Foren­sic au­di­tor asked for records on Head Start

CAO’s use of fed­eral dol­lars was fo­cus be­fore com­pany’s work was halted

The Buffalo News - - FRONT PAGE - By Matthew Spina and Mary B. Pas­ciak

A spe­cial ac­count­ing firm hired by con­cerned board mem­bers at the Com­mu­nity Ac­tion Or­ga­ni­za­tion was seek­ing spe­cific records on the agency’s use of fed­eral dol­lars for Head Start pro­grams when it halted work on its foren­sic au­dit.

While the CAO’s chief ex­ec­u­tive has pub­licly as­serted that the au­di­tor was never hired, a con­tract and emails ob­tained by The Buf­falo News show that Chi­ampou Travis Be­saw and Kershner, or CTBK, be­gan its “en­gage­ment” with the com­ple­tion of a con­tract in early De­cem­ber and a re­quest for records one week later.

But CTBK never is­sued an au­dit. The firm ended its work in Jan­uary, days af­ter CAO’s pres­i­dent, trea­surer and four other di­rec­tors were dis­missed from their po­si­tions. At least four of the dis­missed di­rec­tors had tried months ear­lier to fire the long­time CEO be­cause, in­ter­nal cor­re­spon­dence shows, they wanted more data than he typ­i­cally pro­vided about the agency’s $51 mil­lion in an­nual spend­ing.

On its web­site, CTBK tells prospec­tive clients about its abil­ity to per­form foren­sic au­dits, which are in­tended to de­tect fraud. But the Com­mu­nity Ac­tion Or­ga­ni­za­tion’s CEO, L. Nathan Hare, ar­gues that the agency’s reg­u­lar ac­count­ing firm, Szymkowiak and As­so­ciates, ex­am­ines the agency’s books ev­ery year and pro­vides its re­ports to state and fed­eral reg­u­la­tors.

Szymkowiak each year ac­counts for the non­profit agency’s in­come and ex­penses, as­sesses its client’s own in­ter­nal con­trols and sug­gests im­prove­ments. Szymkowiak’s au­dit for the fis­cal year end­ing in Fe­bru­ary 2018, which is the most re­cent au­dit that CAO has made pub­lic, iden­ti­fied no prob­lems with the agency’s in­ter­nal con­trols, but it was lim­ited in scope.

How­ever, some CAO board mem­bers, sus­pi­cious about the use of some funds, de­cided in late 2018 they wanted the agency to un­dergo a foren­sic re­view.

Hare has crit­i­cized The News for re­port­ing – wrongly, he says – that the board hired a sec­ond firm to fur­ther ex­am­ine the fi­nances. “No sec­ond out­side au­dit was started,” he said in a let­ter to his staff ad­dress­ing the news­pa­per’s ar­ti­cles.

When The News asked for a copy of the con­tract with CTBK, Hare said there wasn’t one.

“CAO never signed such a con­tract and has never seen such a con­tract,” he told the news­pa­per in an email on March 19. “If any­one en­tered

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.