Audit of Louisiana DOE Grant Funds: Misuse, misunderstanding or a little scratch
Written by  // Monday, 16 June 2014 11:10 //

capitol-red-blueHoly New Living Word, Bat Man!

John White’s Department of Education just can’t seem to keep tabs on all these pop-up private for-profit education facilities that have proliferated under his and Gov. Bobby Jindal’s sweeping educational reform programs.

 Questionable expenditures by an organization under contract to the Louisiana Department of Education (DOE) have been flying under the radar, overshadowed as it were, by corruption charges against internal auditors with the Louisiana Department of Children and Family Services.

Remember New Living Word up in Ruston? That’s the school that was approved for some 300 vouchers even though there were no instructors, no computers, and no facilities—and obviously, no vetting. Just an application from the school was all that was needed, and BAM! Instant approval.

Not that New Living Word was the only one; there were others, including one in which the director had a long of history of legal problems and another in which the director referred to himself as a “prophet.” And there was the charter school that decided it could conduct random pregnancy tests on female students after one girl was expelled when it was learned she was pregnant, though no punishment was meted out for the dad, a member of the school’s football team. Only threatened legal action by the ACLU reversed the ill-considered policy.

Still, New Living Word became the instant poster child for DOE’s bureaucratic ineptitude.

Until now.

Now we have Open World Family Services, Inc. a New Orleans education “nonprofit” established ostensibly to “strengthen the family through education and training,” and paid through grants under the 21st Century Community Learning Center, a federally-financed program funded through a $1.4 million contract with DOE that ran from May 1, 2009 through April 30, 2012.

Or perhaps we should have said had Open World Family Services, Inc. It closed its doors on May 31, 2012, a month after its contract with DOE ran out.

But not before its administrator managed to misappropriate, misspend, mishandle, mismanage, fold, staple and mutilate more than $300,000, according to Legislative Auditor Daryl Purpera’s office.

To read entire audit report, click here: 000011D0

Included in that amount were $116,323 in expenses which Open World did not incur, $148,596 in unapproved purchases and expenses that included debit card withdrawals ($16,758) airfare to Monrovia, Liberia ($7,204) and payments to the immediate family of Executive Director Kim Cassell ($18,414).

Cassell’s attorney assures us it was all just your basic “lack of knowledge of grant management” that led to a number of “errors in funds management.”

That would be the usual errors, like requests for reimbursements listing 129 specific checks (all payable to vendors) totaling $221,624 when only 74 of those checks totaling $105,301 actually cleared Open World’s bank accounts. But what of the remaining 55 checks? Well, Cassell’s former administrative assistant told state auditors that Cassell instructed her to pull blank checks and use or record the blank check numbers on reimbursement requests for “projected” vendor expenses.

“By submitting reimbursement requests that included false information, Open World improperly received $129,402 in reimbursements from DOE and may have violated state and federal laws,” the audit report said.

Just an error in funds management.

Kinda makes you wonder about those seven contracts worth a combined $430,000 that the Department of Health and Hospitals (DHH) has awarded to Open World Family Services since 2008 to combat asthma and tobacco use. Did that money go up in smoke as well?

Open World, the audit says, submitted requests and received reimbursements for employee benefits totaling $13,079 for which no expense was incurred.

Another simple error in funds management.

From May 2009 to October 2011, Cassell improperly used public funds totaling $11,108 for veterinary bills and pet supplies, a homeowner’s insurance payment, personal travel and college tuition payments, according to the audit report.

Ditto on the error in funds management.

Cassell’s time sheets from Sept. 18, 2010, to Oct. 19, 2010, indicate that she was on vacation and traveling. But during that same time period, the audit says, she made debit card withdrawals in Monrovia, Liberia, totaling $4,576 and that she incurred airfare charges totaling $200 on Oct. 17, 2010.

She explained to auditors that she traveled to Liberia for the purpose of registering Open World as a Non-Government Organization (NGO) in West Africa.

She also incurred charges on the organization’s debit card totaling $1,099 in Brooklyn Center, Minnesota, while on travel to that state in November of 2010.

In all, the audit says that from May 2009 to February 2012, only a couple of months before her grant contract with DOE ran out, she used $148,596 in grant funds for puchases and expenses not included in approved grant budgets. That amount included $97,961 for rent, utilities and building improvements; $16,758 in undocumented debit card withdrawals; $7,204 in undocumented airfare charges; $15,340 for insurance policies, and $11,333 for vehicle expenses. “By using grant funds for unauthorized purposes, Open World appears to have violated its grant agreements and may be required to reimburse funds improperly spent,” the report says.

New Orleans attorney Jauna Crear wrote a five-page letter of response to the audit’s findings but basically defended her client’s actions in a single sentence:

“An overall review of the allegations, along with Ms. Cassell’s explanations, clearly shows a lack of understanding of the non-profit governance rules as opposed to a willful disobedience thereof.”

All of which raises several questions:

  • Does DOE customarily hand out multi-million dollar contracts to non-profits with inadequate experience in handling public funding?
  • What safeguards does John White have in place to prevent abuse, theft, and misapplication of public funds by other organizations under contract to DOE?
  • Does John White believe it might be worthwhile to conduct a review of other such contracts/grants?
  • Is it possible that DOE, like DHH, may have eliminated the position(s) of internal auditor as a cost-cutting measure?
  • Will DHH review the seven current and past contracts it has awarded to Open World Family Services totaling $430,000?

Sometimes you just gotta scratch your head and wonder…

Other times you look at who is running this state and then you know…

Written by Tom Aswell, publisher of Louisiana Voice.

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