NORWALK, Conn. – With all the light being shined of late on Norwalk Economic Opportunity Now (NEON), there are still some things lurking in the shadows. Among them: What’s up with the $800,000 worth of uncleared checks written by the Norwalk social service agency?
The checks don’t show up in the pages of the outside audit of NEON’s 2011 books performed by CohnReznick, LLP. They do, however, rate special mention in a separate assessment conducted by the Vermont-based firm Brown, Buckley, Tucker (BBT).
The BBT assessment was begun after the 2012 federal Office of the Inspector General (OIG) audit raised questions of misuse of grant money that ultimately led to the resignation of former NEON Executive Director and President Joseph Mann.
Among its findings: More than $800,000 in uncleared checks written by NEON since 2005, with no documentation explaining why they did not clear. In addition, on a list of uncleared checks from 2005 obtained by NancyOnNorwalk, several are noted as voided in handwritten margin notes, with no supporting data.
According to the BBT report, “At the time of the monitoring, a large number of outstanding checks totaling over $800,0000 was noted. NEON should submit current bank reconciliation, including the details of all outstanding checks to DSS by April 30, 2012.”
NEON Chief Operating Officer Chiquita Stephenson said in an email, “The checks have been cleared.” Stephenson agreed to speak with this reporter about the matter and to provide documentation, but failed to keep an appointment and did not respond to an additional attempt to speak.
No one from BBT responded to a request for comment.
“I want to see the checks,” said former NEON Board of Directors member John Mosby, a long-time South Norwalk activist who is pushing the organization to become fully transparent about is financial woes. “I want documentation.”
Mosby wants something else, too. He wants the state to declare a 2007 vote to reduce the NEON board from 33 members to 15 to be illegal, thus rendering all board votes since then null and void.
The reason? According to NEON’s bylaws at the time, any change to the bylaws required a vote of two-thirds of the incumbent board – 22 of the 33 members. The vote to reduce the board was taken by “10 or 12” members, he said.
“It was in violation of the bylaws,” Mosby said. “They wanted to chase some people off the board.”
He was one of those people, he said.
“Now they pick the people they want on the board,” Mosby said. “I was voted on by the people” of South Norwalk, he said, asserting that members are now all hand-picked by the organization’s hierarchy.
Mosby has taken his case to Hartford and expects to have some answers soon.
The questions follow months of controversy following the federal OIG audit that showed NEON misused hundreds of thousands of dollars in federal, state and city dollars earmarked for the Head Start early education program.
The CohnReznick audit includes a look by BlumShapiro of Committee for Training and Employment (CTE) for nine-month period ending Sept. 30, 2011. NEON and CTE merged in 2012, a merger Mosby hopes to have reversed.
The OIG said NEON improperly applied $406,434 in government grant funds that were designated for Head Start. That information led Mayor Richard Moccia, who said NEON misused $832,521 of city money over a three-year period, to take a stand against giving the agency money to run the early education program in the current budget. There is no money for the program in the proposed 2013-14 operating budget.
According to the CohnReznick audit, “Amounts reported as ‘due to funding source’ in the accompanying statement of financial condition represent unexpended grants or disallowed costs for programs which ended on or before December 31, 2011, in the amount of $1,021,695 including the following:
• During 2011, the OIG conducted an audit of Head Start costs claimed by NEON for the period January 1, 2009 through March 31, 2011 and determined that $406,434 of costs were not allowable, allocable, reasonable, and adequately documented under the terms of the Head Start Act and Recovery Act.
• The Connecticut Department of Social Services (DSS) conducted a monitoring review of the Community Service Block Grant and Human Services infrastructure grants for the period July 1, 2009 through March 31, 2012 and determined that $227,981 of allocated costs were not adequately supported.
“These unallowed costs have been included in ‘due to funding sources’ on the statement of financial position. The management of NEON is working with OIG to develop a repayment plan.
“These amounts will either be returned to the funding agencies or applied as a reduction of specific 2012 grant awards.”
Mosby said, in addition to the checks, he wants to know where that $227, 981 went, too.
He asked, “Where is that money? Where did it go? What did they use it for?”
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