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NEON, about $1.3 million in hole, will cut Norwalk programs according to local funding

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Norwalk Economic Opportunity Now (NEON) board member Cynthia Bowser, left, and Chairman Mike Berkhoff watch a presentation about the Alternatives in the Community program Wednesday evening.

NORWALK, Conn. – More than $1 million remains outstanding to vendors of Norwalk Economic Opportunity Now (NEON), paperwork released by the agency Wednesday night shows.

The agency was at a deficit of $1.3 million as of Aug. 30, according to the financial reporting distributed at Wednesday’s board meeting.

The mood was low-key at the scantily attended board meeting, where there was no action taken due to the absence of a quorum. Seven of the 11 remaining board members were present. Six members resigned between Sept. 23 and Oct. 3.

New board chairman Mike Berkhoff congratulated interim CEO and President Chiquita Stephenson for the financial paperwork.

“I want to thank you for getting these done,” he said. “I’ve been seeing that each time we have a board meeting that we’re coming closer and closer to the actuals.”

The paperwork, attached below, shows that NEON took in $9,536,968 from Jan. 1 through August. Expenses were $10,884,675.

The cash flow statement shows that September ended with a negative cash balance of $1,002,254. The ending cash balance for October is projected to be a deficit of $528,718. November’s deficit is projected to be $588,632, while December is projected at $891,569. Those balances include the emergency funds just provided to NEON by the Department of Social Services.

Budget cuts have been made since the last board report on Sept. 11, the report says. That brings the total reduction to the annual budget to $2.5 million, but the impact on this year’s budget is $819,450 because the cuts were made as the year went on instead of the beginning, the report says.

Checks to vendors totaling $1,124,622 as of Oct. 7, dating back to April, are on hold.

Head Start has an annual budget of $1,435,308 for the entire year, the report says. There is a deficit for August of $126,904, the entirety of its cost to NEON. That includes $89,428 in salaries. Draw-downs are done quarterly, so there was no income for the program in August, the report says.

NEON interim CEO and President Chiquita Stephenson, left, speaks at Wednesday night's Board of Directors meeting.
NEON interim CEO and President Chiquita Stephenson, left, speaks at Wednesday night’s Board of Directors meeting.

“This information is not new information,” Berkhoff said after the brief meeting. “This information was given at the very first board meeting that I came on, which was a couple months back. So when the other board members said that they never received this information, that was not true. That information was given.”

The information is in a different format, he said, and the reporting is getting quicker.

There should be more news soon.

“We worked straight through the weekend – Saturday, Sunday and Monday – developing two new financial models for NEON,” Berkhoff said. “We’re going to be meeting with elected officials next week and we’re going to be presenting one with additional funding, this commitment, this is what we’re going to do; and the B plan, no additional funding, we’re going to cut the services based on that.”

If Norwalk doesn’t pony up, Norwalk will have services cut, he said.

“We’ve got to trim down services,” he said. “We can’t keep running as it is. The past board was fiscally unresponsible. When the funds stopped coming in and they kept providing services, because it’s the right thing to do for the community, they had to make a financial decision. Nobody made a decision. This problem didn’t start now, this problem started before. It only got worse as time was going on. … What else can we do? If there’s no money flow coming in and it’s all flowing out, eventually the bucket of water empties out. That’s where we are.”

Berkhoff said four potential board members are being interviewed next week. If they join, and they are expected to, that will make it a functioning board of 15 members, he said.

No members of the public were present at the meeting. Conversation among board members was scant, only about six minutes long. Most of the time was spent watching a presentation from Larry Langhorn, director of Alternative in the Community (AIC), a U.S. Department of Justice program designed to reduce criminal recidivism.

It was formerly known as Alternative to Incarceration. Norwalk’s AIC program ranks No. 1 or near No. 1 in the state in numerous categories, he said.

The goal for 12-month recidivism for program completers is 32 percent, but Norwalk’s AIC was at 31 percent in the second quarter, he said. It was at 30 percent in the first quarter, he said.

Better to be a lower number, he said, as it means fewer people being arrested, he said.

NEON – Oct 9, 2013, 10-12 PM

Comments

4 responses to “NEON, about $1.3 million in hole, will cut Norwalk programs according to local funding”

  1. jlightfield

    This is joke right? The financial paperwork linked to the article fails to identify actual revenue streams, grant by grant, restrictions to encumbered funds, and narrative to explain significant variances.
    .
    Just to pick an easy one, a 74k variance in telephone budget versus actual is something that should be explained.
    .
    After almost a year of cash flow issues, NEON still hasn’t entered in all the data?
    .
    After almost a year, NEON shows a significant revenue drop is Federal and State grants, and these grant line items aren’t identified as to how they are being expensed, and if those expense items are submitted as reimbursables.
    .
    NEON failed to provide departmental or program budgets and actuals.
    .
    It is tragic that the people impacted by this level of ineptitude are the most vulnerable people in Norwalk and Stamford. However, the blame goes right back to the board, present and past who continue to allow operational deficiencies to continue while grant funders question the organization.

  2. Olsen

    Nothing funny about this crisis and it’s no joke. Easy to slam them but they aren’t the ones responsible. We have done this dance before haven’t we? Blame the current guy for the predecessors screw ups. Some people just don’t seem to have a good understanding of real life challenges. It is easier to critique than roll up the sleeves and volunteer some expertise. Besides getting the fiscal house in order, dealing with staff and board challenges Ms. Stephenson can improve and address public relations better. Yes its allot to deal with granted but PR cannot be at the very bottom of priorities, non profit or, for profit. Lots of misinformation flying around because well, there’s just not much information coming out from Ms. Stephenson as she struggles with so much, at once. Delegation is an important skill that Ms. Stephenson’s oftentimes does not have that tool in her tool box. So its kinda a do all position. However public relations is a vital component to restructuring. One clip, very poorly scripted, edited, delivered and produced is not sufficient to address the pressing needs to, well, address the press. Ms. Stephenson was and is aware of the challenges and she has accepted them. That alone is enough to afford her respect and a little elbo room to get the train back on the tracks. Ok so the books are a mess, it wasn’t her doing and it does appear that she is working diligently to clean things up. It may be an enormous task for Ms. Stephenson but she does appear competent, responsible and she did take on the job, eyes wide open going in, she knew what she would have to deal with and still she accepted the challenge. If not her, than who? Someone outside that has no idea and will book just like those board guys and gals did once it was clear there was actual work to be done. How about some support for the ones that are actually in the trenches taking the heat, working to get the job done, while under continuous fire, from all sides. Looks at the current city administration, not expecting some huge change of heart from the current administration so NEON is on its own, for now. So maybe it would be helpful if Ms. Stephenson did a real interview with a respected journalist say like Nancy Chapman and kinda introduced herself and worked on clearing up many misconceptions and well, tell us the story. Just be straight up. It’s vital to reestablish trust and faith in the reorganizing and rebuilding of this vital community service.
    Go a long way, if this executive responsibility of public relations was addressed and executed properly. Post haste.
    Now for us, armchair critiques on the sidelines maybe we can lighten up a smidgen and give Ms. Stephenson some support,let her do what she knows has to be done. Or does someone else think they can do better and want to step up, clean up all this mess and take all this heat? Ms. Stephenson ya gotta build a rapport as well as balance the books, its the job. Talk to Nancy.

  3. The following response to the comments of jlightfield, is submitted on behalf of the NEON Finance Department:

    The financial report to the Board did include the total agency’s income statement and balance sheet along with an income statement for the Federal Head Start program that included a narrative. This kind of information is crucial to making informed decisions about the organization’s financial future. Currently we have a vast number of funding streams and it would be very exhaustive to list them grant by grant in a financial report to the Board of Directors. We have always had that information readily available at all times and share it with NEON’s Board of Directors and management team on a regular basis.

    Much of Our Board’s work is done in working committees. Reviewing budget to actual reports for each of our many projects (over 60) at every Board meeting can be counter-productive allowing too much time to be spent on minute details when NEON has initially been trying to solve big picture problems. Our intention has been to provide departmental budgets vs. actual reports with a narrative in our monthly Board packets, as members have gained a better understanding of NEON’s inner workings.

    NEON is a very large organization with numerous projects as mentioned above. One can therefore imagine that there would be a vast quantity of Accounts Payable invoices that need to be reviewed, verified, coded and posted to our accounting system on a daily basis. NEON has six different sites and all invoices are sent to one central location.

    Just ask and we will share this information, hope to see you at our budget meetings. Our focus remains on the children, families and individuals that we serve.

  4. claudia silver

    smart of them to have a great businessman like Mike Berkoff to lead the board now.

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