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State forces audit on Union Club

Some leaders of Springfield group had fought for full financial accounting.

The state is requiring the Union Club of Springfield to conduct a full audit after a recent snapshot of the charity’s finances raised red flags.

In a letter dated Tuesday from the office of Ohio Attorney General Mike DeWine, the decades-old local institution will have until Jan. 30 to complete an audit.

The Springfield News-Sun reported Tuesday on its website that the Union Club had, with the blessing of Associate Assistant Attorney General Meghan Fowler, submitted a balance sheet prepared by a Springfield accounting firm in lieu of an audit required in the terms of a settlement agreement with the state.

That balance sheet showed the club has $951,732 less than it did at the end of 2011, when it last filed with the IRS. It also showed that $260,479 had been transferred to three non-club accounts the day before DeWine cleaned house with a state-ordered emergency election in February to replace club trustees.

In the new letter to the club’s attorney, Fowler lists those two items among “several areas for concern.”

The club, 139 W. High St., gives away thousands annually in scholarships with money it makes, in part, through one of the five most lucrative tear-off bingo operations in Ohio.

How to get back in the good graces of the state after DeWine’s office earlier this year found alleged violations of fiduciary duties by former trustees and violations of state law at the club, including the operation of slot machines, has pitted new trustees against each other.

“A full audit is all we want,” Robert “Flash” Whitaker, the club’s vice president, reiterated Wednesday.

“I’ve only been in office for five months and this stuff has floored me,” he added. “This is crazy. They seem to want to run the club the same as the old trustees, and we can’t have that.”

Whitaker is among three new trustees who filed a motion to intervene in June to force the club to complete the independent audit required in the settlement.

Dan Harkins, the Springfield attorney representing Whitaker, Harold Pounds and Larry Vince, said Wednesday it hasn’t been decided whether his clients will withdraw their motion now that the state has required an audit.

Harkins did, however, say that the attorney general’s office “instead of demanding accountability has enabled delay.”

Originally, an audit was to have been done by next Tuesday.

In her letter, Fowler explained that she instead agreed to a balance sheet citing the current state of the club’s books, which would have prohibited a full audit within a six-month period. But, she wrote, any red flags would still trigger an audit.

Jerry Numbers, the club’s president, said Wednesday he felt that if they could save thousands by not doing an audit, the community would be better for it.

“It’s a shame you’re spending money when you could be giving it to local charities in Clark County,” Numbers said.

He said there are good explanations for the state’s areas of concern, including the depreciation of property and losses in investments.

The money transferred to non-club accounts the day before the special election was part of a deferred compensation plan established in 2009 for three retired club employees, he said.

“When they moved it the day before the election, it did look funny,” Numbers confessed.

But, he added, “From the looks of it, it was done properly.”

Numbers said he wants the club to move forward.

“Whatever the state wants to do,” he said, “we’re going to do it.”

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