State review: Rockford's Miss Carly's missing audit, financial reports

Rockford's Miss Carly's Inc. remains unregistered and out of compliance with state financial reporting requirements, according to a review by the Illinois Attorney General's Bureau of Charitable Trusts.

The bureau issued the Fifth Avenue charity a warning letter April 29 that gave Miss Carly's until May 27 to submit documents required for state registration. Required documents included a list of all its officers, phone numbers and home addresses; an annual report for 2022; and an audited financial statement for 2021.

According to a June 25 letter from the Bureau of Charitable Trusts to the charity, a review has found that not all of the documents — including the 2021 audit — were submitted by the deadline.

The bureau says the charity is not to solicit donations until it is registered and is denying a request for an audit waiver, saying that a "one-time" waiver had previously been granted for 2020.

Accountants have said the charity did not keep enough receipts and documentation from 2021 and 2022 to complete independent audits for those years, said Kristine Hemlock, a member of the Miss Carly's board of directors.

"We have receipts," Hemlock said. "We just don't have, according to the accountants, we don't have enough that would allow them to do a completely independent audit."

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The charity is working with lawyers for the bureau in an effort to find an alternative path to registration that may not require a full independent audit. Until this year, an audit was required for Illinois nonprofits that surpass donations of $300,000 annually. That threshold increased to $500,000 in 2024.

This is the latest bump in the road for the nontraditional charity founded by Carly Rice and Jacob Rush in a former Buddhist temple at 1125 Fifth Ave., which was until recently the couple's home.

A lack of financial reporting, the purchase of the building next door and clashes with the city of Rockford over building code violations have put Miss Carly's in the hot seat in recent months, especially among former employees, volunteers and donors who have taken to social media to raise concerns about how the organization is run and demand greater transparency when it comes to how the money is being spent.

The couple moved out of the charity headquarters in early June to defuse a child custody battle, mitigate a dispute over code violations with Rockford and facilitate repairs to the building's HVAC and water systems.

The move has affected the charity's hours of operation, but Miss Carly's is continuing to provide services.

Hemlock said a new board of directors and new financial controls have been installed to make sure financial reporting problems do not continue in the future. But the charity's past continues to cause problems today.

A 2022 annual report, which is essentially an Illinois version of the federal 990 tax document that all nonprofits are required to file, was not properly signed and must be resubmitted, Bureau officials have told the charity.

The bureau is also now seeking a 2022 audit and a 2023 annual report.

Hemlock said she is fighting to save the charity because it and Rice fill an important role in Rockford.

"If you need toilet paper or a blanket or whatever, just come over," Hemlock said. "You don't have put out a requisition. You don't have to pray to the Lord. You don't have to stand in line for hours. If you need something, if you need a resource, Carly will say 'I know where we can call or what we can do.' I would say it absolutely fills a need."

Jeff Kolkey writes about government, economic development and other issues for the Rockford Register Star. He can be reached at  (815) 987-1374, via email at jkolkey@rrstar.com and on X @jeffkolkey .

This article originally appeared on Rockford Register Star: State review: Rockford's Miss Carly's missing audit, financial reports