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Valley Youth Services Facility Reopened May 1 After State Closure: ACCOUNTING: Most Problems Were Found in Record Keeping.

Posted on: Wednesday, 10 May 2006, 12:07 CDT

By Becky Stoppa, Anchorage Daily News, Alaska

May 10--WASILLA -- The Saxton Youth Shelter is up and running again after some bookkeeping problems closed the facility for more than a week.

Its sponsoring organization, Kids Are People Inc., voluntarily suspended its services April 21 at the request of the Department of Health and Social Services, according to Bill Hogan, deputy commissioner of health and social services.

Hogan said Kids Are People had had money problems for a few months. Many of those problems were brought to light when the state began the licensing process for Changes, a residential psychiatric treatment facility for boys, which the nonprofit had hoped to open in December 2005.

"Simply put, they needed to do a better job of tracking how grant money was spent," and ensuring that funds granted for specific programs went to those programs, Hogan said.

The state was also concerned about a loan Kids Are People secured through a local lender, he said. "Having run a nonprofit, I know that what you don't want to get into is continually borrowing to pay for operational expenses."

In addition, he said, the state worried that Kids Are People's six-member executive board was too small to provide adequate oversight. An effective board usually consists of at least nine members, he said.

The state's mounting concerns led it to audit Kids Are People's books in April, Hogan said. That audit revealed nothing serious, he said. "What we found for the most part was just poor record keeping."

But the resignation of Kids Are People executive director Rich McGill on April 20, shortly after the audit, raised additional concerns. There was some contention that McGill received a severance package or a severance bonus as he was leaving, Hogan said.

"The number I've heard is $25,000. If you're an organization that is struggling financially, why would you give your outgoing director a bonus?" he said.

That final action led the state to call on the nonprofit to temporarily suspend all of its state-funded services and programs, Hogan said. Those include the Saxton Youth Shelter on Spruce Road, which serves homeless and runaway youths and youths in crisis, as well as providing a tobacco prevention program and an abstinence education program.

Linda Reimer, Kids Are People's interim director, deferred questions about McGill's severance package to the executive board. None of those members could be reached Friday for comment.

Reimer said the organization is working to address any concerns the state has. Its executive board has grown by two members in the past two weeks, and there are a few strong contenders for a ninth member, she said.

Hogan said he senses that Kids Are People is already in a better position to provide oversight. The state issued the nonprofit a provisional 60-day license, and the shelter, along with the other suspended programs, reopened May 1.

In order for state funding to continue, Hogan said, the organization must prepare an agency-wide budget and a budget narrative detailing how it arrived at its numbers and how it is funded. In addition, he said, it must prepare detailed staffing information and outline a plan to repay its loan.

And it must ensure that its bookkeeping practices meet professional standards, Hogan said. To do so, it must either contract with a professional bookkeeper or hire one with professional experience.

Neither the Juvenile Assessment Center nor the Transitional Living Center, which are also sponsored by Kids Are People, was impacted by the temporary shutdown, Reimer said. And, despite the recent trouble, the quality of all the nonprofit's programs remains high, she said.

"My most important concern is that the parents and the children of the community know that our facilities are open," Reimer said. "At no time was there any concern expressed for the care of the youth that we serve."

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Copyright (c) 2006, Anchorage Daily News, Alaska

Distributed by Knight Ridder/Tribune Business News.

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Source: Anchorage Daily News

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