Editorial: Good money after bad

Wednesday, March 15, 2006 | 7:06 a.m.

Las Vegas Councilman Lawrence Weekly has too much confidence in the local Economic Opportunity Board, which was founded during President Lyndon Johnson's administration to help raise people out of poverty. Weekly, who has been an EOB board member for about five years, wants to provide it with $200,000 in city money, no strings attached, despite its well-documented inability to account for millions in government funds it previously received.

After its start in 1964, the EOB grew to become the Las Vegas Valley's largest nonprofit organization, employing 700 people and running 30 programs on an annual budget of $60 million, provided mostly through federal and state grants. Until four years ago the EOB ran its programs, including Head Start for pre-schoolers, quietly and with little controversy.

But then the federal Head Start Bureau began sensing management and accounting problems. Inquiries showed that hundreds of thousands of dollars were missing. Last month, concluding that children in the Head Start program had been and were continuing to be severely underserved because of the financial irregularities, the bureau canceled its $12.6 million contract with the EOB.

In January 2004 the state also began sounding alarms when the EOB could not account for $2.1 million it had provided for child-care programs. As auditors began discovering that other money was missing, too, including $500,000 in federal funds granted to assist homeless people, many top EOB staff and board members resigned. Consultants were brought in, but even they could not account for the missing money or prevent the EOB from becoming mired in debt.

On March 7 the Clark County Commission approved $250,000 for the EOB, contingent upon the organization paying all of it back, selling its radio station and opening its financial records to inspection.

Today the City Council will consider a proposal by Weekly to simply give the EOB $200,000. In light of the EOB's recent record, the City Council should not be that free with its money. If it approves money for the organization, it should be tied to the same contingencies as the county is demanding.

In our view, however, neither the city nor the county should be throwing good money after bad. Mike Wilden, director of Nevada's Department of Human Resources, said in April 2004 that the state was making plans in case an agency or agencies had to step in and take over the EOB's programs. We believe that now would be a good time to execute those plans.