Nonprofit group faces allegations over funds

By Timothy Pratt (contact)

Wednesday, June 23, 2004 | 10:56 a.m.

Nevada Partners Inc., a nonprofit group charged with helping people find work, is facing allegations that it entered into more than $270,000 worth of contracts without clearance from the Southern Nevada Workforce Investment Board -- the source of the funds.

Additionally, two consecutive reviews by the investment board spanning a period of nine months showed that the nonprofit group spent nearly $500,000 in federal funds without leaving a paper trail. The documentation was found by Nevada Partners earlier this week and approved by the investment board Tuesday.

Nevada Partners president and chief executive Steven Horsford is also a member of the investment board and has been a subject of conflict-of-interest complaints because he sits on the board that doles out the money and runs a group that receives the money.

Horsford, who is a Democrat running for the state Senate seat being given up by Sen. Joe Neal, is expected to have his letter of resignation accepted by the 52-member investment board today.

Pam Egan, spokeswoman for Nevada Partners, said Tuesday that most of the claims against her organization were misunderstandings and that they were working to clear the record.

"We're not always perfect, but we do try to address situations when they arise," she said.

As for his resignation, Horsford, 31, in a statement, said he was leaving the investment board after nearly four years due to "personal and professional commitments."

The investment board was created by the federal Workforce Investment Act in 1998, and is made up members from the public and private sectors whose job it is to decide how to spend federal funds in helping stem unemployment, as well as guide policy in related areas.

The investment board, which covers Clark, Nye, Lincoln and Esmeralda counties, received $14 million in Labor Department funds for the next fiscal year, which begins July 1, about $1 million of which is being passed on to Nevada Partners.

The total budget for Nevada Partners during the same period is $3.1 million.

During the current fiscal year that ends June 30, the investment board had $13.9 million and gave $2.3 million to Nevada Partners.

The investment board's review of the nonprofit group last fall found that Nevada Partners couldn't show what it had done with the $488,000 the board had given the organization to help youth and unemployed adults. Another review repeating the claim was completed last week, though a written report from the review has not been released, Ardell Galbreth, the investment board's deputy manager said.

Galbreth said at about 3 p.m. Tuesday that he was evaluating paperwork meant to show whether 26 subcontractors provided a series of services with the money. He said he would take a couple of days to decide whether Nevada Partners spent the money appropriately or not.

Egan, the Nevada Partners spokeswoman, said the money paid for "outreach and referral to other programs." She also said "it took nine months -- until last week" for Nevada Partners "to find out what they (the investment board) really wanted."

But three hours after the Las Vegas Sun spoke to Galbreth on Tuesday, Egan said she had received a fax from the investment board official saying he was satisfied with the paperwork. The fax, which Galbreth sent to the Sun this morning, said the organization had supplied the board "with the necessary documents to validate your ... service delivery to eligible clients."

When asked how it was that he had done in a couple of hours what he had said Tuesday would take a couple of days, Galbreth said: "My team worked really hard."

Other allegations that Nevada Partners is facing come from a report released June 10 summarizing the state Department of Employment of Training and Rehabilitation's review of the investment board.

The report notes that Nevada Partners entered into a contract for $245,000 with the Nevada AFL-CIO labor organization without prior approval by the investment board staff.

Horsford also directs the Culinary Training Academy, which trains cooks, porters, waiters and other related professions. The academy is located at Nevada Partners and is funded by hotels. The Culinary Union's parent group, Hotel Employees and Restaurant Employees International Union, is one of the AFL-CIO's member organizations.

Similarly, the nonprofit organization entered into a contract for $25,000 with Toney, McGuinn & Associates without the investment board staff's approval.

Egan said her organization "typically shows contracts to (investment board) staff beforehand ... and it is our recollection that we did this ... but we have no proof."

The contract with the AFL-CIO, for the period of January 2003 to January 2004, was for the labor organization to locate people who had lost their jobs as a result of Sept. 11 and refer them to Nevada Partners for services, Egan said.

"We were having difficulty finding people who were out of work ... and just wanted to get them in the door," she said.

But the federal funds behind the contract were withdrawn May 6, Egan said; up to that point, $80,000 had been spent on referring 115 people to Nevada Partners.

Egan said 26 of those people found jobs, and the other 89 "received services."

Galbreth said he will be reviewing paperwork on this contract to see if it was appropriate.

"For example ... we're not going to allow taxpayer money to be spent on basket weaving when there's no jobs for basket weaving -- that's why we have the policy (of reviewing contracts beforehand)," he said.

The investment board official said he will be reviewing the contract with Toney, McGuinn & Associates as well. Egan said that contract was for speaking to adults about what the "medical career looks like."

The report from the review said Nevada Partners also did not submit that contract to the investment board for approval.

"Our recollection is we submitted documentation, but again, we have no proof of that," Egan said.

As for Horsford's resignation, Galbreth said, "It's the right to do."

Galbreth remembered one board meeting -- though he said he could not recall the date -- where Horsford "did not take his seat with the board, but with the public, and stood up to make comments on behalf of Nevada Partners ... (until) the (board's) legal counsel said it was inappropriate."

The board meeting agenda included an item on funding for which Nevada Partners was eligible, he said.

According to the minutes from a Jan. 15 meeting of the investment board's youth council, Horsford spoke during the public comment portion of the meeting on a decision to recommend to the full board that another organization receive three times the funding as Nevada Partners.

"I just wanted to say for the record I respect your decision, I don't agree with it," Horsford said. He then proceeded to argue against the decision.

Minutes from a March 3 meeting of the investment board's programs and performance standards committee indicate that board member Chester Richardson objected to Horsford speaking about different nonprofit organizations and the need for their services, saying it represented a conflict of interest.

The committee voted on that occasion to let Horsford speak.

Galbreth said that "every time" Horsford started to speak on matters regarding Nevada Partners people at the investment board meetings "would tell him to shut up."

There is no state or federal rule or regulation specifically addressing Horsford's apparent conflict-of-interest, Galbreth said, but the investment board's by-laws indicate that any board member with financial interest in an organization or business eligible for funds cannot vote on or discuss awarding those funds.

"But if he receives money from the workforce investment board ... it's hard for him to be effective both for the board and Nevada Partners," Galbreth said.

Galbreth also said that the federal government stipulates that a nonprofit organization be represented on the board, but that it is "not a good system ... when you have a service provider that is not meeting performance standards and not in compliance -- and it's not good for them to be receiving so much money," he said.