After finishing fourth place in the United States bracket at the Little League World Series last summer, players for New Jersey’s Holbrook baseball team and their parents should be relishing the experience. Instead, the entire experience has been spoiled to a large degree after concerns started growing stemming from the league’s unwillingness to disclose or discuss its finances.
In the months after their World Series appearance, those concerns turned to serious questions. As of Thursday, those serious questions have turned into investigation to be led by the Ocean County Prosecutor’s Office. The investigation comes at the request of Holbrook board member Stewart Bennion, who made some troubling discoveries concerning the league’s finances after president Tony Del Vecchio and treasurer John Lehmann stepped down in January.
It’s a sad situation for a program that produced one of the better stories at Williamsport. Though the team didn’t win it all, they represented the league very well. Clearly better than the league has represented itself. You probably wouldn’t find a parent who didn’t think it was worth putting their lives on hold, or spending between $4,000 to $6,000 of their own money to cover hotel and travel expenses, to be there. But it didn’t hurt knowing that at least some of these expenses were supposed to be reimbursed by the league.
That’s where the issues started.
According to the Asbury Park Press (APP), a delay in the money coming back — each family received $1,600, according to the report — led to questions about whether the league was being straight forward.
Upon learning of the parents concerns, the Asbury Park Press did its own review of Holbrook’s publicly available financial documents. What it found was a league that hasn’t filed a nonprofit tax return with the Internal Revenue Service since the 2013-14 fiscal year. A revelation that threatened to bring the league’s tax-exempt status into question, according to the report.
Beyond that, the league is listed as “non-compliant” with state laws requiring annual financial statements. As for raffles the league has used to raise funds, documents show that Holbrook never obtained a township-issued license to hold one.
Those are just some of the red flags raised by the review, leading the report to say there was no semblance of accountability among the league’s leadership.
Here’s more on the possible ramifications, according to the Asbury Park Press report:
A nonprofit could face punishment from the IRS “as soon as they don’t file an initial return,” said Carol Egan, a certified public accountant with the Cowan, Gunteski & Co. firm in Tinton Falls.
The IRS imposes a $20 per day penalty for each day a nonprofit’s Form 990 is late, up to a maximum $10,000 fine. Those penalties are for each individual return. In Holbrook’s case, the three years of missed returns could mean up to $30,000 in fines for the Little League.
Also, if a nonprofit goes three years without filing their Form 990, the IRS can revoke its tax-exempt status – a death knell for many charities that rely on donations from those seeking the tax write-off.
With the investigation on-going, the remaining league board members are planning to move forward with the 2018 season. “The league needs to move forward. We are paying our bills. We are operating. We are on track right now,” Steve Dubiago told family members at a public meeting on Thursday.
The most important thing here is that the kids have the opportunity to continue playing baseball and softball. Fortunately, it sounds like that will be the case. But this is also a reminder of how important it is to always ask questions and demand answers.
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