Valley’s largest nonprofit agency is under scrutiny

By Timothy Pratt (contact)

Thursday, March 11, 2004 | 11:13 a.m.

The Economic Opportunity Board, the Las Vegas Valley's largest nonprofit agency, can't account for $2.1 million in federal and state funds and has lost two of its top people, according to a county memo and people close to the situation.

These and other problems facing the agency have caused a state office that oversees four of the board's programs to suggest sending in a federal "strike team" -- a Health and Human Services Department group that recommends fixes when federal funds are handled poorly or improperly.

The problems could lead to a loss in services soon, particularly at two senior day care centers, according to county officials. EOB uses county buildings as part of its social service programs.

"This sounds pretty serious," said Thom Reilly, Clark County manager. "The first thing we're concerned about is to make sure there's not an interruption of services."

EOB runs 30 programs aimed at reducing poverty and helping the community, according to the group's website. EOB oversees programs that provide senior day care, child care, job training, drug treatment, health care, housing, transportation and business development.

It's unclear how many people the group serves, but Rosemary West, who works with United Way, said that EOB is "far and away ... the largest nonprofit agency" in the valley.

The EOB has an annual budget of $60 million which is funded mostly through federal and state grants. Local nonprofit groups like Catholic Charities and Salvation Army have annual budgets of less than $15 million. EOB has been in the valley since 1964, according to the group's website.

EOB officials did not return several phone calls from the Sun on Wednesday.

Reilly said he received a memo Tuesday from Douglas R. Bell, Clark County's manager of community resources management. The document describes Bell's "frank conversation" with Mike Husted, EOB deputy director, and Mary Jo Greenlee, administrator for the agency's senior day care centers.

Husted could not be reached at his office Wednesday. The agency's spokeswoman, Christine Brady, referred all questions about the situation to Claude Logan, chairman of the board that shapes EOB policy and the spokesman for the agency in the vacuum of leadership left by recent events. Calls to Logan were not returned Wednesday.

The memo to Reilly outlines recent turmoil at the agency, including Executive Director Marcia Rose Walker's firing of Finance Director Debra Santos, followed by Walker's resignation.

It also refers to a $2.1 million advance from the state's welfare division meant for the agency's Child Care Assistance Program that "had apparently been used for ineligible program costs." The need to pay the state back may lead the agency "to find savings in their day-to-day operations ... as well as undertake efforts to eliminate programs," the memo notes.

Hollyhock Senior Day Care Center and Lied Adult Day Care Center were mentioned as being possible targets of the cost-cutting measures.

The county owns four of the buildings the agency uses for Head Start, a preschool program for low-income families. The county is also getting involved in the agency's problems "to help them out because they offer valuable services to the community," said Virginia Valentine, assistant county manager.

Reilly said he wrote a letter this week to EOB's chairman of the board offering to have personnel from the county's audit, finances and human resources departments "offer an assessment" to the agency.

The state matches or channels federal funds for several programs at the agency.

Nancy Ford, administrator for the state's Welfare Division, said officials from her agency discovered in January that "the ($2.1 million) advance had been used for purposes other than day care.

"We don't know where it went," she said.

Since then, Ford has had EOB provide weekly reports in order to monitor its finances, she said.

Mike Willden, director of the state Department of Human Services, which oversees Ford's agency, said the incident has caused him to send officials to look into other EOB programs the state oversees -- programs for senior citizens, the poor and alcohol and drug addicts.

"When you start seeing issues like this," Willden said, "you are going to start seeing a lot of auditors."

Willden said staff had been in Las Vegas earlier this week to look at the programs to fight poverty paid for by federal community services block grants -- and discovered additional problems.

"We have some concerns ... there are discrepancies, though not large in nature," he said. Details from that audit will be released next week, he said.

Additionally, the health division will be auditing the EOB-run W.I.C. -- a nutritional program for women, infants and children -- and alcohol and drug abuse programs next week.

Willden said the problems already identified may be serious enough to require the dispatch of a federal "strike team" to the agency.

State Sen. Joe Neal, D-North Las Vegas, a member of the EOB board, said Walker, the executive director, fired Santos about a month ago and then resigned herself earlier this week.

He also said there was a problem with $2.1 million in the agency's budget, but said there was nothing illegal done.

"That advance got mixed up and was recorded in the general fund account," Neal said. "It was not earmarked to where it was supposed to go ... (but) the only violation of policy was using it for other programs -- nobody took anything, there was no criminal activity."

Neal said he was concerned because "EOB has been in the community over 35 years and is an upstanding organization in serving the needs of the poor."

Neal said he became aware of the events he described a couple of weeks ago. He said the responsibility lay with the agency's upper levels.

"Our managers and people in operations were supposed to be on top of these things," he said.