WATERLOO -- The Iowa Department of Inspections and Appeals has issued an administrative subpoena to the Boys and Girls Club of Black Hawk County for records of its bingo operations.

The subpoena was served Monday, Inspections and Appeals spokesperson David Werning said.

Werning said the department took the action following the Boys and Girls Club's announcement in May that it is facing a financial crisis which had depleted about $500,000 in assets over the past several years. A decline in the club's revenues from nonprofit bingo operations was a factor in the club's worsening financial position, according to club members and an emergency committee of community leaders working with the organization, which is also reviewing bingo operations.

"We want to conduct a full audit of the bingo records to verify that the licensee has been operating appropriately," Werning said. "In the event there has been some problems, further down the road we'll look and see what, if any, actions we take…We've requested multiple years of records.

"Our actions are all administrative at this point," Werning said. "If any impropriety is found, the department has various administrative options it can pursue, up to and including revocation of the license."

U.S. Internal Revenue Service 990 forms showed the club's bingo revenue declined from $108,000 to $51,000 over three fiscal years, through June 30, 2004, on revenues and expenses of about $1.1 million to $1.3 million each year. Club officials and emergency club members said bingo operations showed a net loss for 2005.

The club's last audit, in 2004, did not include the bingo operations, board and emergency committee members have said.

In addition, the club is one quarter delinquent in its quarterly financial reports to the state, Werning said.

It also appears the club previously was operating under two licenses -- one for Bingo Youth Foundation, the other for the Boys and Girls Club -- in the same location, at 4302 University Ave. in Cedar Falls, which Werning said is not permitted.

The two licenses effectively allowed the operation to function four times a week. "It is not allowed. There can be more than three bingo occasions per week per location," Werning said. The Youth Foundation license expired in January 2005. The current license for the Boys and Girls Club extends through September 2007.

Asked why the state granted dual licenses, Werning said, "We have two people to keep track of 1,600 licenses to social and charitable gaming organizations. We do the best we can to investigate when conditions warrant." Any indications of suspected criminal activity are turned over to the Iowa Department of Public Safety for further review.

Boys & Girls Club emergency committee co-organizer and longtime former club board member W.D. "Mac" McCausland said the subpoena "has been turned over to a CPA, which will review the subpoena information and club records. And we will certainly rectify anything that seems to be irregular in the activities of that bingo operation in prior months before the emergency committee was formed."

McCausland and others also have raised more than $250,000 in private pledges from individuals and foundations to keep the club running, particularly during the summer months. The club serves 1,500 mostly under privileged youth, in activities ranging from computer training to youth basketball.

Contact Pat Kinney at (319) 291-1484 or Pat.Kinney@wcfcourier.com