The reeling Mateel Community Center got yet another bit of bad news last week, after the California Attorney General’s Registry of Charitable Trusts suspended its registration as a California nonprofit.
The move theoretically prevented the organization — which owns and operates the Mateel, as well as the Summer Arts and Music Festival and Reggae on the River — from conducting any business at all, at least until several years worth of faulty paperwork filed by the organization are corrected.
But board president Garth Epling told the Outpost this afternoon that the organization recently received the Attorney General’s Office’s permission to continue operating while its status is suspended, at least until May 7. That means, Epling said, that a couple of Mateel shows this month — Andre Nickatina and The Crystal Method — could go forward.
“Basically, we are allowed to do everything we do, as far as I can tell,” Epling said, after quoting a new letter from the AG.
But if the organization doesn’t get its act together with the Attorney General’s office by next month, state regulators could ban the Mateel entirely from doing business. That would be devastating news for an organization that is already struggling with a huge debt, which has been exacerbated by the collapse of the Humboldt County marijuana market.
In a letter published in the Times-Standard this morning, Mateel board secretary Anna Rogers told readers that the Attorney General’s office shutdown came after years of the board failed to provide verified audits of its business operations for several years running.
“The reason for the Mateel’s suspension is simple — until relatively recently, we did not know that we were required to have the Mateel’s financial statements audited in any year in which our gross revenue exceeded $2 million,” Rogers wrote.
In fact, though, the attorney general’s office first informed the Mateel of the requirement over two years ago, in January 2016. On that occasion, staff at the Attorney General’s office, informed the Mateel that it needed to file an audit along with its most recent annual report to the office, which covered the year 2014. (See letter here.) The Mateel eventually got that cleared up, but then failed again to provide independent financial audits for the years 2015 and 2016, despite repeated warnings from the AG’s office.
Finally, the office sent a notice of intent to suspend the Mateel’s registration on Feb. 2 of this year unless the problems were rectified. (See here.) The Mateel eventually retained an attorney to help them through their dealings with the AG, but apparently too late — the first record of her correspondence in the official file is dated April 6, after the suspension had already taken effect. (See here.)
Epling acknowledged that the board has been aware of the problem with audits for over two years, and he allowed that two years might sound like more than “relatively recently,” as Rogers wrote. But he said that it’s astoundingly expensive and time-consuming to have an independent auditor review the organization’s books. He said that it took over six months to even find an auditor willing to do the job, and that each audit costs the organization around $10,000. All this at a time when the organization has been struggling just to stave off bankruptcy.