Another federal agency to probe EOB

By Timothy Pratt

Thursday, March 18, 2004 | 11:09 a.m.

Another federal agency announced it was launching an inquiry of the Las Vegas Valley's largest nonprofit agency Wednesday in the wake of questions about the agency's handling of its finances and programs.

Wendy Hill, assistant commissioner for the Head Start bureau in Washington, said she decided to have consultants come April 4 to look at the Economic Opportunity Board's handling of the early-childhood programs.

The review is one of several into the operation of the EOB. Federal and state officials are looking at the agency after EOB could not account for $2.1 million. In recent weeks the agency has faced further turmoil as its chief financial officer was fired and the chief executive resigned.

The EOB, which was founded in 1964, handles a series of social programs aimed at reducing poverty. The programs include job training, child care, senior day care, housing and drug and alcohol treatment.

The federal Head Start announcement came a day after the EOB agreed to have a similar review done by Health and Human Services department consultants, after concerns about a child care assistance program partially funded by HHS were raised in recent weeks.

On Wednesday the United Way -- one of the few private sources of money in the EOB's $60 million budget -- said it would be withholding its funding for the remainder of the 2003 fiscal year pending its own review of the agency in the coming weeks. The fiscal year ends June 30.

Dan Goulet, president of United Way, said his agency would withhold the remaining balance on the year's $164,300 in funds "because of community attention that has come up" about the EOB.

The funds support six programs, including senior day care at the Hollyhock and Lied centers, which have been cited in EOB documents as possible targets of cutbacks due to the agency's ongoing financial problems. Goulet said that if the funds are held back "for any period of time, it will affect clients -- but I don't believe that will happen."

He said his agency rarely makes such a decision and has withheld funds in only about 20 contracts of the 650 it has handled in the last five years.

Hill cited a series of flaws her agency pointed to in a 2003 review of the EOB's Head Start and Early Head Start programs -- as well as recent problems facing the agency -- in explaining her decision. Eleven months later, Hill said, she doesn't have "sufficient assurance" that the flaws -- in governance, planning, monitoring, human resources and fiscal management -- have been corrected.

"This suggests that there's a lack of management and understanding of how the program operates and a lack of oversights," she said.

"We need to look now at this agency."

EOB board member and state Sen. Joe Neal, D-North Las Vegas, who was named Tuesday as the EOB spokesman, said he thought the agency had already answered the federal agency's concerns.

"If she's going to come in and look at something we think we already responded to, she's welcome," he said.

Hill said she sent a letter March 5 to Logan pointing out which areas of the May 2003 review needed "onsite verification" in order to see if EOB had corrected the flaws.

The letter said a visit would be arranged from May 24-28. But recent events -- including allegations her office has received regarding possible "fraud, mismanagement, overspending of Head Start funds and a shortage of funds in the Head Start account" -- made her decide to move the follow-up review up a month.

Neal said he had not seen the March 5 letter. He also said he had no information about the allegations.

Hill said that follow-up visits such as EOB will receive are rare nationwide. Of 550 initial reviews made last year, less than 50 required such additional scrutiny.

The concerns outlined in the 2003 review included that the EOB was spending more than 15 percent of its grant for Head Start and Early Head Start on administrative costs. The total budget for the programs exceeded $12 million in 2002, according to the EOB's most recent annual report.

"Congress expects that the bulk of grant dollars are going directly to services," Hill said.

"The documents that EOB has provided do not provide sufficient assurance that this is the case," she said.

The federal official said that financial and other problems at such programs eventually wind up affecting clients.

"Agencies that have financial shortfalls usually cut back in services to children," she said.

Tammie Morrison, who has a granddaughter enrolled at the Head Start program in Henderson, said the program lacked supplies and that she had donated books and paper for photocopies this year.

Morrison said she has enrolled six grandchildren in Head Start during the last 13 years and never had to pay for supplies before.

Dawn Olsen, who has a daughter in the same program, said she had spent about $20 on supplies this year.

"This is the first time I'm hearing of this," Neal said.

The written summary of the May 2003 review of the Head Start program -- dated July 8 -- stipulated that EOB must correct certain flaws in 90 days and others in six months.

When asked why the federal government had not been assured of many of these corrections to date, Hill said, "I believe we could have been more aggressive."

She also said the regional office of the federal agency located in San Francisco "believed they were working steadily toward a resolution."

Neal said that the board "pleads ignorance to a lot of the stuff that's going on.

"We're just a board," he said. "We don't know what the facts are ... we're trying to correct the situation.

"Why are you trying to make us criminals?"