Back to City Council nineteenth legislative session main page
|
Columns DCWatch
Archives Elections Government and People Budget issues Organizations |
PRELIMINARY DRAFT COMMITTEE REPORT Background In DC Law 13-38 the Council established the “Children and Youth Initiative” and authorized the Mayor to make grants to a single non-service provider, non-profit organization for the purpose of “providing services to District children, youth and their families, including but not limited to, early childhood development opportunities, safe and enriching centers of learning in and out of school, and other training, recreational and educational services.” (Appendix 2) The by-laws established, pursuant to this law and approved by the Council, created a Board of Directors of seven voting members, with four appointed by the Mayor and three appointed by the Council. The Mayor and Council appear to have each appointed two additional non-voting members with expertise in “related disciplines” to an Advisory Board. The decision on Council appointees has been exercised by the Chairman. Initially, both the Mayor and Council appointed members to thce Trust Board. Soon thereafter, however, the Mayor and Council apparently ceased to appoint new members to the Board - - although non-voting members representing the Mayor and Council remained in place. Between 2001 and 2007 the Board members themselves made appointments as Board members’ terms expired. By November 2007 John Hill and Diane Bernstein were the only members that remained from the original appointees. It is important to point out that the first Mayoral appointments since 2000 were made in December 2007. The first Council appointees since 2000 were made in May 2008, and none have been made since January 1, 2011. In December 2007 Mayor Adrian Fenty appointed two government employees as voting members of the Board - - Victor Reinoso, Deputy Mayor for Education and James Carter, a program analyst in the City Administrator’s Office. This would be the first time in the eight year history of the Trust that government employees would be among the voting Directors of the Trust. By October 2008 there was a substantial leadership change among the Trust Board. (Appendix 3) President / CEO (“CEO”) Since 2000, the Trust has had three Chief Executive Officers. Greg Roberts (2000 – 2008) Millicent Williams (2008 – 2010) and Ellen London (2010 – 2012). FY 2008 Budget Support Act In FY 08, the Trust received $14 million from the Council, $4.43 million of which were identified as “allocations” for specific grantees and activities. Included in that amount was a $400,000 grant for “youth baseball programs”. (Appendix 4) Unlike any of the other 16 grants in which named organizations were associated with specific amounts of funding, the $400,000 was allocated to an activity, rather than an organization. But on August 20, 2007 in response to an inquiry three days earlier from the Trust, Councilmember Thomas’ office informed the Trust that “Councilmember Thomas has a clear direction for the funding.” (DCAG complaint, paragraph 27) The Committee does not know who, if anyone, directed the Trust to reach out to Councilmember Thomas for direction on how to disperse the “youth baseball programs” funds. FY 08 Monitoring and Compliance Requirements For the FY 08 earmarks, the Council made it clear that the Trust should apply its usual and customary requirements. On June 15, 2007 then Chairman Vincent Gray and then Committee on Human Services Chairman Tommy Wells wrote to then Trust CEO Greg Roberts: “It is the intent of the Council that all funds allocated or transferred to the CYITC in the FY 2008 Budget Support Act of 2007 shall be subject to all applicable policies and procedures of the CYITC, and, in addition to supporting programmatic activities, shall be used to support capacity building, monitoring and oversight activities as applicable. …..all funds designated to the Trust … shall be subject to fiscal management and administrative oversight fees normally allocated for these services by the Trust.” (emphasis added)(Appendix 5) On August 9, 2011, the Committee asked the Trust to provide a copy of the policies and procedures in place in FY 2008 for the review and verification of grants. The Trust replied: “While the Trust did require grantees to comply with certain oversight requirements, it had not yet drafted its formal, written policies and procedures manual. Rather, the relationship between the grantee and the Trust and the terms of the grant typically were set out in the grant agreement”. Thus, the provisions in the specific grant agreements were very important. (Appendix Committee Inquiries) Implementation of the Grant Agreement “Let me get this rolling” On December 7, 2007 a grant agreement for “youth baseball programs” was signed in the amount of $392,000 between Greg Roberts, CEO of CYITC and Marshall Banks, Executive Director of Langston 21st Century Foundation. The grant agreement expressly outlined the scope of services, target population, performance standards, reporting requirements, accounting systems, Webstars, outcomes monitoring study, expenditure restrictions, accounting and audits, payment, staff requirements, facility requirements, data rights, legal provisions, insurance, default or termination of grant agreement, and changes to agreement. (Appendix 6) In addition to the reporting requirements included in the individual grant agreements, the Trust also had the FY 08 Program Report and Financial Report Compliance Timeline and Program Site Visit Observation Tool. The document concludes with the note: “All program and financial reports and enrollment and attendance data must be entered via WEBSTARS” - - a requirement also contained in the Langston grant agreement. From the start, it became apparent that communications and reporting on the Langston grant would be with someone who was not a signer on the grant agreement. Communications came - - without any apparent objection by the Trust - - from the office of Councilmember Thomas. We are not aware of any other instance when a Councilmember - - not the grantee organization - - handled reporting on a Trust grant. By July 2008, Ellen London was referring to the earmark as the “Harry Thomas ‘baseball funds’” (see Appendix 12) On December 18, 2007 - - just days after the grant agreement was signed - - Neal Rodgers (Councilmember Thomas staffer) sent an email to the Trust with the question: “In reference to the $00k he would like to forward the first ¼. How should we proceed”? Ellen London, Director of Communications and Government Relations replied: “Let me get this rolling – should be no problem”. (Appendix 7) On January 9, 2008 Neil Rodgers emailed two documents to the Trust containing the “work plan Langston” and “Budget request Langston golf”. In the body of the email Mr. Rodgers asks: “How soon can we get the first check?” Ms. London forwarded the email to Arlene Williams, the Trust program officer assigned to the Langston “swing sport program” with the statement: “Hurry, hurry…” Surely mindful of Trust procedures, the Trust’s Vice President for Finance responded the very next day requesting a “detailed budget narrative that explains … each budget line item and how the figure was derived”. (Appendix 8A) On January 15, 2008 Mr. Rodgers emailed the Budget Request Form to the Trust. (Appendix 8B) On January 22, 2008 Mr. Rodgers emailed the “budget narrative” with inquiry: “Councilmember wants to know what day this week he can send Jimmy Garvin to pick up the check.” It is assumed that the reference to “he” was meant to refer to Councilmember Thomas, himself. (Appendix 8C) Within two and one half hours, Ellen London replied: “Okay – let me get an answer in the morning.” Presumably there could not have been any time to review the narrative to see if there had been compliance with the request of the Vice President for Finance. First Payment, $100,000 Two days later, on January 24, 2008 $100,000 payment was made by the Trust to Langston. At the February 27, 2012 Committee performance oversight hearing, Ellen London, whose title in 2008 was Director of Communications, External Affairs and Government Relations, testified that advancing 25% of a grant for “start up” was the Trust’s policy in 2007 - 2008 and remains the policy today. This statement is corroborated by a July 7, 2008 email exchange between Ms. London and a member of Councilmember Wells’ staff. In the email, Ms. London outlines the standard payment and reporting schedule for grants and earmarks in 2007 – 2008. A calendar identifying the time period for each quarter and deadline for the quarterly report that was provided each grantee was submitted to Councilmember Wells. Ms. London writes, “We advance quarterly payments, with this reporting schedule. So they receive 25% upon signing the contract, a second 25% in February, a third 25% in May, a 15% payment in July and final payment of 10% in October when all final reports have been submitted. Again - - this assumes excellent grantee compliance and performance. If they are out of compliance, the schedule is adjusted - - both time and amount, if the issue is ADA.” (Average Daily Attendance) (Appendix 9) Several community groups that received grants and earmarks in 2007 – 2008, including Sasha Bruce Youth Works, Latin American Youth Center and DC Scores, have testified to the Committee that the Trust actively enforced these reporting requirements and schedule. For example, we know that Keely’s Boxing and Youth Center grant agreement was suspended for lack of documentation, and final payment was withheld in December 2008. Second Payment, $96,000 (January – March, 2008) A $96,000 payment was issued by the Trust to Langston on May 14, 2008 based on the submission of a first quarter report. (DCAG complaint (paragraphs 40, 43 and 44) (Appendix 10) But what was the quality of the information reported? The First Quarterly Report for the period January 1 through March 30, 2008 came to precisely $100,000. $60,000 of which was for “supplies/equipment.” The most cursory review of that report - - something which surely the Trust was capable of doing - - shows virtually NO detail and NO documentation. For example, $13,960 was spent on “40 units” of “swing-away 2000” at $349.00 per unit. No explanation was given of what the 40 units of “swing-away 2000” were. Also, $16,227.50 was reported as spending for “500 units” of “Training program curriculum CD and training cards.” - - again, totally ambiguous and lacking an explanation. It is clear, however, that $3,900 was spent for 100 hammers at $39.00 each, but nothing was said about what this had to do with “youth baseball programs.” The math is even bad, totaling only around $58,472.50 where $60,000 is claimed for “supplies and equipment”. There is no evidence of any review of this report by Trust staff, or, if such a review occurred whether any questions were raised. Since the second payment was made on May 14, on a report submitted on May 8, it is fair to conclude that this report - - highly questionable on its face - - somehow passed muster with Trust staff. Otherwise, payment would have surely been delayed. Councilmember Thomas’s staff was certainly aware of the level of detail that was required for the quarterly report. A March 20, 2008 email between Ms. London and Councilmember Thomas staff indicated the documentation needed in order to issue the payment. Neil Rodgers wrote: “Is there a form that Langston needs to complete following their first quarter in order to release the second quarter”? Ms. London responds: “Supposed to be ‘on line’ in the Webstars program, but I will have to see if they have been set up in Webstars at this point…” London goes on to cite “Reporting Requirements” as stated in the Grant Agreement which include the following requirements:
Just several weeks later, seemingly as if those instructions were neither received nor read, Mr. Rodgers contacted the Trust’s Finance Vice President asking: “anything else necessary for Langston 21st Century to draw down their next apportionment?” Not surprisingly, the V.P. for Finance replied: “…Langston will need to submit a quarterly program and expenditure reports (0ctober – December and Jan-Mar) to trigger the next payment for the grant.” (Appendix 11B) To date, the Trust has not confirmed to the committee whether any information was ever entered by Langston into Webstars during the grant period. At the February 27, 2012 performance oversight hearing several grantees and community groups that received earmarks during this same time period testified that entering data and reports into the Webstar system was mandatory. “Get In Compliance” On July 7, 2008 - - weeks after the Council approved the FY 09 budget containing many earmarks - - Councilmember Wells’ staff contacted the Trust to request the status of “granting all around - - but the earmarks in particular.” On July 8, 2008 the Trust’s V.P. of Finance wrote to Ms. London: “Langston has received 50% of the earmark and they are submitting quarterly reports also. There is no reference to any posting in Webstars by Langston. (Appendix 12) As a result of Councilmember Wells’ inquiry, on July 16, 2008 the V.P. of Finance wrote the following email to all program managers: “All, Attached is a list of the current Earmark Grantees and their status as of yesterday…..review the list and if one (or more) of you (sic) grantees is out of compliance, then we need to get them back into compliance quickly or they will not received (sic) their next payment.” The attachment listed twenty organizations with a number of them appearing not to be in compliance. (Appendix 13) Langston looked more compliant than others, since it was simply noted “waiting for 3rd quarter report.” But in fact the reports then to date were highly questionable, and nothing had been entered in Webstars. In consequence, someone reviewing the list might have had little or no cause of concern about Langston. The Vice President for Finance indicated there would be no payments without compliance. The extent to which that happened is not entirely clear, though the Trust has reported that 17 of the 20 grantees were successfully brought back into compliance and paid in full with their grants extended into 2009. We have requested additional information on this, but no response has been received to date. However, the documents the Committee has reviewed would suggest that Langston continued to be paid without regard to compliance or documentation. Third Payment, $100,000 (April – June, 2008) A $100,000 payment was made by the Trust to Langston on October 8, 2008 based on the submission of a revised second quarter report. (DCAG complaint paragraphs 50, 51, and 52) (Appendix 14) But once again, the quarterly report (from Councilmember Thomas’ office) for the period of April 1 through June 30, 2008 was entirely lacking in detail and documentation. There were no attachments at all to detail any of the $100,000 in claimed expenditures. The near total absence of justification finally sparked concerns by Trust staff. Highlights of the internal email discussion among Trust staff include:
But that did not happen. Curiously, two days later, on October 8, 2008, one payment in the amount of $100,000 was made to Langston rather than two payments each in the amount of $50.000. The Committee has been given no explanation for the change or who authorized it. In response to the June 24, 2011 inquiry from the Committee regarding the October 8, 2008 payment, Ms. London wrote on July 11, 2011 “…it appears that, following submission of the October 1 report the Trust questioned elements of the report and asked for a more detailed categorization of expenses. In response, on October 7, 2008, a supplemental expenditure report was submitted.” Final Payment, $100,000 (July – September, 2008) Check on Demand Kind of Place A $100,000 payment was made by the Trust to Langston on December 12, 2008 based on the submission of a third quarter report. (Appendix 16) The “final report” was every bit as skeletal and questionable as all prior reports. Apparently, whatever questions Trust staff had raised on the earlier reports had no impact whatsoever. The report contained simple totals for expenses (e.q. $72,400. for “salaries and wages”) with no detail at all. Once again, some reluctance was expressed by the Trust staff but was overriden by CEO Williams. Highlights of the internal email discussion among Trust staff include:
What then followed was a lengthy discussion among Trust staff regarding the requirement to file a final report which would document the expenditure of the entire $400,000 grant. The V.P. for Finance was frustrated with the failure of Mr. Rodgers to comply with final report requirements. The following exchange occurs between Ms. London and the V.P. for Finance.
“I guess I am the keeper” According to a January 25, 2008 document listing all program officers and grantees, Arlene Williams was the Trust program officer at the beginning of the contract. (Appendix 17E) However, by March 11, 2008, upon a request from Neil Rodgers to Ellen London: “What do we need to do to proceed with releasing the next portion for the Swing Sport Program at Langston?” there was confusion to whom Ms. London should direct the inquiry. Ms. Williams had apparently left the Trust between January and March. In an email exchange between Ellen London and Jacquelyn Lendsey, V.P. for Programs and Communications on March 11, 2008 concluded: “Then I guess I am the keeper. I will work on it tomorrow”. It is important to point out that Ms. Lendsey was not copied on the December 10 email exchange above. Ms. Lendsey may have left the Trust between November and December 2008. (Appendix 17F) Additionally, in the February 26, 2009 performance oversight hearing we posed this question: “What is the evaluation process for programs that receive earmarked funds? The Trust responded: “Each organization is assigned a program officer, who works with the organization as they develop a work plan and budget. When the work plan and budget are approved, the organization signs a contract with the Trust that outlines the performance measures, reporting requirements, and payment schedule. Throughout the year, the program officers monitor the performance of the grantee based on the agreed upon work plan and benchmarks through Webstars reports and an annual site visit.” That is hardly a description of the process of the Langston contract. On the next day, the fourth quarter report is sent to the Trust.
“ONE FINAL CHANCE” On December 12, 2008 - - without detailed justification or webstars data ever being posted - -the same day as the final payment was being issued to Langston, a Senior Program Officer at the Trust issued a memorandum listing 24 FY 08 grantees that were out of compliance “with respect to their attendance”. The memorandum stated, “In order to give these organizations every opportunity to receive final payments, the FY 08 Year Round folder for WEBSTARS has been unlocked to allow these grantees “ONE FINAL CHANCE to reach compliance.” (Appendix 19) Curiously Langston was not listed among these organizations. Again, there was a clear inconsistency on how the Trust treated that funding. Pressure on the Trust There is evidence of political pressures on the Trust. For example, in April 2007 program officers were expressing frustration regarding the difficulty in obtaining timely and detailed reports from the Peaceoholics. According to Ellen London, an April 2007 meeting was convened by former DC Attorney General Peter Nickles in his office with the grantee, then CEO Greg Roberts, a Senior Program Officer, and Ms. London. The meeting lasted less than ten minutes. Ms. London did not know who requested the meeting, but it is likely that it was the grantee. As the meeting began, Mr. Nickles asked: “What are we doing here”? “What’s the problem”? Mr. Roberts responded: “Everything is fine”. Ms. London recalls her astonishment at Mr. Roberts’ statement, given there had been ongoing problems with this grantee. Even though they agreed to continue working with the grantee, according to Ms. London the grantee’s reports did not improve and payments continued. Two years later the Trust terminated a Peaceoholics’ grant agreement for failure to submit timely and detailed reports on a different grant agreement. Ms. London remembers that Mr. Nickles left the very brief meeting saying: “Why am I here?” It surely must have been obvious that the purpose of the meeting was to send a message to the Trust, and that they had gotten it very clearly. On February 14, 2008 Diane Bernstein, one of the original Trust Board of Director’s testified at a Public Oversight Hearing, “It is very intimidating from this side of the city to be beset by constituents who would like to be heard and receive funding and to have allies . It is also intimidating from our point of view to get a request from the Council, from whom we are fed, and to say ‘NO’” (Appendix 20) DC Auditor Findings on FY 2009 The DC Auditor issued a February 24, 2010 report “District’s Earmark Process Needs Improvement”. The audit reviewed the 154 FY 09 earmarks (the year after the Langston contract ended) totaling $47,922,000. Among those included 47 earmarks totaling $8,860,000 that were assigned to the Trust for management. The audit made several recommendations to District agencies and the Trust, including requirements that potential grantees are in good standing with the Office of Tax and Revenue and that potential grantees are registered with the IRS as a 501(c)(3) organization, etc. The Auditor also found that the FY 2009 BSA approved a 3% earmark administrative fee for the Trust to cover administrative costs for the 47 grants. Collectively, the Trust collected $265,800. At the same time, five earmarks were not distributed to the designated recipients. These earmarks totaled $276,450 and the Trust kept that money. Thus the FY 09 added more than $500,000 to the Trust’s assets. At the April 23, 2012 Trust Budget Oversight Hearing the Committee learned that $1.1 million in unspent funds from FY 2008 was “found” in April 2011. Those funds are being used to fund the Trust’s summer program in 2012. Similarly, the Trust “found” unused FY 2009 funds to fund the 2011 summer program. We have asked whether DC government approval of the Trust for not returning these funds was either sight or received. The Trust has advised the Committee that the FY 2010 Audit will be available in June 2012. Council Action In 2011 the Council passed legislation ending earmarks and requiring all grants to be competitively bid. In November 2011 the Trust Board of Directors approved the “FY12 Grants Management and Training Policies and Procedures Manual” which includes in-depth descriptions of the grants management systems and trainings in place in FY12. Confidentiality Request The Trust has requested that all email and other information related to this inquiry examination remain confidential. The Committee Chairman was sensitive to the request, and sought guidance from the Council’s General Counsel. On January 24, 2012 the Chairman was informed by the Council’s General Counsel V. David Zvenyach that, “The Committee is under no legal obligation to maintain the requested confidences, though you could choose to do so. Moreover, in the event that there are findings that you believe should be made publicly available, you are under no obligation to first notify CYITC of the findings”. (Appendix 21) We have decided to disclose all relevant information received. On January 26, 2012 Council Chairman Kwame Brown wrote a letter on behalf of “law enforcement agencies” requesting that all Councilmember’s “avoid requests for information” about CYITC past transactions until at least May 1, 2012. Given oversight responsibilities, and the pre-existing still ongoing inquiry, the Committee Chairman sought clarification. On January 31, 2012 Chairman Brown clarified the statement and authorized the release of any findings that were obtained prior to the January 26, 2012. : “As I indicated to you orally, I see no objection to the release of your report or providing information about what findings you have already made …The limitation is prospective”. (Appendix 22) We have proceeded on the directive and assurance. |
Send mail with questions or comments to webmaster@dcwatch.com
Web site copyright ©DCWatch (ISSN 1546-4296)
