Soccer organization leaders say they now have financial controls
By Bj Lewis
Published: 21 November 2015 11:27 PM
Officials from Denton’s local nonprofit youth soccer organization are working to remain in compliance with tax laws and procedures concerning its status as a tax-exempt nonprofit.
Denton Soccer Association has had some problems in recent years due to a lack of proper financial controls and proper tax form filings, according to Kevin Stout, the association’s treasurer. Those problems resulted the loss of its nonprofit status, but current members of the board insist things have been fixed and the organization is running smoothly again.
“I was elected in May. I was new to the board at that time, [and] when I walked in I had no idea what issues there were,” Stout said. “I know that there was concern that there were unaccounted funds.”
One issue was clear at that time: The Internal Revenue Service had revoked DSA’s status as a 501(c)(3) tax-exempt company.
Federal tax exemption for a nonprofit organization is automatically revoked for failure to file a Form 990 for three consecutive years, according to the IRS. Form 990 is a nonprofit’s annual tax return. In exchange for tax-exempt status, nonprofits must make their annual 990 open to the public for inspection.
According to IRS documents, DSA’s status was revoked Jan. 14, 2014.
Denton soccer officials received a letter dated Sept. 3 of this year that stated DSA’s nonprofit status was reinstated. According to IRS officials, there is a Form 990 on file dated August 2014.
DSA officials have not provided the Denton Record-Chronicle with a requested copy of their most recent filed Form 990.
According to the compliance guide for 501(c)(3) public charities, “a public charity must make available for public inspection its annual information return, Form 990 series, with schedules, attachments, and supporting documents filed with the IRS.”
According to the DSA constitution, the primary purpose of the organization is to foster and advance the sport of soccer for young persons under 19 years of age to promote sportsmanship, honesty, loyalty and courage through organized athletic competition, and to educate participants in the North Texas State Soccer Association and the United States Youth Soccer Association.
Earlier this year, DSA board members had concerns over possible mismanagement of funds. After discussing them as a board, members took the issues to the North Texas State Soccer Association to review. According to its mission statement, the state association exists to promote, foster and advance the cause of soccer for youth and adults within its territory. The state association is to educate, provide administrative service, promote and stimulate interest in the game.
The review did not find anything unusual or missing, according to David Messersmith, executive director of the Frisco-based NTSSA.
“They did find that [the DSA] did not have some controls in place to account for the cash transactions,” he said. “[We] suggested to that board that they might want to consider getting a treasurer who was an accountant by trade or CPA to look at their statements on a regular basis.”
But, according to Messersmith, all the state agency can do is offer advice.
“We’re a parent organization only in the aspect that local associations register their players with us,” he said. “Each one is a separate 501(c)(3) organization responsible for its own activity. We don’t have any oversight over how they run their business — they can take our advice or not.”
Ashley Holt, current vice president of the DSA board, acknowledged there had been mismanagement.
“We definitely want the record set straight,” she said. “No one bought any Gucci bags or anything like that, and we have tried to fix the mismanagement so there is no more missing money.”
But Melissa Vardis, a former DSA board vice president, says otherwise.
Vardis was removed from her elected position and booted from the organization in October. She filed a report with the Denton Police Department on Nov. 14, alleging that in excess of $100,000 in DSA funds remain unaccounted for.
Officer Ryan Grelle, a Denton police spokesman, said there was not suitable evidence to investigate wrongdoing.
Vardis said she wants to hold the DSA’s board and staff accountable for the problems, which go back several years. She said the organization did not file the required Form 990s with the IRS for the years 2011-14.
Stout was surprised by Vardis’ decision to file a police report because she was no longer on the DSA board.
“The very people making the complaint sat there for a year and didn’t do anything,” Stout said. “If you saw these things, why didn’t you fix them?”
Vardis has claimed that she has financial records indicating money management issues, but Stout said he doubts Vardis possesses accurate financial data about DSA.
“The data is the same data they had. It’s no different than what he submitted to the CPA to get our 2014 taxes done,” Vardis replied. “The validity is it came straight from the books he and [other staff] looked at.”
Nonetheless, Vardis said she has filed a 25-page formal complaint about the DSA operations to the North Texas State Soccer Association.
“Denton needs a soccer association that can be run with transparency — that’s what it boils down to,” she said.
Stout said there is no vast conspiracy to how the DSA is run, in times of financial troubles or now.
“You had a group of people in 2012 to 2014 trying to do the best they could,” Stout said. “And there was room for improvement, and those improvements have been made.”
BJ LEWIS can be reached at 940-566-6875 and via Twitter at @BjLewisDRC.