Government

GO Cedar Rapids trying to restore confidence after 'newbo evolve,' board says

The main stage for musical acts at “newbo evolve” undergoes last-minute preparations Aug. 2 before the festival opened the next day. (The Gazette)
The main stage for musical acts at “newbo evolve” undergoes last-minute preparations Aug. 2 before the festival opened the next day. (The Gazette)

CEDAR RAPIDS — The board of directors for GO Cedar Rapids, the area’s tourism bureau, continues to distance itself from responsibility in the handling of “newbo evolve,” a first-time festival that lost $2.3 million, and said in a statement Thursday the organization is taking steps toward “restoring the confidence of the community.”

The board vowed changes to improve oversight of the nonprofit, while also noting that directors are volunteers dedicated to fulfilling the mission of the organization, which is to promote the region as a premier destination for travel, tourism and events.

“(W) e remain unified and committed to providing our unwavering support to staff, vendors and others, and ensuring that GO Cedar Rapids emerges a stronger, more accountable organization,” the statement read.

The board continues to blame former chief executive Aaron McCreight, who was fired shortly after the Aug. 3-5 festival. Board leaders say McCreight misled them by providing inaccurate numbers for tickets sales, sponsorships and spending.

“Clearly, the members of the board operated in good faith and placed too much trust in previous leadership, who did not make proper and prudent decisions in managing the event,” Thursday’s statement read. “We are taking all necessary steps to resolve this matter and have put in place immediate measures to ensure the concerns of all involved parties are addressed.”

McCreight provided information to the board verbally, and there is no indication the board sought documents to corroborate it.

Last Sunday, The Gazette reported an expert in the operation of nonprofits stressed directors need to ask probing questions, especially considering the financial risk.

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“Saying they got bad information says they didn’t do enough to get their own information,” said Daniel Borochoff, president of Charity Watch, a Chicago-based watchdog in the nonprofit sector.

Many vendors who worked during the festival have yet to receive payment from the organization. On Wednesday, the board said it intentionally recalled $300,000 in checks that were written to vendors to avoid overdrawing its account and to meet a deadline to repay a loan from Bankers Trust. GO Cedar Rapids board chairman John Myers said the board is committed to repaying all the money owed to the bank and vendors.

Among the improvements it said it was making to foster community trust, the board noted the hiring of Jim Haddad as interim chief executive, conducting a financial audit and establishing new policies.

Nonprofits with an annual budget topping $1 million should have an audit done yearly, according to Paul Thelen, director of the Larned A. Waterman Iowa Nonprofit Resource Center at the University of Iowa, who also was quoted last Sunday in The Gazette. GO Cedar Rapids has said it does a financial compilation each year, but hasn’t been audited recently.

The board also is forming a new committee structure to have greater oversight to strengthen governance and management of the organization, according to the statement. The board and staff will continue to seek ways to best serve community partners, the statement read.

l Comments: (319) 398-8310; brian.morelli@thegazette.com

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