Its board is a who's who of Utah businesses, with presidents and CEOs of the state's biggest corporations filling out the roster. It has more than 300 member companies.
As a 501(c)(6), EDCUtah is classified by the IRS as a nonprofit under the same section of the tax code as chambers of commerce, trade associations and, until recently, the National Football League.
But for five years, beginning in 2010, EDCUtah failed to file its annual tax returns reflecting its income, expenses and top-salaried employees. Edwards said he first learned of the oversight last October, when it was brought to his attention by someone outside the organization that the IRS had revoked EDCUtah's tax-exempt status more than two years earlier for failing to file the reports.
"It came as a big surprise to us that that had happened," Edwards said. "As the CEO, I just went about what I was doing and just assumed certain things were happening, but, in fact, they were not."
EDCUtah hired a new auditing firm to help go back and reconstruct the prior years' tax returns and filed them with the IRS in February of this year, along with an application to have the corporation's tax-exempt status reinstated. The attorney for EDCUtah was given preliminary word this week that the IRS had given its initial approval to that request.
Edwards said the organization has also taken steps recommended by the auditors to strengthen internal financial controls, such as hiring a new chief financial officer, Jill Collette. It made changes to its accounting policies to ensure expenditures are more easily tracked.
"These are things that we should have done some time ago," Edwards said.
Dean Luikart, regional vice president for Wells Fargo, became chairman of EDCUtah's board just as the tax-filing oversights had come to light.
"I can tell you I think it's being dealt with, in my mind, very well," he said.
Luikart is one of six people on a newly created finance committee, along with members with extensive financial backgrounds like Zions Bank President and CEO Scott Anderson, Goldman Sachs managing director David Lang and Workers Compensation Fund CEO Ray Pickup.
The idea is to have a smaller group with financial expertise keep a more focused watch on the financial operations of the organization.
Since the committee was created, members have met regularly to deal with the tax and audit issues.
The Utah Legislature, which appropriates $900,000 in taxpayer money — with another $1.2 million coming from local governments — each year, is looking into the financial management of the agency as well.
Members of the state legislative auditor general's staff had been doing what Senate President Wayne Niederhauser, R-Sandy, characterized as a "survey" of EDCUtah's management practices and recommended to legislative leaders that the review be expanded into a full-scale audit.