NORWALK, Conn. — Another Norwalk Economic Opportunity Now Board of Directors member has chosen to walk away from the agency, the sixth since Sept. 23 and fifth this week, and interim CEO and President Chiquita Stephenson said departing members who have complained about lack of adequate financial reporting are “lying.”
In an email to new NEON board chairman Michael Berkoff at 8:42 p.m. Thursday night, Alan Rossi wrote, “I am hereby resigning from the board of directors of NEON Inc. effective immediately.
“I must say that I am leaving with a sense of disappointment in stark contrast with the optimism that I felt when I volunteered to serve on NEON’s board in March of this year. Back then I felt that as a newly installed board we shared enthusiasm for NEON’s important mission and had the commitment and experience to work with the management team to improve performance levels for the benefit of all the people that need NEON’s services. I also was optimistic that in short order we could address past problems regarding lack of accountability and transparency.
“Instead, I have found in NEON an organization inextricably wedded to flawed management practices where decisions are made in an arbitrary fashion, often in conflict with NEON’s mission. Additionally, and in spite of my repeated requests both oral and written, as a director I never received the information that would have enabled me to assess the Corporation’s financial situation, how resources were used and what outcomes were being achieved. In summary, I have not felt that NEON was receptive to my advice nor was I ever given the information necessary for me to properly fulfill my fiduciary responsibility as a director.”
The resignation is the latest in an exodus that began last summer and accelerated starting Sept. 23, when Board of Directors Chairman William Westcott resigned. That was followed Oct. 3 by members TaShun Bowden-Lewis, Christopher Ruzzi, state Rep Jonathan Steinberg (D-Westport) and Dr. Susan Weinberger, Ed.D. Ruzzi had resigned as treasurer Sept. 27.
Stamford businessman Michael Berkoff was elected chairman Tuesday, Oct. 1, to replace Westcott.
Westcott, Weinberger and Steinberg all were quoted about their inability to fulfill their fiduciary responsibilities because of what they said was poor financial record keeping. All three expressed frustration and their doubts that things would improve. NancyOnNorwalk was not able to contact Bowden-Lewis, and Ruzzi chose not to comment at this time, he said.
Financial record-keeping was at the heart of the problems cited in the Office of Inspector General audit that led to the ouster of former NEON CEO and President Joe Mann, the loss of grants from the city and a demand by the Department of Social Services for the return of more than $300,000 in misspent grant money. Information in that audit has threatened NEON’s administration of Norwalk’s Head Start program.
Late Wednesday and earlier Thursday, Stephenson shared several documents with communications between NEON and federal officials from Health and Human Services and other agencies involved in grants for things such as Head Start. HHS was looking for information to show that NEON had taken action to resolve the many problems found in the 2011 audit by the Office of Inspector General. The documents are attached below.
Many of the problems involved the way NEON handled and accounted for its finances. In a document titled May 9, 2013 Corrective Action Plan, the agency assured HHS that it is continuing efforts to improve financial reporting. In fact, in the first item, it is stated that, in 2012, the new management team has developed a specific plan and timeline to address issues related to financial reporting. This is in response to a recommendation that the finance department improve its procedures related to monthly close and reconciliations.
However, nearly five months after that document was sent, several of the board members who have resigned have cited the lack of timely and complete financial reports despite repeated requests for them as a major reason for their resignations.
Stephenson, who was chief operating officer under Pat Wilson Pheanious when that document was prepared, defended herself against claims by departing board members of poor management by claiming they are lying.
“… My role at NEON prior to my current position was development and public relations. My current role gives me the ability to utilize my skills to move the agency forward. That is why you now have a organization budget, program budgets and cash flows. This information was given to all board members and is continued to be given to board members. Only they can explain why they are lying about being in receipt of financial information. … It is available. It is not pretty but it is reality and now we are focused on moving forward.
“Some board members left because they were tired of other board members’ treachery and felt that their time could be better spent working with individuals that want to see progress and I respect that. Some left because life responsibilities changed and therefore, their priorities had to change. However, notice they did not leave hostile and focused on hurting children, families and the community. As for others, there is no need for me to comment because they have expressed themselves. I just wish them well and God’s Blessing.”
Weinberger pushed back Thursday night.
“Since my tenure began as a member of the Board of Directors of NEON, the term ‘liar’ has been used repeatedly by management to place blame on others for the agency’s problems. Most recently, it was used to respond to the Head Start report stating major program deficiencies. I suggest that management should eliminate that negative and accusatory term from their vocabulary and instead, concentrate on honesty and transparency.”
Weinberger went on to discuss the financial data supplied by NEON management.
“When financial reports were submitted to the board for review, they were often one page, lacked clarity and were largely incomprehensible. They did not reflect the current financial activity and record keeping that one would expect to find in an organization responsible for managing such a large budget. Accounting was sloppy, statements of cash flow and profit and loss were lacking, and both raised questions around reliability of the financial data. Our former treasurer, who recently resigned, reported to the board at several meetings that he could not answer questions about the financials submitted because he had just received them, a few minutes before a board meeting.
“Only when vendors started writing to all board members did I have a better idea of the seriousness of the business at hand. This included major legal fees that have not been paid and promised in the amount of $300,000 from one law firm, money owed to Community Playthings in the amount of $9,375 for furniture shipped to Ben Franklin School or cessation of services on Sept. 1 from the Child Guidance Center due to unpaid bills totaling $8,049.41 under a contract, according to its executive director, for intervention, observations, teaching support and assessment. This information was not forthcoming from the management over a very long time. Minutes of meetings and copies of e-mails from seemingly frustrated vendors state the facts.”
Steinberg also responded to Stephenson’s comments.
“The financial situation was on every board meeting’s agenda, as it should be. However, I think you’d be hard-pressed to find a board director who was not frustrated by the inadequacy of the information presented,” he said. “Cash flow statements which suggested that we had positive cash flow when we knew otherwise. Last minute declarations of emergency to cover the payroll or other obligations. We asked over and over again for a simple accounting of critical obligations going forward. There were always excuses as to why we couldn’t have them.
“As for Ms. Stephenson’s version of what’s transpired, I’m really not going to get involved in proving who is credible. I’m a great believer that the truth will come out, sooner than later. It takes a great deal of energy to keep all these storylines going – blaming everyone but NEON management for the organization’s continual state of crisis, whether it was accusing the Department of Social Services, the Head Start program, contrary board directors, or unpaid vendors. It’s just hard to sustain the contention that everybody else is lying.”
Despite the ongoing problems, Steinberg, who joined the board just 3½ months ago, said he had hoped the new board, installed in May, would be able to get the operation turned around.
“Many board directors hoped we would finally get past the political shenanigans and focus on the critical issues of proper procedure, financial sustainability, and program management,” he said. “But it became clear that it simply wasn’t going to happen. That’s the real story.”
Weinberger said it is time for NEON management to step up and accept the blame for the problems.
“For the children and communities we serve,” she said, “it will be a great step to resolving the many issues facing a troubled agency.“
May 9, 2013 Corrective Action Plan
National External Audit Review Response
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