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Audit challenges group's grant money

The head of the Pasco-Hernando Early Learning Coalition blames a nonprofit organization for a problem with contributions.

By REBECCA CATALANELLO
Published August 3, 2005

The Pasco-Hernando Early Learning Coalition may have to pay the state $695,854 in improperly obtained grant money, according to a new audit.

The finding was one of several detailed in a new report issued by the Office of Early Learning, the state agency responsible for implementing prekindergarten programs.

In order to receive state grant money, the coalition every year must raise matching funds from Pasco County and the United Way. Althoughpart of this contribution must be in cash, a substantial portion is allowable as in-kind services.

The problem, the state says, is that the contributions the coalition has reported as in-kind from the Pasco County School Board for at least the past three years do not qualify. That's because the School Board did not provide the coalition any service it was not already providing to the public, auditors wrote. Coalition executive director Jim Garrett said the fault lies with Youth and Family Alternatives, the nonprofit organization contracted to organize the grant every year.

"YFA was reporting an in-kind match that never existed," Garrett said.

YFA executive director George Magrill was unavailable for comment. YFA chief financial officer Donna Gramling said she was still reviewing the audit and it was too early to comment. But in the past few weeks, both Gramling and Magrill have defended the method for obtaining that match money, saying that in 10 years of processing the grant, independent auditors, the state and the coalition never questioned it.

Garrett said it's too soon to say how the coalition will remedy the matter, but much depends on whether it was an intentional error on YFA's part or an unintentional mixup.

The Office of Early Learning says the $695,854 tied up in the dispute should be returned to the state, or else the coalition may request an "alternative remedy" to repaying the debt in cash. State spokesman Warren May said an example of an alternative might be presenting a plan for gradual repayment by reducing future administrative overhead.

If YFA had to pay the full cash amount in question, Garrett said, it would be "devastating" to that organization.

Among other findings:

School Board spending: The Pasco County School Board spent $43,318 in state grant money on meals and medical services for children from needy families instead of on salaries and benefits as was required under the terms of another grant.

School officials say this finding is incorrect and that the $43,318 for meals and medical attention actually came from another funding source within the school district.

Assistant superintendent Sandy Ramos said school officials were in contact with Office of Early Learning to try to clear up the facts behind the finding.

"We don't think we should have to defend misspending when we haven't misspent," Ramos said.

Garrett said that while the state audit suggests the School Board must repay that money, he was hopeful the matter would be an easily correctable accounting error.

Poor governance: The coalition lacks sufficient policies for efficient governance. "The board's decision-making process is compromised by inconsistent practices" regarding who can vote and what compromises a quorum, the auditors wrote.

The Office of Early Learning review was actually sparked by publicized infighting on the coalition board, particularly among some board members, the Pasco County School Board and Garrett.

Auditors suggested the Pasco-Hernando Early Learning Coalition make strides to clearly delineate Garrett's responsibilities from those of the governing board.

The coalition met last week in a daylong retreat to try to smooth out some of its difficulties.

Garrett said he expected the coalition board would call a meeting shortly to discuss the Office of Early Learning's 24-page audit. The coalition has 30 days to respond to the findings.

[Last modified August 3, 2005, 00:36:17]