Request For Clarification Of NIGP Chief Exec’s Expenses, Solicits A Slower Response Than Expected by Jon Hansen

Posted on May 2, 2015


“In recent years, actual and perceived abuses in the area of executive expenses and “perks” have been among the leading causes of stricter federal tax laws governing nonprofit organizations and greater scrutiny by the Internal Revenue Service of the practices of nonprofit organizations in the United States. Many organizations struggle with this area of compliance.” – Inadequately Documented Executive Expenses — What’s the Harm? by Michael M. Lee and Michael E. Batts, Batts, Morrison, Wales & Lee CPAs

Beyond any issues surrounding NIGP Chief Executive Rick Grimm’s compensation in 2013, there have been numerous questions raised regarding his expenses.

While anonymous sources continue to make references to extravagant VIP dinners, as well as other examples of avarice, I have decided to initially focus my investigation on the organization’s somewhat ambiguous reference in the FY13 990 Return that “The Chief Executive Officer is permitted to travel with companions from time to time.”

Earlier today, I sent the following e-mail to Executive Director – Finance & Administration Tina Borger requesting additional information:

Good Afternoon Ms. Borger:

Once again, thank you again for sending me the requested information.

As a matter of clarification relating to the FY13 return, and more specifically the statement “Part 1, Line 1a: The Chief Executive Officer is permitted to travel with companions from time to time”, can you please provide the following information:

  • For the reporting year in question how many of these trips were taken?
  • What were the purposes for each trip?
  • What was the nature of the relationship in each of those instances when Mr. Grimm was accompanied by a companion re was it a personal and/or business companion?
  • What role did said companion play in terms of the purpose of the trip?
  • What was the combined total cost for all trips for the reporting year?
  • Finally, can you provide an expense account for each trip taken during the reporting year?

Over above any and all trips relating to the “Part 1, Line 1a” reference, were there any other trips?

Thank you again for your assistance.

While I received confirmation that my e-mail was read (and again I cannot confirm that it was Ms. Borger who actually read it), I was somewhat disappointed that I did not receive at least a reply indicating that they would look into making said records available.

Given the fact that in my post referencing the 2013 Charity Navigator study, it appears that Mr. Grimm’s compensation is between $80 to $100K above the industry average when compared to the pay of CEOs with similar-type organizations, this is surprising.

If I were a member of the NIGP board, which according to the Nonprofit Risk Management Center is responsible for establishing and maintaining proper governance policies relating to compensation for chief staff officers and key senior staff, travel expenditures and general financial management policies, including financial controls, I would certainly want to comply with this kind of request as quickly as possible.

Especially with the FY13 990 Return’s reference to The Chief Executive Officer being “permitted to travel with companions from time to time” being so vague.  This can’t help but raise questions regarding the board’s vigilance relating to its duties.

To what degree can Directors such as Jack Adger (CPPO, CPPB), Joan E. Graham (CPPO, CPPB), Keith Ashby (CPPO), Bill Lindsey (CPPO, C.P.M.), Michael E. Bevis (JD), George M. Nader, Jr. (CPPO), Ronald W. Blendermann (CPPO, CPPB), Nelson S. Park (CPPO, CPPB), Lisa Buitenhuis (C.P.P., CSCMP) and Charles H. Smith, Jr. (CPPO, CPPB, GCPA) be held accountable for not only Mr. Grimm’s compensation, but overall expenses – including travel?

As an interesting aside, there are also suggestions that the NIGP #CodeGate scandal has started to raise serious questions about the overall state of the public sector procurement profession. This includes the validity of the certification process including designations such as CPPO.

In my January 23rd, 2015 post “The Face of Procurement’s Generation Next“, I made reference to the observations of Dr. Robert Handfield and Gerard Chick, who talk about the “definite and definitive chasm between purchasing people of the past, and today’s strategic procurement professionals“.  Specifically, the emergence of a new generation of procurement professionals with college degrees and 4.0 grade averages, who are already having a significant impact on the industry and the business world in general.  You cannot help but wonder how the NIGP #CodeGate scandal will affect their view of not only the NIGP, but all other associations as well.

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Whatever the expense reports – if provided – reveal, in conjunction with the findings from my ongoing investigation into other troubling issues such as the Periscope relationship with the NIGP, it is this latter consideration that reminds me of an earlier “Gate” scandal, and the words of an apologetic President.

In his interview with David Frost, Richard Nixon lamented “I let down our system of government, the dreams of all those young people that ought to get into government but will think it’s all too corrupt and the rest.”

When everything is said and done, will this be the lasting legacy of Rick Grimm, the NIGP board and the NIGP itself?

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