The Cape and Islands district attorney’s office announced this week it will not prosecute the Vineyard Trust for altering contractor work quotes, as the non-profit looks to its future after a turbulent summer that saw the resignation of its executive director.

“After a complete review of all investigatory materials submitted to date, we have determined that there is insufficient evidence to support any criminal charges,” DA spokesman Tara Miltimore wrote in an email to the Gazette. “However should any new evidence come to light then the matter will be reconsidered.”

The announcement from the DA comes after the Edgartown and Oak Bluffs police departments referred an investigation to state police regarding altered public funding requests submitted by the Trust for the Old Whaling Church in Edgartown and Flying Horses Carousel in Oak Bluffs earlier this summer.

But the Island non-profit, which owns and maintains 20 historic buildings on Martha’s Vineyard, including the recently-reopened Alley’s General Store in West Tisbury, is still facing issues with its charitable filings as it seeks to restore public confidence.

This week, the state Attorney General’s office disclosed it had issued the Vineyard Trust an out-of-compliance letter after receiving an anonymous tip regarding the organization earlier this year.

“We received an anonymous complaint about this organization in March, and sent them an out of compliance letter thereafter,” a spokesman from the Attorney General’s office wrote in an email to the Gazette. “We’ve been working with them to get them into compliance (we are currently awaiting their 2019 audit and 2020 filings).”

New board chairman John Klein and acting executive director Sally Rorer.

Ray Ewing

New board chairman John Klein and acting executive director Sally Rorer.

Ray Ewing

The Gazette has filed a public records request with the Attorney General’s office for the out-of-compliance letter, and has not received a response.

Vineyard Trust board chairman John Klein, who took over after Patrick Ahearn’s term ended in July, said that the issue related to the organization’s 2020 Form PC, a financial document similar to a federal Form 990 that must be filed annually by all non-profit or charitable organizations in the state. The lengthy form includes financial disclosure requirements, annual donations, employee compensation and a conflict of interest section requiring non-profits to disclose various transactions with related parties, which include trustees and board members.

A specific section of the document requires non-profits to disclose lease arrangements made with Trustees. The Trust has leased two properties — Alley’s General Store and the Osborne Wharf — to board members.

Mr. Klein downplayed the issue on Thursday and blamed the problem on the Trust’s former accounting firm.

“It’s a non-issue from a content point of view. It’s more a clerical issue,” Mr. Klein said. “I was not happy with our accounting, with our CPA firm doing the taxes, and they were not responsive to me when they took over. So I’ve changed firms.”

He declined to name the firm, but said that it was based off-Island and had been replaced by a new accounting firm in August of this year.

“The state requested the Form PC from our bookkeeper,” Mr. Klein added.

“We had it for 2019. The audit was complete, and we combined audits for 2019 and 2020 earlier this year....They are going to be completing their tax returns for 2019 and 2020 in the next few weeks.”

The Attorney General’s non-profit and public charity division is responsible for overseeing the assets of thousands of public charities throughout the state and also investigates and enforces alleged breaches of fiduciary duty. Mr. Klein said the state has requested all the Trust’s financial documents in one submission, explaining why the organization still remained out of compliance.

Questions about the Trust arose following the Edgartown town meeting in June, when town officials tabled a $300,000 Community Preservation Committee warrant article to paint and renovate the Whaling Church. It later came to light that Trust executive director Funi Burdick had altered the work quote without the knowledge of the contractor. A similar issue was discovered regarding a public funding request for the Flying Horses Carousel in Oak Bluffs. Although the Oak Bluffs warrant article was approved at town meeting, town staff quickly froze the funds.

Ms. Burdick resigned in the wake of the discovery. The search for a new executive director remains underway.

In a sit-down interview with the Gazette, Mr. Klein said he was happy, but not surprised the DA’s office declined to prosecute, and that the organization had hired a Boston attorney to conduct its own, internal investigation of the matters.

“I was very, very pleased that [the DA’s office] has finally now come out with the report, which was not a surprise to us. That’s what we expected,” Mr. Klein said. “We put all the facts on the table that we had. And we want to move forward.”

Mr. Klein said that the Trust’s board, which has more than 40 members, was devastated by the contractor quote issue and that two staff members, including Ms. Burdick, had left the organization. Mr. Klein declined to comment further on the departure of the second staff member, citing privacy over personnel issues.

“There were a couple of employees who did something which they should never have done. And they’re no longer with us,” Mr. Klein said.

Three board members also voluntarily stepped down from the board, due mainly to age or lack of engagement, Mr. Klein said. But he said there had been increased engagement from the organization’s governance, finance, events and building committees over the past months, and said the board had also formed a “community outreach committee” with the hopes of fostering better relations between Vineyard residents, board members and Trust properties.

After Edgartown froze funding for the Whaling Church project, Mr. Klein said that a private Edgartown citizen had undertaken an email campaign and created a separate organization called “Friends of the Whaling Church” to raise money to complete the painting and renovation. Mr. Klein confirmed the citizen was Parthenia Kiersted, and that the organization had raised nearly $300,000. He said that the community engagement committee arose out of the “Friends” organization, and that a similar effort was underway in Oak Bluffs.

The Trust currently has a banner on its website soliciting donations for the Flying Horses platform renovation and painting project, with more than $25,000 raised. The town has not yet released CPC funding for the project, and work remains on hold.

Mr. Klein said that work was set to begin on the Whaling Church in October, with the hope of finishing by the first week of December.

“The Trust, right now, is internally in very good shape,” Mr. Klein said. “Financially, we’re in good shape. From a governance point of view, we’re in good shape. From an economic point of view, from finances, we have a hill to climb to get to year end. But I’m confident with the team in place, we can do it.”

Mr. Klein also addressed conflict of interest questions that have arisen regarding the Trust and its board members. After leasing Alley’s General Store to board member and owner of Le Roux home goods store in Vineyard Haven Michael Levandowski last spring, Mr. Klein said that the Trust and Mr. Levandowski reached an agreement that he would step away from the board. Alley’s General Store reopened to the public this month following a summer-long closure.

“Michael and we both concluded that once he was going to be an operator...it was not appropriate for him to stay on the board,” Mr. Klein said. “It was a mutual decision.”

But Mr. Klein maintained that there was no problem with the Trust leasing a property it owns at 45 Dock Street, known as the Osborne Wharf, to board member Gerret Conover for use as a real estate office. He said that Mr. Conover had put hundreds of thousands of dollars into renovating the building, and that the lease was mutually beneficial to both parties.

He added that the Trust’s counsel had looked into the arrangement and identified no issues.

“I don’t see an issue at all,” Mr. Klein said. “As long as [Mr. Conover] recuses himself from anything involving the terms, the rent, et cetera.”

An extensive search remains underway for a new executive director for the Trust. Mr. Klein said that the organization has received upwards of 60 applications, from both on and off-Island candidates, and that interviews were being conducted this week.

Reflecting on the past summer, Mr. Klein asserted that the turmoil at the Trust was not connected to its board. But he apologized for what he called unforgivable mistakes that were made on a staff level, and said his goal was to help the Trust refocus on its mission of energetically maintaining historic properties and regaining the trust of the Vineyard community after the upheaval.

“This was not a governance issue at the board level,” Mr. Klein said. “But it’s clear to us the connection to the community is a lesson learned, and that [Ms. Burdick] and we, haven’t been as outgoing to our respective communities...as we could have been.”