State scrutinizes Aldersgate’s ‘excessive’ credit card charges
State scrutinizes Aldersgate’s ‘excessive’ credit card charges
N.C. Department of Insurance finds charges for travel, jewelry, employee meals and drinks
The following article appeared in the June 3, 2024, edition of The Charlotte Ledger, an e-newsletter with smart and original local news for Charlotte. We offer free and paid subscription plans. More info here.
LEDGER IN-DEPTH
As Aldersgate’s finances became shaky, a new report cites an ‘extensive amount of purchases’ on employee credit cards
◼️ Regulators detail charges for Tiffany bracelets, room service in Beverly Hills, plane tickets to Hawaii and ‘luxury resorts in prime locations’ for conferences
◼️ N.C. to extend oversight of east Charlotte retirement community for another 150 days
◼️ Aldersgate CEO says it has tightened spending rules and changed leadership
State insurance regulators are continuing to investigate the finances of Aldersgate, located on a 231-acre campus off Shamrock Drive in east Charlotte. It has encountered financial troubles and replaced its CEO. (Photo by Kevin Young/The 5 and 2 Project)
by Cristina Bolling
North Carolina regulators spent months combing through millions of dollars of credit card charges made by employees of the financially struggling east Charlotte retirement community Aldersgate, and on Friday, they released a report showing what they called lax credit card policies and questionable purchases of travel, alcohol, trips and gift cards.
The N.C. Department of Insurance (NCDOI), which regulates the financial aspects of continuing care retirement communities, started an investigation of Aldersgate’s credit card purchases when an initial review of the nonprofit’s expenses turned up evidence that for the past several years, credit cards had been used to make “an extensive amount of purchases,” in some months exceeding $200,000, regulators wrote in their report.
At a time when Aldersgate’s financial difficulties were mounting, the report found that the company had “inadequate policies” on card use and approval and failed to “reduce credit card charges to necessary expenses only.” And it faults Aldersgate for “excessive travel charges,” “excessive gift card purchases” and “questionable alcohol charges,” among other deficiencies — and provides plenty of examples of charges expensed to Aldersgate, including room service and bar charges at a Beverly Hills hotel, plane tickets to Hawaii and a round of shots at a Plaza Midwood bar.
The 38-page report is the latest piece of evidence of the financial troubles state officials have been working to explore and help Aldersgate untangle in the last couple of years. The report alleges no criminal malfeasance, but it did come with a warning that if an Internal Revenue Service audit finds that someone at a nonprofit uses funds for personal gain, the person could be sanctioned and the organization could lose its nonprofit status.
Aldersgate is under an order of supervision from NCDOI, which means that state officials are overseeing Aldersgate’s finances as the community works on a plan to get on solid financial footing.
Aldersgate has had a string of years plagued by operating losses, mounting debt, failed plans for a second campus at Shalom Park in south Charlotte and rising costs due to Covid.
Nearby 4 years of charges examined
In the credit card probe, regulators zeroed in on the period of Jan. 1, 2020, through Oct. 31, 2023, during which the report said Aldersgate staff made nearly 26,000 credit card charges totaling almost $8.7M on three separate credit card accounts for three Aldersgate-related entities: the Aldersgate retirement community, the umbrella organization Aldersgate Life Plan Services and the Aldersgate At Home home health care business.