The board of a youth baseball program in Mesa is facing a shake-up over accusations of incomplete bookkeeping and a lack of financial disclosure.
On one side of the controversy is Tim Hensley, a board member of the Superstition Little League and coach who says the league hasn’t kept proper financial records for the past six years — a violation of federal tax laws that require nonprofits to disclose revenue and expenses.
Some of Hensley’s fellow board members are on the other side of the controversy. They said Hensley is abrasive with parents and meddles in the league’s financial affairs. They are holding a special meeting tonight to discuss ousting him from the board.
Hensley sees it as a chance to voice his concerns about not having access to the financial records, which he says are needed to show that donations are being spent the way they were intended.
The nonprofit league, which has 58 teams and roughly 800 participating children, has failed to file federal income tax returns since 1999, the Internal Revenue Service confirmed Wednesday. A large portion of the league’s revenue comes from donations and sponsorships from corporations and local businesses.
Although the group is tax exempt, nonprofits that take in more than $25,000 a year are required to show their balance sheets to the IRS — and to anyone who asks.
The league could face thousands of dollars in fines if the IRS investigates and finds them in violation.
Other East Valley leagues such as Gilbert National Little League, Gilbert American Little League and Red Mountain Little League all have been filing consistently with the IRS, according to tax records.
Fred Lenz, board president of the Superstition Little League, said the league is working to correct any problems, but he refused to provide financial records to the Tribune. He said league treasurer Curt Bailey has asked a local accountant to update the books.
Bailey did not return two phone calls or an e-mail Wednesday.
Tony Rowe, a board member and former league president, said he supports financial transparency. It was only this year, and after Bailey became treasurer, that the board discovered the filings were delinquent, Rowe said.
While Rowe admitted he’s upset at the situation, he said the tax filings are not his biggest concern.
“It’s still low on my priority list,” he said. “If the IRS wants to come after a little league and slap us over the head and call us bad boys, that’s fine, but I have 800 kids playing baseball and I’m providing a quality service.”
In addition, Hensley has accused the league of failing to follow its own bylaws, as well as the guidelines set forth by Little League Baseball.
“I don’t see myself as a whistle-blower,” Hensley said. “I want the truth to be known and I want everyone to be held accountable for the money entrusted to us.”
Some other board members say they share Hensley’s concerns.
“I’d like to say I’m a little more informed than I am,” said board member Randy Redman. “But I don’t feel I’m informed enough as a board member to know the ins and outs of exactly what’s happening.”
A copy of a tax filing for 1999, the last year the league filed, showed the league’s revenue was $46,389.
Illinois-based Land O’Frost is among the biggest donors to the league, having given thousands of dollars in past years.
Tom Rose, director of speciality meats for Land O’Frost, said he was unaware of the league’s financial troubles.
“It’s obviously a concern,” he said. “I think we’ll have to look a lot deeper into it.”