Critical report warns EOB of loss of funds

Thursday, April 29, 2004 | 10:59 a.m.

A federally funded report released Wednesday makes clear that the Economic Opportunity Board -- the Las Vegas Valley's largest nonprofit agency -- must make dramatic top-to-bottom changes in order to keep millions of taxpayer dollars under its control.

The report's findings include allegations of credit card payments made without proper paper trails, questionable use of taxpayer-funded cell phones, and a board that is "deeply divided ... (and) lack(s) a cohesive purpose, strategy or plan for the organization."

A state official said the report should serve as a wake-up call for the board because it is a wake-up call for the state.

"The board's a mess, they need to reorganize, they need to redo their bylaws, their governance is not working, the board is not running their ship and their finances are in disarray," said Mike Willden, director of the state department of human resources, the official who called for the out-of-state consultants to look into the agency.

These and other findings were made public in the 14-page report, the result of one of two recent inquiries into the agency. The report was prepared by a team of consultants paid with $17,000 in federal funds.

The EOB, in its monthly board meeting Wednesday, decided to call a special board of directors meeting May 6 to respond to the report's recommendations, which deal with the board, the agency's structure and management and its finances.

Although the nonprofit's board did not discuss the report, this week's meeting seemed to mirror the report's findings: a citizen asked a board member to apologize for saying "shut up" at a Head Start meeting months ago; another board member told another visitor to shut up; board treasurer Eloiza Martinez presented a fiscal affairs report without detailing the agency's current financial status; a new payroll system was approved without any discussion.

The recommendations in the state consultants' report include breaking the board down to three members, to "carefully rebuild itself with the addition of new members who can bring specific skills." Currently the board is missing three of its required 15 members; its structure calls for five members each from business, government and the low-income community.

The report also suggests installing an outside management team to assume all management and financial responsibilities for the agency in the short term. The agency has lost nearly all of its executive management staff in recent weeks.

As for finances, it recommends that the outside team develop a plan to evaluate the agency's entire accounting system and put monitoring in place that currently doesn't exist.

May 6, the date chosen by the board for the EOB to respond to the recommendations, will be the 10th day after Willden released the report to the troubled agency, the last day of the state's 10-day deadline.

Willden said Tuesday that the EOB must respond to the recommendations within that time period or risk losing some of its funding.

Willden's department oversees four pots of money that go to the agency, including its biggest program, child care for low-income families, which got about $20 million in state and federal funds this year.

That program couldn't account for $2.1 million earlier this year, the issue that first brought the state to call for the team of consultants that visited the agency earlier this month and forwarded its findings and recommendations to the state earlier this week.

A second inquiry was done by the Head Start bureau at the same time; its results will be released next month.

Sen. Joe Neal, D-North Las Vegas and recently appointed spokesman for the agency, said the board will have agency staff look at the consultant team's report and offer guidance to the board.

When asked about the last-minute schedule for responding to its recommendations, he said, "If we don't get (a response) in (May 6), we can ask for an extension."

Neal declined to comment on the report's findings.

But Willden said, "The deadline's firm -- we need to have something in by the 10th day."

The state official said the report's findings were "pretty strong."

Willden also called the report "a wake-up call for the state."

He said many of the consultant team's findings should have been caught by the state earlier.

"It's obvious to me that we didn't have enough fiscal oversight over time. Fiscal monitoring has been missing or inadequate," he said.

Willden also said he will have the different state divisions that control funds going to the EOB look at the report and decide if they need to do more in-depth fiscal inquiries.

"Should the state have done more? Obviously. Will it? Obviously.

"There are still what I would call smoky issues."