NORWALK, Conn. – South Norwalk’s anti-poverty agency says it is moving forward, but it is being forced to deal with problems from its recent past as the federal government is asking the state to retrieve $314,065 in federal funds.
The State of Connecticut Department of Social Services (DSS) is reviewing whether legal action is warranted to get the money back from NEON (Norwalk Economic Opportunity Now), according to a press release sent out by NEON late Friday.
The press release links to an Office of Inspector General report that NEON says was released Thursday. OIG says that of approximately $514,000 in Community Services Block Grant (CSBG) and CSBG Recovery Act costs that DSS claimed on behalf of NEON, $199,000 was allowable under the terms of the grant and applicable Federal regulations.
The NEON press release makes it plain that prior management of NEON is to blame. It mentions that it will try to get the funds from former management.
The release contains a Jan. 28 response NEON interim President/CEO Pat Wilson Pheanious sent to OIG, complaining that the initial OIG summary does not credit NEON with working with OIG to uncover information and does not detail the management changes.
It also contains a March 15 letter from DSS Commissioner Roderick Bremby to Michael Armstrong, regional inspector general for audit services with the U.S. Department of Health and Human Services.
Bremby said that the state agrees the money should be returned. The state wants the money back from NEON and discussions are already underway with the agency, he said. DSS attorneys are reviewing whether legal action is warranted, he said.
Bremby goes on to explain the steps DSS is taking to “assist all community action agencies in establishing adequate internal controls.”
Pheanious wrote the following in her formal response to the OIG report: “NEON understands and takes seriously the issues identified and resulting recommendations. Our agency regrets that these deficiencies represent missed opportunities to meet program objectives that reduce poverty, revitalize the community and empower people to become self–sufficient. … Please be assured that NEON has retained counsel to further the process of recouping funds that were misdirected. We will use every vehicle that is available in this circumstance to recoup mismanaged, fraudulently utilized or poorly accounted funds.”