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Updated, 4:01 p.m.
NORWALK, Conn. A lack of answers in the face of disturbing news has led to a proposed cut in funding to a Norwalk nonprofit, according to Mayor Richard Moccia.
A recently released federal government audit indicates that Norwalk Economic Opportunity Now, a private nonprofit organization that works to reduce the conditions of poverty in the greater Norwalk area, misused $400,000 in federal funds intended to support the Head Start program in the Norwalk.
"We accept and fully understand the recommendations and findings and we have, and are, taking appropriate action," Gregory Burnett Sr., chairman of NEON's Board of Directors, wrote to the Office of the Inspector General in response to the audit.
Moccia said he was not happy with the reaction. "The report disturbed me, but the reaction disturbed me even more," he said. "To say we accept it? Well, what choice did they have except to accept the report?"
Joseph Mann, NEON's president and CEO, and former finance director Chip Anderson were asked many questions at a Jan. 24 grants review committee meeting, but answers were not forthcoming, according to minutes provided by City Clerk Erin Halsey.
"There are a lot of questions that we have asked over the last six weeks about their financing, from the grants committee and even prior to that with some requests, and we have not received a single answer," Moccia said. "They receive millions of dollars in local taxpayer money, not counting federal and state, and I need answers, and I don't see them coming forth."
The city has not included grant money to support NEON's administrative expenses in the recommended budget for 2012-13. The money for Head Start ($937,875) has been moved from grants expenditures to the contingency fund, and the $389,500 grant for NEON's administrative expenses has been eliminated.
Mann did not return a phone call asking for comment about the audit and other issues. According to minutes for the grants committee meeting, Mann said he could not answer questions about the audit at the meeting because it hadn't been made public yet. He also did not answer questions about an unrelated matter, a $150,000 loan to CTE Inc., the Community Action Agency for the Greater Stamford Area, with which NEON is planning a merger.
"Why would you loan an organization that basically is bankrupt in Stamford $150,000 and when and how are you going to get it paid back?" Moccia asked.
The city is researching the state laws under which NEON was formed, looking to see what powers Moccia has in regard to the agency. "I don't think I have many," he said. "I can't just walk in there and say, 'I'm taking over the board.' But I'm certainly not going to give them $1 million of the taxpayers' money to an organization whose best answer is, 'Oh we accept the fact that we did wrong.' It's not an answer, and there's other questions aside from the early childhood, about the other operations on the other side."
He learned recently that NEON operates a halfway house in Waterbury for women who have been incarcerated in Niantic Prison and their children under the age of 5. He agreed that's a good cause but wondered why Norwalk money was going to Waterbury.
Scott Harris, director of criminal justice programs at NEON, did not return an email asking for comment.
The federal government wants the misspent money back and so does Moccia. Asked where the nonprofit would get the money in hard economic times, he referred to another unanswered question. "They had property on Orchard Street that Stanley Seligsen bought for his redevelopment project," he said. "They received $575,000 for it. I asked it where that money was. They said they used $150,000 of it to loan to Stamford, which still means they have roughly $420,000 there."
More than $400,000 in misspent money is more than an administrative mistake, he said.
"I'm still waiting for some answers from the board, what's being done to correct it," he said. "We still don't have answers on this merger with CTE, so I'm going to be seeing what action the board is going to be taking. In the meantime, I assume the feds are going to say Head Start is going out to bid again, I don't think they're going to automatically renew them. We'll see."
Correction made, 4:01 p.m.
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