The Dallas County Community College District Foundation spent $12,000 on a rug, tens of thousands of dollars on fresh flowers, extravagant restaurants and lots of alcohol. What did that have to do with education? That is what Fox 4 wanted to know.
Fox 4 got a tip the foundation was not just spending money on education but employee perks and other questionable purchases.
The foundation is a small nonprofit that urges donors to step it up because "tax revenues are decreasing" and the "state budget is in crisis." It promises a gift "will transform lives."
Fox wondered then why the foundation was spending money on things like orchids.
It is not just the economy, but education taking center stage during this election year.
"We should be doing everything we can to put higher education within reach for every American," President Barack Obama said recently.
So what are North Texans doing to contribute?
Every year donors are shelling out more than $2 million to the Dallas County Community College District Foundation. It is a nonprofit that provides scholarships and supports faculty development.
On a Monday afternoon, Fox 4 recorded foundation staffers not at work. They were dining at the Atrium Café, an upscale restaurant at the Dallas Museum of Art. Fox 4 didn't see any high profile donors with them. It appeared to be just staff.
After poring through two years of credit card bills and expense reports, it is clear this group likes to eat, especially Foundation President Betheny Reid. Reid's $153,000 salary is paid for with taxpayer dollars.
Reid dines at restaurants all over town. Courting donors? Not according to her own accounting.
A $71 receipt from Lucky's Cafe says she was "brainstorming" with 3 of her staffers.
A $36 tab at Pappasitos has a mystery guest. It says Reid dined with question mark.
There are lots of receipts that say, "projects." And many give no business purpose at all, like a lunch receipt with Kathye Hammontree. Tax dollars pay her salary as well.
Other days, it appears they are just hungry. A $42 tab at Cedar's Social was labeled just, "lunch." A $39 Atrium Café bill with staffers was also "lunch."
"Those entities who get that money from the public domain have an extra duty to administer that money properly," said James Smith, a certified public accountant. Smith is the past chair of the Texas Society of Certified Public Accountants.
Smith says nonprofits have to be especially prudent. Receipts should always state who attended the business lunch and the business purpose. But that would be for out of town travel or taking donors out, not staff.
"Two employees going out to have lunch with each other and charging that back to the employer as some kind of a reimbursable expense is uncommon and unusual and generally does not meet the Internal Revenue Service's test," Smith said. "The foundation would be providing a fringe benefit that would be taxable to the employee."
On June 23, 2010, it was breakfast at La Joya with college employees followed by lunch at the Atrium Café with staff.
Fox 4 found a $188 tab for "Luis Farewell." Fox is assuming that is a going away lunch for someone named Luis. Another farewell for Alisha at Hatties and another one for Melody Morris.
We also find lots of expenses on the American Express credit card where no receipt is submitted so we have no idea who was eating or the purpose of the meal.
"Every single year we get a thumbs up, an A+," said Betheny Reid, Foundation President.
Reid says auditors and the board have signed off on all of these kinds of expenses.
"Do you have to go to lunch to brainstorm?" said Becky Oliver.
"Yes, sometimes that is the only time during the day that I have time to meet with my staff," said Reid.
"Why aren't you having these meeting in this lovely board room," said Oliver.
"We do," said Reid.
"I think most people would question why a woman who makes $153,000 a year needs to charge somebody else for her lunch," said Oliver.
"I pay for a lot of people's lunches personally as well," said Reid.
The foundation also spends thousands of dollars for catering on breakfast meetings and lunches, employee recognition, holiday parties for staff, even Halloween pizza. The foundation catered food in to, "discuss sports," and catered lunch in one day because of, "rain."
"Rain, general kind of weather conditions, no," said Smith
Smith says the IRS states catering food is for the convenience of the employer. It is for special projects or over time, not for rainy days.
"We are sorry you are going to get a little wet going to your car but that is your problem, not ours," said Smith.
And this is a thirsty bunch as well. Fox 4 found alcohol on local restaurant bills as well as out-of-town receipts.
Almost $100 was spent on alcohol at the Meyerson Symphony Center and more than $1,200 at Sigels.
Alcohol was even served at student dinner. It is not clear who was drinking.
"The non profit foundation exists to pay for those expenditures that cannot be paid for by college district fund," said Reid.
"And alcohol is a good use of foundation money?" said Oliver.
"You know that is a small expenditure," said Reid.
The foundation also picks up the tab for the Chancellor's City Club membership and expenses. That was more than $10,000 and pricey dinners for the college presidents. The grand total for just food and drinks adds up to more than $100,000 for just more than two years.
We also found a $3,000 Christmas tree and furniture for the lobby including a $7,000 Credenza, $4,000 for two chairs and $12,000 for a rug.
"A private individual had given the money to the non profit foundation so we could go out and buy that furnishing so it could be a true district headquarters," said Reid.
"Taxpayers should be frustrated," said Michael Sullivan, President of Texans for Fiscal Responsibility.
"When you see that $12,000 lying on the floor, you think to yourself, what kind of class could have been offered next semester," Sullivan said.
The foundation also spends $25,000 each year for fresh orchids. Sullivan questions even if that is what donors want, does it make any sense.
"You can get nice looking, fake orchids from an arts and crafts store that will look pleasant to someone walking by," Sullivan said. "It cheats the students and it cheats the donors."
"We have to do what the donor wants," Reid said.
"And the donor wants orchids?" said Oliver
"Yes, they do," Reid said.
Tell that to students like Heather Jennings. She is a single mom paying her way through college.
"Flowers, really?" Jennings said. "So we are not getting put through college because they want to pay for flowers?"
"I think it should be investigated," said student Josh Stefanick. "There are people working hard who have families and kids, and need that money."
The foundation has spent $125,000 on flowers over the past five years. That is enough money to pay for tuition, books and supplies for 41 students to attend community college for one year.
Reid told Fox 4 the foundation is recognized for being one of the best run foundations in the country and the chancellor, Dr. Wright Lassiter, says it is ranked 7th nationally among community college foundations. When Fox 4 asked for the source of that information, the foundation pointed us to the Council for Aid to Education, but that organization told us it does not even rank colleges or foundations. It collects fundraising data mostly from individual colleges and it has no list for district foundations in Texas.