Controversy surrounds rejected grant

November 28, 2012 11:25:03 AM

Carmen K. Sisson - [email protected]


The city school board recently rejected a $75,000 grant intended to fund a dropout prevention program, but the project is still underway, despite concerns some board members have raised about the circumstances surrounding the grant and the feasibility of maintaining the program in future years if the district is required to foot the bill.  


The Walmart Foundation grant was rejected at the Nov. 15 board meeting when a motion by board member Glenn Lautzenhiser failed to receive a second, killing all subsequent discussion. But technically, the district has already accepted the money, according to documents obtained by The Dispatch following a Freedom of Information Act request. 


Superintendent Dr. Martha Liddell, who spearheaded the Project 2020 dropout prevention program and has spent the past year and a half promoting it, confirmed Tuesday night that the check, dated June 2, 2012, was deposited into CMSD's bank account before the vote and without board members' approval -- a violation of standard protocol.  


Liddell denied depositing the check or authorizing its deposit, saying "that was an action that was not taken by me" and adding that she works "at the pleasure of the school board" and will abide by their final decision. 


"Where we are with the situation is that those funds are already in the custody of the district, and those funds will remain in the custody of the district until the school board decides definitively how they want this handled," Liddell said. "It's not really that they did not accept it at the last school board meeting -- that is absolutely fine. The school board is continuing to have conversations with themselves regarding that matter, and as soon as that is finalized, as superintendent, I will make sure their wishes are followed." 


Both Lautzenhiser and Board President Tommy Prude said after the Nov. 15 meeting that they would have voted to accept the funds, but board members Currie Fisher, Jason Spears and Aubra Turner have not disclosed their opinions, referring all questions to Prude.  


After the board meeting, Prude said he believed board members may have rejected the donation because of legal implications and concern over accepting a donation that was not directly awarded to the district.  




'Something is not right' 


The controversy over the grant centers, in part, over how it was obtained. The Walmart Foundation requires all grant proposals to be submitted online, but Liddell said when she attempted to enter the school district's tax identification number, the system rejected it.  


She said Walmart Foundation officials suggested a "flow-through grant," using an eligible 501(c)(3) nonprofit organization to serve as the go-between, a common practice for entities that want funding but are not eligible. 


So the district "partnered" with Ginomai Ministries, a local nonprofit operated by Genesis Church Pastor Darren Leach.  


The grant -- along with the $75,000 check -- was issued to Ginomai, and Leach provided a Sept. 26, 2012 letter to the board stating that "it was determined by an official representing the Walmart Foundation that the school district could contact a local nonprofit and request they provide access to their 501(c)(3) TIN (tax identification number) in order for the district to complete the online application submission process. My organization agreed to provide Ginomai Ministries' TIN to help the school district complete the online application process." 


In the letter, Leach remitted the $75,000 to the district "via a check that has been deposited into the district's bank account for use by the fiscal agent and in compliance with funding requirements from the Walmart Foundation." 


Liddell said "flow-through" grants are common among educational institutions, but "you're not really talking about any kind of official partnership." 


But a Walmart official, speaking Tuesday on the condition of anonymity, said he believes the district may have misunderstood what they were told.  


"I know for a fact that we may have suggested they partner with a 501(c)(3), but we wouldn't have advised them to just find a tax identification number," he said. "Obviously if the school district feels they can't approve it, we would take it back and look for another worthy district to fund. But something is not right there." 




Differing definitions 


Part of the problem may lie in differing opinions of what a partnership entails.  


Liddell noted partnerships the district has with Mississippi University for Women and East Mississippi Community College.  


"It simply means that those entities support the mission that you're trying to accomplish and they simply say if there's anything (they) can do to help with that, then (they) are willing to do so," she said. "Basically, you look at it as, 'I believe that dropout prevention is important to our city and our state, and anything I can do to help with that, I will be willing to do. So when you look at that, if they are a 501(c)(3) and they're willing to be a flow-through for you, then you use their 501(c)(3) (tax identification number), which was absolutely fine with the (Walmart) Foundation, because I called and asked them prior to doing it and, actually, they were the ones who made the recommendation." 


But she failed to elaborate on ways Ginomai Ministries might assist CMSD with Project 2020 and said she does not know if the ministry, or Genesis Church, has applied to be one of three community "e-centers," which will be paid to provide space for the program and its students. She also said she has "no idea" about the ministries' relationship to Genesis. 


Other questions remain about Ginomai Ministries, which was created by Leach on Sept. 5, 2008 and is listed in good standing with the Mississippi Secretary of State's office.  


Internal Revenue Service records indicate the organization had its tax-exemption status automatically revoked May 15, 2011, with a revocation posting date of June 11, 2012. Leach has not been available for comment.  


According to the Walmart Foundation's state giving guidelines, only organizations with a current tax-exempt status are eligible to apply for a grant. The organization must be listed in the most current IRS 50 State Master File at the time the application is submitted.  


CMSD's project proposal was submitted -- using Ginomai Ministries' tax identification number -- on Feb. 13, 2012.

Carmen K. Sisson is the former news editor at The Dispatch.