"Audit details turmoil at Somerville nonprofit" by Matt Byrne |
Globe Correspondent, November 05, 2012
The former director of the
agency that provides Head Start for
preschoolers in Somerville and Cambridge
freely used the agency’s
credit
card for
personal expenses, racking up more than 100 personal charges
in a single year, according to an independent audit that apparently cost
Kimberly Smith-Cofield her job.
As the audit was being finalized, Smith-Cofield
abruptly resigned as
executive director of the Community Action Agency of Somerville in June,
followed closely by the agency’s finance director and later four
members of the board.
Agency officials declined to release or even describe the audit
findings, calling them confidential.
But a copy of the audit filed with the attorney general shows that
Smith-Cofield frequently used the agency’s credit card for unspecified
personal purchases, despite
repeated warnings from agency officials to
stop. The audit describes Smith-Cofield’s personal purchases as
“misappropriation of agency funds,” though it does not disclose the
amount. The audit also suggests Smith-Cofield repaid the money.
Now, the state and federal agencies that provide nearly all of the
agency’s $5.5 million budget are calling for better financial controls,
and the state Department of Housing and Community Development has
launched its own audit of the agency, which Smith-Cofield had run since
2009.
“We’re stewards of public money here,” said Arthur Jemison, deputy
undersecretary of Housing and Community Development. “The things that we
saw in the audit concerned us a great deal. It goes to our mission,
which is we’ve got to make sure families take advantage of the services,
and the public dollars that go to support that are being spent
efficiently.”
If the state’s audit uncovers more problems, Jemison said, the
Community Action Agency could face penalties, including the loss of
hundreds of thousands of dollars in state-distributed grant money.
“We’ve got a wide range of options and everything is on the table,”
said Jemison, whose department is in charge of distributing the federal
grants.
Reached by phone Sunday, Smith-Cofield, who said her last name is now
Simmons, declined to comment. “I have nothing to add to the story,” she
said.
Disclosure of the findings by independent auditor James A. George of
Boston pierces a wall of silence that has surrounded the Community
Action Agency since Smith-Cofield left on June 30 after a little more
than three years on the job.
According to documents the agency filed with the IRS, Smith-Cofield
was paid $85,442 in 2009, the latest year for which information is
available. Officials would not disclose Smith-Cofield’s most recent
salary.
Other agency leaders have given varied reasons for remaining silent.
Suzanne Bremer, the board chairman who resigned Oct. 2, along with three
other board members, said she could not comment because she had made a
deal as part of Smith-Cofield’s resignation.
“I have signed a nondisclosure agreement with the former executive director,” said Bremer in a phone interview.
The current board president, Sonja Darai, also declined to talk about
the problems on Smith-Cofield’s watch. Instead, she issued a statement
that acknowledged the difficulties and pledged to continue to improve
internal financial controls.
The Community Action Agency of Somerville “has made great strides to
improve its operations which support its critical mission of providing
Head Start education to 355 children in Somerville and Cambridge and
assisting those in the community who are the most in need,” Darai wrote.
Last year, most of the agency’s $5.5 million budget was drawn from
federal block grants. The lion’s share — $4.4 million in state and
federal money — paid for Head Start, and
$417,540
paid for an advocacy program to help prevent homelessness and help
lowincome residents obtain benefits.
Though demand for the agency’s services remains high — more than
13,000 Somerville residents live in poverty, the highest percentage
since 1993 — questions have swirled around the agency’s leadership since
2010, when a state review found weaknesses in basic financial
management. A federal review of Head Start this spring also found
deficiencies in accounting practices.
Since June, an accounting firm, Glivinski & Associates, has been
handling accounting and finances, part of a larger effort to improve
management, which included the development of written ethics and
conflict-of-interest policies.
But the findings in George’s 29-page
annual audit show just how serious the problems had become. Agency
officials in addition to Smith-Cofield were making purchases on the
agency’s credit card without providing receipts, and the internal review
of expenses was so lax that George said agency officials might not
detect misuse of funds.
“Credit card transactions are unable to be substantiated,” according
to the audit, describing the failing as a “material weakness,” the
accounting term for a serious problem.
The audit did not specify what personal expenses were incurred with the credit cards.
Since the audit, the board has clamped down on credit card use, disciplining employees who abuse the privilege.
In August, Jeffrey Karon, the director of administration and
finance, resigned, though he insists he did nothing wrong. “I was the
scapegoat in the whole thing,” he said in an interview. “I have nothing
to hide.”
Karon declined to offer specifics, on the advice of his attorney.
Three former employees told the Globe that the departure of
Smith-Cofield, Karon, and the board members ended a long, unhappy period
at the agency’s Union Square offices, describing managers who clung to
outdated and inefficient practices and an executive director who was
frequently absent and seemingly disengaged.
“You could cut the tension in the air,” said Claudia Arrecis, 33, a
former housing and benefits case manager who worked for the agency until
January 2011. “There was never an appropriate communication of
anything. One day things were done one way, and the next day they would
change it. We just kind of had to wing it, and the people who paid the
price . . . were the clients.”
Somerville’s mayor, Joseph A. Curtatone, expressed deep concern for
the future of the agency, but said he felt the board of directors had
taken the necessary steps when they were presented with the issues.
Curtatone said he supports an ordinance pending before the Somerville
Board of Aldermen that would require nonprofits that receive city money,
including the Community Action Agency, to abide by the city’s
conflict-of-interest and ethics disclosure rules.
“We are the watchdogs entrusted with public tax dollars, either
directly or indirectly,” Curtatone said. “We have a certain
responsibility to be transparent and alleviate any concerns of any
conflicts.”
Now, the board is interviewing finalists recommended by an
independent executive search firm for an interim director who will
oversee the Community Action Agency while a nationwide search is
conducted for a permanent leader.
But the woman who has been acting director since Smith-Cofield’s
departure already is facing controversy for the way she runs the
community advocacy program. A former employee last month filed a
discrimination complaint against Melissa McWhinney, while another
alleged that she disregards the same management issues the state
Department of Housing and Community Development is
investigating.
Daniel Dessin, a housing and benefits advocate fired last month, said
McWhinney forced him out of the agency because of his race, sex, and
ties to the employee union, where he was a vocal negotiator during
protracted contract talks that ended in June. The complaint is pending
with the Massachusetts Commission Against Discrimination.
A second former benefits advocate, Gleisson Araujo, 40, said in an
interview that McWhinney sharply criticized him when he attempted to
raise serious organizational and federal reporting problems inside the
advocacy department. Frustrated at the inaction, he resigned in 2011.
McWhinney, along with agency attorney John Carey, declined to comment on the personnel issues, citing privacy rules.
“I’m relieved to have left that place,” said Araujo, who said the
only thing he misses are the people he used to help. “It’s a shame you
have public money being wasted and misused.”
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And after dark:
Somerville club cancels New Year’s party after fight
A Somerville nightspot has canceled its New Year’s Eve party under pressure from city officials after a
fight involving as many as a dozen women broke out early Friday morning, triggering a major response from Somerville, State, and Medford police, city officials said.
In a statement, Mayor Joseph A. Curtatone said that he has marshaled the city’s enforcement agencies into taking a close look at Club Night Games, in the Holiday Inn on Washington Street.
Breakfast in the morning:
Historic Somerville diner being sold