Nonprofit group in missing-funds scandal to cut back senior programs

By Timothy Pratt

Monday, March 15, 2004 | 10:58 a.m.

Under scrutiny for $2.1 million in unaccounted-for funds, the nonprofit agency with the largest budget in Southern Nevada will cut costs in one of its senior citizens programs as early as today, a temporary spokesman said.

Claude Logan -- chairman of the nonprofit agency's board and now its spokesman -- announced the impending cutbacks Friday after not returning repeated calls during the preceding two days, during which access to all administrative personnel in the agency was also denied.

When asked the whereabouts of the money, Logan said, "That's the $2.1 million question."

But cutbacks are not the only possible outcome of an apparently growing scandal facing the Economic Opportunity Board. The Sun broke the news last week that the agency was missing the state and federal funds.

Mike Willden, director of the state human resources department -- which oversees four divisions that fund EOB programs, including the child care program where the money is missing -- said he will decide by Wednesday whether to call in a federal "strike team" to address the issue.

Additionally, the EOB has asked the state welfare division for more time to pay back the $2.1 million, said Jerry Allen, who directs the division's child care assistance program -- the intended source of the missing money.

The program is the largest of 30 EOB runs with its $60 million budget. EOB's mission is to reduce poverty and help the community, according to its website. Its programs include senior day care, child care, job training, drug and alcohol abuse treatment and housing.

Logan said that Mary Jo Greenlee, who oversees EOB's two senior day-care centers -- Hollyhock and Lied -- would be giving him a "strategy plan" today to save the agency some money. He said the two centers have been losing money for some time and immediate cuts could include firing staff and cutting staff hours "as long as we can keep meeting the requirements for running this type of program."

They would also look to draw more senior citizens to the centers as a way of bringing in more money, he said. According to a county memo describing the agency's troubles, both centers are licensed for 60 to 80 senior citizens, but only see about 45.

Meetings of the EOB fiscal affairs committee and of the full board will take place in the coming weeks, at which point more drastic measures -- such as shutting one or both of the centers down -- will be considered, Logan said.

"That would be the last-case scenario, if the cost-cutting doesn't work," he said.

Willden expressed concern about the agency's situation.

"It's uncommon to see the lack of fiscal oversight and internal control," he said.

Willden said his concerns might lead him to ask for help from a Health and Human Services team by mid-week. His decision will be based on cost -- the state would pay the team's travel, lodging and per diem expenses -- and EOB's response to the idea, he said

"I don't want to compound the problem by sending in storm troopers," he said.

When asked about the offer to bring in the federal team, Logan said he would "not refuse any help," but, he added, he would have to coordinate the effort with a similar offer from Clark County.

Meanwhile, Allen said the EOB sent him a letter last week asking the state to give the organization longer than the six months originally agreed upon for the repayment of the $2.1 million. The six months started in January. Allen wouldn't say how much longer the agency asked for but said the state is to reach a decision on the request this week.

Other details emerging include that the clue that unraveled the accounting problem appears to be a bounced check the EOB wrote to a child care center months ago, and the nonprofit agency may have given its board false information about the missing money.

Allen said a child care center that EOB contracts with to provide child care to low-income families reported to the state late last year that the nonprofit agency wrote them a bad check.

The nonprofit agency gets $20 million from the federal and state governments for the child care program and then contracts with about 200 centers to provide the service. One of those centers gave the state an anonymous tip about the check, Allen said.

"I thought, that shouldn't happen," he said.

As for whether EOB's board members knew about the financial and other troubles before, Logan said the board was told in late January or early February.

Gene Collins, also a member of the board, said he thought the board was given "erroneous information" about the missing money -- but he wouldn't offer details or even when the information was given.

It was also revealed last week that Marcia Rose Walker, EOB's executive director, had fired Debra Santos, the agency's financial director, more than a month ago. A few weeks after that termination, Walker resigned.

The state welfare division sent Walker a letter in late January, when she was still executive director, and that letter makes clear that EOB faces other problems besides the missing money.

These include high turnover in employees working in finances and high costs linked to offices it moved into in 2002 near Rancho Drive and Gowan Road.

On Jan. 14 and 15, Roger Mowbray, deputy administrator for the state welfare division, and Michael Torvinen, administrative services officer for the state human resources department, requested a meeting with Santos, who was the EOB's chief financial officer at the time.

As the letter sent from Mowbray to Walker detailed, the meeting covered a series of problems the agency was facing, including:

Mowbray was not immediately available for comment on the letter. Allen could only comment on the item regarding staff turnover at EOB.

"A couple of people I was used to dealing with left in the last year," he said.

"This piqued my interest -- I was like, 'Whoa, what's going on here?' "

Allen has overseen the child care assistance program since it began in 1991, during which time EOB has always gotten the funds earmarked for running the program in Southern Nevada.

The official added that the nonprofit agency's problems have not led to cutting back child care services to date.

Meanwhile, Logan said the agency is also discussing beginning the search for a new executive director.

"We have many challenges we have to overcome," he said.