Neal explains EOB’s troubles

Molly Ball

Monday, April 12, 2004 | 9:12 a.m.

As federal investigators wrapped up a fifth day of probing into the troubled Economic Opportunity Board, state Sen. Joe Neal, the spokesman for the county's largest nonprofit group, conducted a news conference Friday to continue his defense of the organization.

Despite questions about $2.1 million in public money that the EOB has been unable to account for, Neal said the organization has not decided whether to conduct an audit. If an audit is done, it will be an internal one, he said.

Neal also answered accusations that EOB overspent on a trip to a conference in Puerto Rico last year. The approximately $30,000 cost for the five-day trip was covered with a specially earmarked grant, and its purpose was to allow parent representatives from all over the country to network and share experiences, Neal said. The EOB sent 10 people to the conference.

Neal said EOB paid high rates for its delegation's hotel rooms because the reservations were made at the last minute.

Neal also repeated that $2.1 million in unaccounted-for funds was merely "mismanaged" and never missing.

The money was advanced to EOB's general fund by the state to pay for vouchers submitted to EOB's child care assistance program, but turnover in EOB's fiscal control position kept the advance from reaching the program, said Neal, D-North Las Vegas. Neal said the $2.1 million was mistakenly spent on other EOB activities instead.

The money apparently missing from the child care assistance program, EOB's largest initiative, has been the most serious of many allegations against EOB. The problems prompted a federal investigation, and the federal team was in town last week to conduct interviews and review documentation.

The Nevada Welfare Division deposited the $2.1 million into EOB's general fund last summer. At the same time, then-chief financial officer R. Keith Latham was leaving EOB and being replaced by Debra Santos, who was fired in January.

The new financial officer at that time "looked at the general fund and said, 'Oh, we have a lot of money,' " Neal said at Friday's news conference. The money, he said, was then "expended on various programs and other things within the agency."

Neal did not specify what those miscellaneous uses were.

"That's what happened to the $2.1 million," he said.

The problem, Neal said, was simply "a mix-up in terms of people not understanding that once (the state) put the money in the general fund, they were supposed to parcel it out to the child-care agency."

To avoid such misunderstanding in the future, EOB has set up separate accounts for its various grants and activities, Neal said.

EOB's problems have not affected the services it provides, Neal said.