PALMER —A local nonprofit has filed a civil lawsuit against a Mat-Su Borough Assembly candidate.
Elizabeth Maxson, a candidate for District 2, is being sued by Kids Kupboard in small claims court for $5,895, according to court documents obtained by the Frontiersman.
“Ms. Maxson misrepresented herself as a duly licensed CPA as evidenced by the signed contract and her own words,” states the lawsuit. “She failed to perform services as outlined for more than two years while continuing to collect fees each month including October, 2019, after we notified her of termination.”
Maxson entered into a contract with Kids Kupboard on June 30, 2016, for $175 a month to provide accounting services from her business, Lizzy Bee’s Tax & Accounting. Kids Kupboard Executive Director Lynette Ortolano said that she is not confident that Kids Kupboard will be able to recoup the money lost.
“I don’t think that the nonprofit who’s trusted her as a contractor should be out that money to fix work that she hasn’t done,” Ortolano said. “She frauded her business, she misrepresented herself and has now cost a really good nonprofit a substantial amount of money.”
The lawsuit states that Kids Kupboard has demanded relief from the defendant, but Maxson failed to comply. Maxson retained master administrative rights to the Quickbooks file for Kids Kupboard, preventing the executive director or other Kids Kupboard staff from being able to have full access, add or remove users. Maxson said that Kids Kupboard’s accounts were kept outside of Quickbooks online.
“We had difficulties meeting each other’s schedules and they were easier to maintain on Quickbooks Desktop,” Maxson said. “They never demanded relief in any way that I’m aware, only terminated services in September. Being that this is the first we have heard of this matter, we have reached out to Kids Kupboard to see if we can come to a resolution.”
Maxson was terminated in September, and the lawsuit covers only the cost for Noble Business Services to reconcile Kids Kupboard’s books and the $175 fee charged for October of 2019. The lawsuit states that bank accounts had not been reconciled since July of 2017 leaving over 600 transactions not added to the register over a period of two years. Financial statements to the Kids Kupboard Board of Directors were deemed inaccurate and not reliable for decision making or reporting to the state of Alaska. The lawsuit claims that charts of accounts were disorganized, redundant and mislabeled.
“The condition of the accounting file demanded a substantial clean up and catch up project to bring it current and into compliance,” wrote Haylee Kurka of Noble Business Services.
Noble was contracted to perform an assessment of the Kids Kupboard accounts and charged a one-time cleanup fee of $5,720.
“We have looked at your accounting file and, unfortunately, it is in a state of extreme disorder,” wrote Kurka. “This file is one of the worst we’ve seen for a long time.”
Noble’s analysis states that Kids Kupboard is noncompliant with the state of Alaska and the IRS due to non-file of 990 returns.
“Frankly, I was surprised at the level of clean up needed in your file, because you’ve been paying an outside firm to complete this work on your behalf. Unfortunately, you have not received what you wanted or needed and are now left to the task of seeing the mistakes fixed and records updated,” Kurka wrote.
Noble’s assessment is dated October 22 of 2019, one day before Kids Kupboard filed the lawsuit against Maxson.
Attached to the lawsuit are Facebook messages from 2017 from Maxson where she claims to be a licensed CPA and Enrolled Agent certified by the IRS. Also attached is a message from September 20, 2019, where Maxson states “No, I’ve never been a CPA.”
According to their website, Kids Kupboard is a non-profit charitable organization that shares the belief that no child should ever go hungry and will provide 80,000 nutritional meals this year.
“100% of your donations will be used to feed kids-period!” reads the website.
Ortolano said that Kids Kupboard began in December of 2016 as a 501c3 nonprofit and that 990 forms for 2017 and 2018 have not been filed. The lack of accurate accounting has resulted in Kids Kupboard not being able to apply for local, state or federal grants. Ortolano was told that 990 forms had been submitted and that she felt like she was held hostage, unable to make a move because Maxson claimed to be working on the forms.
“She has all these kinds of excuses,” Ortolano said. “She’s relatively unavailable most of the time.”
Maxson will be on the ballot for Assembly District 2, but stated online that she has ceased campaigning. While Maxson attended the Mat-Su Convention and Visitor’s Bureau forum on Friday, October 18, she did not attend the Frontiersman/Palmer Chamber candidate forum on Saturday, October 19.
“My intent is not to bury her,” Ortolano said.