board. Henson checked “no” on the Form 1023, which she provided, despite the fact that she and Sherman work for ACPS, Sherman is her supervisor and Gorsuch was Sherman's supervisor at the time the document was prepared and submitted. One of the attachments is a draft memorandum of understanding between the Foundation and the Alexandria City Public Schools Board of Education. While the MOU is not signed and appears to be boilerplate, Attachment V to Form 1023 describes an arrangement with the ACPS Board of Education for leased space at no charge to the Foundation.

Misrepresentations

Sherman told members of the School Board that previous Board Chairs and all of the members of the previous Board were aware of and involved in discussions about the Foundation. Board Member Ronnie Campbell, who has been a member of the School Board since 2006, disputed that assertion. None of the approved School Board minutes contain any reference to a discussion of the Foundation nor was any vote ever taken by the School Board endorsing the creation of an educational foundation.

The School Board is seeking legal advice about the Foundation and will hold another public discussion once they have received that advice. alexandrianews.org will request copies of all pertinent ACPS Educational Foundation materials from the IRS and will share them with the public when we receive them.

 

2 Responses to “Alexandria School Board, Public Continue To Seek Answers About ACPS Educational Foundation”

  1. hbrooksva says:

    Looking through the looking glass with Alice, I presume. Sure is curious, and getting curiouser.

  2. Sarah M says:

    Hmmmmmm ...."Pages are missing from the Form 1023 and other IRS documents. There are also missing pages in documents to and from the Commonwealth of Virginia". Anyone remember the missing "18 minutes" of the Nixon Watergate tapes?

    This is not going to end well. The surface has just been scratched and their are already serious red flags about the purpose, legality and set up of this "foundation". The fact that this exact thing was attempted before with Sherman and wound up in court?

    If ACPS doesn't do something about this quickly, they could be dragged into the pit of what could turn out to be federal issues.