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Government and People
|ANTHONY S. COOPER
DISTRICT OF COLUMBIA AUDITOR
OFFICE OF THE DISTRICT OF COLUMBIA AUDITOR
August 21, 1997
The purpose of this review was to examine activities related to Advisory Neighborhood Commission (ANC) 6A.
OBJECTIVES. SCOPE AND METHODOLOGY
The objectives of this review were to determine:
Our review covered the period August 7, 1995 through October 16, 1996. This-period included: the submission date of an Urban Risk Project grant proposal to DCRA by the project manager, Jane Mergler; the receipt of an Urban Risk Initiative grant fund check by ANC 6A's treasurer, the opening of a second bank account in ANC 6A's name by its treasurer; and the date on which ANC 6A closed the second bank account improperly opened in its name.
We reviewed the Request for Proposal (RFP) issued by the Department of Consumer and Regulatory affairs (DCRA) which solicited proposals for projects that would improve the environmental quality of local communities in close proximity to any of the more than ten Anacostia River tributaries in the District of Columbia. We also reviewed the grant proposal that Jane Mergler, project manager, Urban Risk Project-ANC 6A(10) submitted to DCRA in response to the RFP. We reviewed bank statements and canceled checks from the bank account into which the grant funds were deposited and from which checks were written for grant expenditures. We reviewed copies of available receipts submitted to DCRA to support the disbursements from the account. We reviewed the transcript of minutes of a special "emergency" meeting of ANC 6A held on Thursday, September 26, 1996 to discuss the circumstances of the grant and the opening of a second checking account in the name of Advisory Neighborhood Commission 6A T/A (trading as) Urban Risk Project. We also reviewed minutes of ANC 6A meetings for the period of July 1995 through March 1996. We interviewed the treasurer and chairperson of ANC 6A, the commissioner representing ANC 6A's Single Member District (SMD)10, and the chairperson of ANC 6A's administration/personnel committee. We also interviewed officials from DCRA.
In this report, we do not attempt to evaluate DCRA's procedures in awarding and monitoring this grant. While we did review the grant proposal evaluation sheets completed by DCRA reviewers, our examination did not attempt to determine if the grantees met the selection criteria set forth in the RFP.
Although we reviewed receipts from the expenditure of grant funds, we did not evaluate grant fund expenditures to determine if they met the criteria set forth in the RFP and the letter of agreement between the recipient and DCRA, or if the receipts supporting the expenditures were valid.
In fiscal year 1995, DCRA issued a Request for Proposal (RFP) for the Urban Risk Initiative Project. According to the RFP, organizations eligible to apply for funding included Advisory Neighborhood Commissions (ANC) and other community-based nonprofit organizations located within the District of Columbia. The RFP further stated:
The grants were funded with money received by DCRA from the U.S. Environmental Protection Agency (EPA) for the Urban Risk Initiative Program. In fiscal year 1995, DCRA budgeted $187,629 for the Urban Risk Initiative Program. The EPA contributed $175,000, or approximately 93%, of total funding for the program. The District's contribution to the Urban Risk Initiative Program was budgeted at $12,629, or approximately 7%.
On August 7, 1995, Ms. Jane Mergler, a constituent of Advisory Neighborhood Commission 6A's Single Member District (SMD) 10, submitted a grant proposal to the Department of Consumer and Regulatory Affairs for an Urban Risk Initiative grant. The cover letter accompanying Ms. Mergler's proposal stated that the proposal was prepared and "submitted under the auspices of ANC 6A(10), Representative: DeLeon Ware." According to the proposal, the name of the person authorized to sign project documents was "Jane Mergler, Project Manager." We note that Ms. Mergler was not a commissioner of ANC 6A. According to the commissioner representing ANC 6A(10), Ms. Mergler resided within the boundaries of ANC 6A(10). The cover letter was signed by Jane Mergler. The proposal itself was unsigned.
DCRA approved Ms. Mergler's proposal for a grant award of $3,180. The acceptance letter, dated September 14, 1995, was addressed to Jane Mergler, Project Manager - ANC 6A(10) and Commissioner DeLeon Ware.
A letter of agreement between "Advisory Neighborhood Commission 6A(10) and the Government of the District of Columbia" was executed on September 19, 1995. This agreement was accepted and signed by Jane Mergler as the Contracting Official for Advisory Neighborhood Commission 6A(10). The Director, Controller, and Contracting Officer of DCRA signed the agreement on behalf of the District of Columbia.
The Department of Consumer and Regulatory Affairs processed the appropriate documents and a check for $2,544, which represented 80% of the grant, was prepared in the name of "Urban Risk Project." This check was subsequently deposited into a bank account in the name of "ANC 6A T/A Urban Risk Project" opened at NationsBank by ANC 6A's treasurer.
THE PROPOSAL REQUESTING URBAN RISK INITIATIVE GRANT FUNDS WAS NOT APPROVED BY ADVISORY NEIGHBORHOOD COMMISSION 6A
The grant proposal submitted by Jane Mergler to DCRA requesting an Urban Risk Initiative grant stated that the proposal was "submitted under the auspices of ANC 6A(10)." However, ANC 6A (10) is not an organization in its own right but is one of fourteen Single Member Districts (SMDs) that comprise ANC 6A.
Additionally, Article III, Section 2 of ANC 6A's by-laws states:
D.C. Code, Section 1-262(b) states in pertinent part that;
The Auditor's review of minutes of ANC 6A meetings for the period July 1995 through March 1996 and discussions with some ANC commissioners, including the Commission's treasurer and chairperson, indicate that the Mergler proposal requesting grant funds for the Urban Risk Project grant under of the auspices ANC 6A(10) was not considered or approved by a majority of ANC 6A commissioners in a public meeting. In fact, the full commission had no knowledge of the existence of the Mergler proposal requesting Urban Risk Initiative grant funds for ANC 6A(10).
Because the decision to apply for a grant and receive grant funds was undertaken by a few individuals without the approval of the Commission, the ANC 6A name was improperly associated with the project. Therefore, the resulting grant award was not ANC funds. Furthermore, any contributions to an ANC in excess of $400 cannot be accepted by the ANC without the prior authorization of the Council of the District of Columbia. There was no authorization in this case.
SINGLE MEMBER DISTRICT 10 WAS NOT ELIGIBLE TO RECEIVE GRANT FUNDS
According to the letter from the Mayor of the District of Columbia that accompanied the Request for Proposals for the Urban Risk Initiative Project, Advisory Neighborhood Commissions were eligible to apply for an Urban Risk Initiative grant. The letter also stated that:
Additionally, District of Columbia Code, Section 1-261 ( 1 ) states in pertinent part that:
ANC 6A(10) did not have any greater authority or status than the collective body represented by ANC 6A. ANC 6A could not apply for or receive grants without the specific authorization of the Council of the District of Columbia. Therefore, ANC 6A(10) could not by itself or in the name of ANC 6A apply for or receive an Urban Risk Initiative grant. Also, ANC 6A(10) was not a registered non-profit organization and was not capable of managing the financial aspects of the project organization, which was evidenced by the fact that it was not qualified to establish a legitimate bank account to deposit the grant funds.
STATEMENT OF ANC 6A TREASURER CONCERNING EVENTS SURROUNDING THE DISPOSITION OF THE GRANT FUND CHECK
As noted earlier in the report, DCRA approved the grant in the amount of $3,180. The first payment of $2,544 which constituted eighty percent of the grant, and represented the first of two payments, ultimately came into the possession of ANC 6A's treasurer.1
The relevant statements of the ANC 6A treasurer, which are contained in the transcript of the special emergency meeting convened by ANC 6A on September 26, 19962 concerning the events surrounding the disposition of the grant check were:
The ANC 6A treasurer placed his interest in helping a resident of ANC 6A(10) above his fiduciary duty to the ANC. In serving the interest of the resident of 6A(10), the treasurer engaged in actions that violated ANC law, violated his duty as an ANC officer to disclose to ANC 6A commissioners the receipt of a grant check by the ANC, and misused the ANC's name and tax identification number to open a checking account which may have violated other laws.
ANC 6A'S TREASURER IMPROPERLY OPENED A SECOND CHECKING ACCOUNT IN THE NAME OF THE ANC 6A WITHOUT ITS KNOWLEDGE
District of Columbia Code, Section 1-264(b) states:
In March 1996, the treasurer of ANC 6A opened a bank account at NationsBank in the name of Advisory Neighborhood Commission 6A, T/A Urban Risk Project, and deposited $2,544 in grant funds obtained by Jane Mergler into the account on March 16, 1996. According to a review of the bank statements, the address shown on the bank account was the ANC's address at 1341 Maryland Avenue, N.E.3 The tax ID number used for the newly opened account was ANC 6A's tax ID number which was used to establish the ANC's savings account at NationsBank. Additionally, according to a copy of the signature cards obtained from NationsBank, the check signers for the newly opened account were ANC 6A's chairperson, Marshall Williams, secretary, Virginia Gaddis, and treasurer, Hans Moennig.
The authorization of the treasurer to open a second checking account in the name of ANC 6A for the purpose of depositing Urban Risk Initiative grant funds was never presented to the commissioners of ANC 6A for approval. Prior to the opening of the second checking account, this matter was never introduced or debated in a legally convened public meeting of the Commission at which official business was conducted by a quorum of the commissioners Both the ANC law and Commission's by-laws require a public meeting at which a quorum of commissioners are present to conduct official ANC business.
Moreover, the ANC's treasurer and then-chairperson violated D.C. Code, Section 1-264(b), which states: "Each Commission shall establish no more than 1 checking or negotiable order of withdrawal account." In a February 1, 1996, letter to NationsBank, the then-chairperson stated that the ANC 6A treasurer was authorized to establish an Urban Risk Project Account. This provision of the ANC law prohibited the Commission or any officer(s) of the commission from authorizing the treasurer of ANC 6A to open a second checking account in ANC 6A's name for any purpose including providing a "constituent service . . . to a private citizen."
As noted earlier in this report, the Urban Risk Initiative grant funds were not obtained by or for ANC 6A and the proposal used to obtain the grant funds lacked the authorization and support of ANC 6A.
In our review of checks written on the newly opened checking account, checks were signed by only one individual, that of Hans Moennig, treasurer of ANC 6A. If they had been written from an authorized ANC checking account, the ANC law requires signatures of two ANC officers on checks to make disbursements. The second bank account was closed on October 16, 1996. At that time, only $1.00 remained in the account. A cashier's check in the amount of $1.00 was issued to ANC 6A.
The Auditor found that the Urban Risk Initiative project grant funds awarded by the Department of Consumer and Regulatory Affairs (DCRA) to" Urban Risk Project under auspices of ANC 6A(10)" were not 6A's funds. Additionally the use of ANC 6A's name and tax identification number to open a checking account was not authorized by the majority of ANC Commissioners in a public meeting. The grant award was not introduced or debated at a legally convened public ANC meeting prior to the opening of the second checking account.
Advisory Neighborhood Commission 6A's treasurer and chairperson owed a fiduciary obligation to the Commissioners of ANC 6A to immediately disclose to all of them the existence of the grant fund check in the treasurer's possession. It was the responsibility of the full Commission in a public meeting to determine and approve an official decision concerning what would be done with an unsolicited grant fund check. Instead, the ANC 6A treasurer, in disregard of his duty to disclose the existence of this check to the Commissioners of ANC 6A, improperly used the ANC's tax identification number to open a checking account in the ANC's name into which the Urban Risk Initiative grant check was deposited by the ANC's treasurer.
Anthony S. Cooper
1. In a December 1996 letter to DCRA, Jane Mergler and Commissioner DeLeon Ware returned $136.30 of the first payment. The second payment of $636.00 was also resumed to DCRA with the December 1996 letter.
2. Advisory Neighborhood Commission 6A, Transcript of Special "Emergency" Meeting, Thursday, September 26, 1996, Pages 18-25.
3. The ANC office has subsequently moved to 700 Constitution Ave. N.E.
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