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Monday, November 10th, 2014

Dissolved group owes more than $400K

State audit reveals flaws in defunct anti-poverty organization's finances

By William Kincaid

Joannie Bruns, assistant transportation coordinator, helps a client at the forme. . .

CELINA - A now-dissolved antipoverty agency owes the state almost half a million dollars according to a recently completed state audit of the prior management of Home Weatherization Assistance Program funds.
If the Ohio Development Services Agency is unable to recover $422,834 from Sources, it will certify the debt to the state attorney general's office for collection, ODSA spokesman Todd Walker told the newspaper.
"We're currently reviewing our options to recover the funds. Our priority is ensuring accountability for taxpayer dollars," Walker said.
The mismanagement issue previously led Sources' board of directors to relinquish the HWAP program to Community Action Partnership of the Greater Dayton Area.
HWAP is funded by the U.S. Department of Energy and provides eligible homeowners and tenants with safety inspections, insulation for attics and walls, reduction of air leakage from major sources and repair of heating units.
Board members in late June voted 8-0 to close the non-profit, antipoverty agency that had served the area for almost a half century.
The agency's programs were taken over by the Lima Allen Council on Community Affairs in late summer.
But Sources is still on the hook for paying back $422,834.
Tammy Barger is continuing on as Sources board president, even though the agency is dissolved, to help resolve the issue.
"There's a whole lot more involved than just shutting your door," she said, explaining the board gave her authority to resolve outstanding financial issues. "But all the fiduciary duties still have to be performed in order to close everything out."
  Before dissolving, the board hired financial consultant Jim Lavelle to close out the organization's books and Cleveland-based attorney James Simon to help with the state audit, Barger told the newspaper.
"Because we want to make sure that everything is done correctly and legally," Barger said.
But Barger isn't sure if or how Sources is going to be able to pay back the debt. Due to accounting issues, she isn't even certain how much money Sources currently has. For most of its funding procedures, Sources would pay for services with its own money before being reimbursed through state and federal grants, according to Barger.
Sources is still waiting for the reimbursement of around $130,000 from a state grant, she said.
"We would love that money to be able to go to LACCA to purchase new vehicles because really, the profit from this should go back into new vehicles."
Barger, Lavelle and Simon continue to work with ODSA and to close out Sources.
"Basically with Sources, we're trying to do everything we can legally correct so that we hopefully can maybe get LACCA some funds to help with the new vehicles," she said. "So we are hoping that with (Simon) that will be able to have everything settled up. I'm really not looking at getting anything settled by the end of the year, but I'm hoping that for next year."
The state initially questioned the organization's expenditures of $837,756.53 related to the HWAP Program. Working with the state, Sources officials were able to lower that amount to $422,834.
The initial two-week on-site audit conducted in November 2012 examined all charges to the HWAP program, American Recovery and Reinvestment Act grant, Formula 2011 grant and Formula 2012 grant from April 1, 2009, to Sept. 30, 2012.
The audit addressed grants administered by Sources for the HWAP program, which board members handed over to Community Action Partnership of the Greater Dayton Area.
Breakdown of the $837,756.53 in question originally included: missing documentation, $311,758.41; projects without bids, $199,420.99; unreasonable charges, $112,473.99; misclassified costs, $94,205.93; and other questioned costs, $119,897.21.
The expenditures in question occurred during the administration of former executive director Deb Farrell, who had served for more than 20 years and was fired in October 2012 without explanation. HWAP coordinator Richard Goodwin and HWAP estimator/inspector Steven Walter resigned from Sources in October 2012.
Former interim director Kirk Moriarty, who left the agency in May, had said the closing of Sources was the worst possible outcome and completely unnecessary.
Moriarty had said Sources was financially solvent and, to his knowledge, not in dire straits. It maintained a very positive relationship with state auditors, he had said.
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