Officials at a Gretna nonprofit agency wrongly used tens of thousands of dollars of public money to pay themselves and family members for services — part of more than $130,000 in Jefferson Parish and federal money that may have been spent improperly, according to a report from the parish Inspector General’s Office.
The audit of the organization, which was released Wednesday night, is the first to be issued by Inspector General David McClintock’s office since he was hired in early 2013.
The parish contracted with Louisiana Community and Family Services to provide summer enrichment programs for at-risk students.
The audit found that between 2011 and 2013, the nonprofit may have violated the law by racking up expenses that it did not justify and may have been paid for services that were not provided.
The report also raised questions about the parish’s monitoring of its agreements with nonprofits, which frequently receive federal and parish funding.
The IG’s Office said it has forwarded the information in the report to the District Attorney’s Office.
The organization received money from the parish through the federal Community Service Block Grant program, which gives money to local governments to provide services related to poverty; the Jefferson Parish Community Action Program; and the discretionary account of Parish Councilman Mark Spears.
Spears said Thursday that he had no knowledge of any problems with the nonprofit when he authorized funding for its programs.
Officials at LCFS did not return calls Thursday.
The audit questions a wide range of spending by the organization, which was authorized to receive up to $207,000 from the parish and did not keep public and private funds separate, as it was required to do.
More than $22,000 was used to pay for meals for students provided by AA&D Catering, a company operated by Annette Dixon, the nonprofit’s secretary and the sister of Calvin Kelly, its vice president. That’s barred by federal rules that prohibit board members and their family members from receiving money from the program.
Another $2,900 was paid to a family member of an officer of the organization for other meals at a summer camp, according to the report.
The organization also paid $450 to Kelly Enterprises, a company owned by the organization’s president, Chermaine Kelly, and vice president, Calvin Kelly. Officials with the organization told investigators that the money was repayment for a loan.
The nonprofit also paid Calvin Kelly $61,000, an amount the organization said was used to pay salaries, meals and transportation as part of its 2012 program. However, the Inspector General’s Office found there was no documentation to prove that was how the money was spent.
Another $4,900 went to Chermaine Kelly to reimburse her for expenses related to field trips, according to the report.
The report also found issues with reimbursements made by the parish. About $35,600 was allocated to LCFS to pay for salaries, but the organization was unable to provide evidence that the money had been paid to employees, according to the report.
The parish also did not obtain receipts for $7,000 in reimbursements paid from Spears’ discretionary account, according to the report.
Spears said the problems identified by the report fell on the parish’s administration, which he said should have monitored the program, and noted that it is common practice for council members to provide funds for programs in their districts.
“I have no control after I give the money what happens to the money,” Spears said.
The parish also paid the organization about $5,370 after receiving a fake invoice for transportation, according to the report. The Inspector General’s Office contacted the company that supposedly provided that service and was told that no services had been provided, according to the report.
Chermaine Kelly told investigators that the invoice had been faked by one of the organization’s secretaries but that she would not name that person until an internal investigation was completed, according to the report. Asked about it a month later, Kelly told investigators by email that the invoice was “submitted in error.”
“An investigation within the organization is currently taking place,” she said. “I take responsibility for signing the invoice without thoroughly reviewing the documents. Transportation was provided for the field trips; however, I was only able to recover the quotes.”
After contacting several transportation companies, investigators were able to verify only about $1,230 in travel costs.
Other issues identified in the report include payments for meals at restaurants, for utility and phone bills, and for the purchase of computers that were used for purposes unrelated to the program.
The audit makes a range of recommendations, including requiring parish departments to review receipts before making reimbursements, requiring proof of payments and assigning employees to monitor agreements with outside entities. The report also calls for parish employees to specifically review nonprofits’ payments to vendors to ensure the money is not going to relatives of those involved in the organization.
In a letter responding to the audit, Parish Attorney Deborah Foshee said some of the issues raised had been resolved before the report was issued. That includes a 2013 revision to the parish’s procedures for handling agreements with nonprofits that requires more documentation of expenses.
The parish also is revising its policies and procedures for the approval of pay requests and developing systems to ensure organizations are complying with the parish’s regulations, Foshee said.
Follow Jeff Adelson on Twitter, @jadelson.