Audit Raises Tough Questions for Freshman California Democrat T.J. Cox

Cox was treasurer of sports nonprofit found to be lacking basic accounting controls

T.J. Cox
T.J. Cox / Getty Images
February 13, 2019

A local audit released by the city of Fresno blistered a community sports nonprofit organization whose treasurer is T.J. Cox, a Democrat newly elected in November to represent California's 21st Congressional District, and someone with an occasionally troubled business past.

The nonprofit in question, the Central Valley Community Sports Foundation, agreed in December 2015 to take over the management of Granite Park, a part of the city the Fresno Bee said had an "unfortunate past" but which was oriented around sporting activities like baseball, softball, volleyball, and running.

CVCSF agreed to invest around $2.7 million in renovations and upgrades, and would also run the day-to-day operations. In return the city would kick in $150,000 annually, slightly more than the city had been paying from its own pocket for annual operations. When CVCSF approached the city and asked for a new installment of $150,000 six months ahead of schedule, government officials asked for an audit, which began in September.

The executive summary portion of the audit released last week noted, "the nonprofit has not established effective procedures for monitoring revenues earned and expenses incurred. CVCSF's bookkeeper described the nonprofit's policies and procedures to be informal and communicated verbally."

Later, the audit said CVCSF had no method for contracting with third-party vendors, could not provide supporting documentation for numerous expense and income items, and essentially could not balance its checkbook.

Finally, the report highlighted questionable loans involving the nonprofit's corporate officers:

In February 2017, two Corporate Officers of CVCSF withdrew $145,140.76 and $75,000 respectively as "loan repayments." However, these withdrawals were made before there was evidence that the individuals had provided any such loans to the non-profit. When Internal Audit questioned CVCSF about the transactions, the bookkeeper explained that the two Corporate Officers of CVCSF had used their own funds to cover some expenses for Granite Park in 2016, but those expenses were not accounted for in the general ledger.

It is unclear whether or not Cox is the "bookkeeper" in the audit, but he is listed as the treasurer on the nonprofit's 2015 IRS form 990, the last and only year that the document is available. The 990 filings can sometimes lag by as much as a year and a half so although exigent circumstances may exist, it is reasonable that the CVCSF's 2016 990 should also now be available.

The 990 also indicates Cox worked an average of two hours a week for the organization, but did not receive income.

The company's president is Terance Frazier, who released the following statement to local media:

"CVCSF is proud of our work to revitalize Granite Park into a state-of-the-art sports facility that has long been forgotten. We took over the park and turned it into a first-class public recreational facility that is used by thousands of residents each month—and at a fraction of the cost to taxpayers to operate and maintain."

Cox did not return a request for comment from the Washington Free Beacon, and does not appear to have provided comment to local media outlets.

A on-air report by KSEE24's Connie Tran in Fresno reached out to all members of the city council, and all declined to comment except for Councilman Miguel Arias, who provided a curious explanation for the findings.

"There's no evidence of mismanagement of money," Arias told KSEE24. "What's clear is that nonprofit organizations use a different accounting system and accounting mechanism than we do in city government."

The audit makes no mention of difficulty between accounting systems and practices. It does say, however, that invoices were not kept, loans sometimes appeared to have been negotiated verbally, and contracts were confusing or nonexistent.

Out of 143 expenses tested, the auditor noted that CVCSF almost never had the correct paperwork, and "[i]n almost every instance, the support provided included a screen print from CVCSF's bank of a payment rather than invoices from vendors.

Even without the request for the annual $150,000 installment from the city ahead of schedule, other problems with the relationship had become evident.

"City officials are mulling whether to break the agreement with Frazier and Cox because of unfilled promises—the restaurant, sports courts, and jogging trails have not been built," the Bee reported five months ago. "The December 2015 agreement called for the restaurant and other amenities to be built within two years."

Although a freshman representative, Cox, 55, is not a newcomer to politics. He previously ran for Congress in 2006 but lost to then-incumbent Republican George Radanovich in California's 19th Congressional District.

Last November, Cox withdrew from the race for the 10th Congressional District, and moved his candidacy to the 21st, where he eventually defeated incumbent Republican representative David Valadao three weeks after election day by a narrow 500 vote margin in what would be the last House race decided from the 2018 vote.

During the campaign, problems from Cox's own business past resurfaced, giving him "other potential vulnerabilities in addition to his address," the Mercury News reported. "In 2015, his own lawyers sued him for not paying his legal bills, and a judge ordered him to pay more than $49,000, including interest, according to Fresno County court records. He later paid the bill."

Published under: California