Wednesday, June 18, 2008

Explanation sought on missing $1.5M in CAA funds

Double payment should have produced surplus for agency

By Mary E. O’Leary
Register Topics Editor
— While two nonprofit agencies debate which should repay the state for $1.5 million in billing errors, a state legislator said it is more important to determine what happened to the money.
Community Action Agency of New Haven was found to have double-billed the Agency on Aging of South Central Connecticut for its Meals on Wheels program for at least three years, and possibly more than a decade.
"If they took in twice as much money as they should have, they should have run a surplus. Where did the money go?" asked state Rep. Vincent J. Candelora, R-North Branford.
The funds were released by the state Department of Social Services to the Agency on Aging, which in turn contracted with CAA to deliver meals to senior citizens at sites in Greater New Haven and to the homebound.
The Agency on Aging put CAA on notice in early April that it would hold CAA responsible to repay the funds, if so demanded by the state. By the end of that month, DSS had asked the Agency on Aging to repay the $1.5 million within 30 days.
David Dearborn, a spokesman for DSS, said DSS is trying to broker an agreement on a payment plan with the agencies. "In practicality, the two agencies are to a large extent dependent on our help in resolving this situation," he said.
Candelora said since the main funding sources for both nonprofits are federal and state governments, they are just paying back the state with taxpayer money. He suggested the state look to insurance that covers the CAA’s board of directors to recover the money.
"The board of directors are the ones on the hook for this, if there is missing money," Candelora said. He said if the situation occurred in the private sector, someone would be held accountable.
The billing problem, which apparently was long-standing, was discovered internally by CAA and reported to the state early this year.
Dearborn said none of the audits conducted by the accounting firm Blum Shapiro suggest "anyone walked away with the money." He said "the most logical assumption" is that CAA "used the dollars billed inappropriately."
He characterized the situation as "complex," and said there may be foundation money, donations or savings that could go toward the debt.
CAA Executive Director Amos Smith, who came aboard two years ago, did not return a call seeking comment, but has said in the past that CAA is in better shape now than it has ever been.
The CAA board has turned over several times in the past decades and DSS has had a daily presence there recently to oversee its work. Federal officials raided the CAA in January, removing boxes of personnel files and records on the agency’s heating fuel program.
Michele Volpe, the Agency on Aging’s attorney, said, "We are willing to help get the problem resolved," but it is clear "CAA is not going to pay it. Based on the audit, they don’t have the money."
"How do they expect us to extract it from them?" Volpe asked. She said the Agency on Aging wanted to open up its contract with CAA to get other bidders, but DSS has not allowed them to do so mid-contract.
She said the agency has also formally asked that the debt be forgiven.
In the meantime, Volpe said the Agency on Aging has provided a road map for CAA to improve its budgeting.
"We have given them a lot of guidance, but we can’t run two agencies," she said.

Mary E. O’Leary can be reached at 789-5731 or

No comments:

Read the Masterpiece Cakeshop ruling

Read the U.S. Supreme Court case: Masterpiece Cakeshop v. Colorado Civil Rights Commission . Masterpiece Cakeshop Court Decision by H...