USACA’s 501 (C) (3) Status And Its Obligations

By Sam Sooppersaud
An OnDriveUpdate.com editorial captioned A humble request to USACA Treasurer John Thickett and dated August 25, 2011 read as follows, “In 2008 Mr. Thickett was elected treasurer on the back of some lofty ideals and promises.” He was quoted as saying, “We must be open and honest.”

The Editorial continues as follows, “But, as we look to new elections in October, some are questioning whether these promises were kept by USACA. Thickett’s contentious appointment to the LLC board, while holding on to the position of USACA treasurer, is increasingly looked upon as a conflict of interest, and has reignited the debate of openness and honesty. Whatever little information is leaked out of USACA continues to suggest that important financial decisions on the future of USA cricket are being made by a handpicked few of Dainty loyalists. These decisions are being made with an eye on the October elections, and are done without the participation of the full board, several board members told Ondriveupdate. This has reinforced the long-held perception that USACA is run by a good old boy’s club”.

Ondrive asked the Treasurer to share with the USA Cricket stakeholders, information on several issues of concern: possible conflicts of interest, openness and honesty, improper governance, alleged exclusion of certain board members from board meetings, and other important points or questions. To-date I have not seen a reply from Mr. Thickett to the points raised by Ondriveupdate.

Organizations that enjoy a 501 (c) (3) (tax free) status have certain obligations, legal and otherwise, to the IRS and the membership of those organizations. Below I will endeavor to state some of these obligations.

Governing Body
The IRS encourages an active and engaged board believing that it is important to the success of an organization, and to its compliance with applicable tax law requirements.  Governing boards should be comprised of persons who are informed and active in overseeing an organization’s operations and finances. If a governing board tolerates a climate of secrecy or neglect, we are concerned that assets are more likely to be diverted to benefit private interests of insiders at the expense of the public. (In this case, the stakeholders of USA cricket).

Conflict of Interest
The directors of a 501 (c) (3) organization owe it a duty of loyalty. The duty of loyalty requires a director to act in the best interest of the entity rather than in the personal interest of said director or some other person in the organization. In particular, the duty of loyalty requires the director to avoid conflicts of interest that are detrimental to the organization. Many charities (organizations) have adopted a written conflict of interest policy to address potential conflicts of interest involving their directors, trustees, officers, and other employees.

The IRS encourages a charity’s (organization’s) board of directors to adopt and regularly evaluate a written conflicts of interest policy that requires directors and staff to act solely in the interest of the charity (organization) without regard for personal interests. This includes written procedures for determining whether a relationship, financial interest, or business affiliation results in a conflict of interest, and prescribes a course of action in the event a conflict of interest is identified.

The public expects a charity (organization) to abide by ethical standards that promotes the public good.  The organization’s governing body bears the ultimate responsibility for setting ethical standards and ensuring they permeate the organization and inform of its practices.

The IRS encourages a charity’s (organization’s) board of trustees to consider adopting and regularly evaluating a code of ethics that describes behavior it wants to encourage and behavior it wants to discourage. A code of ethics will serve to communicate and further a strong culture of legal compliance and ethical integrity to all persons associated with the organization.

The question being asked by many is this, “…is the USACA Board doing what the IRS suggests”?  Ondrive has alleged that some board members are excluded from board meetings. Ondrive further alleges that selective board members are invited to meetings and important decisions are being made. If this is so, then it is detrimental to the purpose of the organization.

Does the USACA Board have a written code of ethics?  Are board members being held to high ethical standards? Sadly, from allegations coming from many corners, the USACA board, as a whole, does not function in a manner that is conducive to the public’s interests.

The USACA Treasurer has his duties as prescribes in the organization’s constitution. His duties are spelled out. He is also a board member of Cricket Holdings America, LLC, the financial arm of USA Cricket.  Is he in a potential conflict of interest dilemma? To be honest, I cannot for sure give you a definitive answer.  I am aware of his duties as the USACA Treasurer.  I have not seen the constitution or corporate documents which describes what each officer does on the LLC board. So to say that the USACA Treasurer is, or may be in a position of conflict of interest, be presumptuous on my part.

I would feel that the best person to analyze this possible conflict of interest situation is the Treasures himself, failing which the USACA board of directors. He knows what he is required to do in his capacity as USACA’s Treasurer. He also knows what is required of him as a director of the LLC. Let him do the analysis. If he is truly convinced that a conflict of interest scenario exists and is apparent, then as a true cricket fan he should resign one of his appointments.

In other news reports, it is alleged that the USACA board has not met in a face-to-face meeting since November 2010, which begs the question, “Are the board members informed of the financial transactions and other financial issues relating to USACA, during the past ten months?” Clearly, as a Treasurer entrusted with managing the funds of a 501 (c) (3) organization, such information should not only be shared with the rest of the board, but also with the general public. The USACA web site has been down for quite some time now, so there is no way for the public to access any information published by the organization.
Such circumstances raise several questions, all pertaining to transparency, or the lack thereof, and the potential for conflicts of interest, in the governance of USA Cricket.

I am sure, like my readers, I too anxiously await an answer from USACA’s Treasurer to Ondriveupdate’s questions and my queries.

The views expressed here are those of the contributor, and do not necessarily reflect those of www.newyorkcricket.com