Lutheran Services Florida sued
A former official says he was fired for blowing the whistle on mismanaged federal grants.
By CANDACE RONDEAUX
Published September 15, 2005
TAMPA - When it comes to statewide charities, it's hard to beat the numbers for Lutheran Services Florida. A large nonprofit agency, it has served 700,000 people since its inception 23 years ago. With 60 social service programs under its management, Lutheran Services reported about $29-million in total revenue last year.
But now a former top executive claims Lutheran Services' numbers don't add up.
In a lawsuit filed last week, Dr. Peter Ledecky, the agency's former vice president of program services, alleged that Lutheran Services has for years been mismanaging millions in government grants for its programs.
Filed in Hillsborough Circuit Court Sept. 7, the complaint accuses the agency of firing Ledecky in retaliation for blowing the whistle about what he contends are accounting improprieties at Lutheran Services that violated state and federal law.
"He realized that the administration of the grants was a giant mess, that they just basically wanted him to smooth things over and cover things up," said Ledecky's attorney, Ryan Christopher Rodems. "He said he couldn't do that, and they pushed him out the door."
Lutheran Services CEO James Wells said Wednesday that he had not yet seen the lawsuit and could not comment on the allegations.
After working 17 years as a medical doctor, five years with the state's Department of Children and Families and later for Catholic Charities, Ledecky said he was practically born for the job with Lutheran. A former refugee who escaped to the United States from Communist Czechoslovakia in 1964, he could well appreciate the agency's mission to assist refugees and immigrants.
Lutheran Services hired Ledecky, 61, to be its southwest Florida regional director in 2002. In time, he told the Times , he helped expand Lutheran Services' reach across the state. Higherups noticed, Ledecky said. He was promoted to the newly created position of vice president of program services in 2004, according to the lawsuit.
About a year after his promotion, Wells tapped Ledecky to review the agency's books and to make sure its accounting practices were in order, the suit says.
Ledecky says he soon discovered multiple instances in which Lutheran Services was keeping surplus grant money left over in its programs instead of returning the money to the government agencies that issued the grants, as required by law. He said he believes agency executives knowingly fabricated losses and hid surpluses to make it look as if the budget were balanced.
"There were hundreds of thousands of dollars coming in surpluses, and those funds were not returned," Ledecky said. "I tried to convince them (Lutheran executives) that the funding belongs to the taxpayers, and that it should be returned to the government agencies."
Last year, Tampa-based Lutheran Services assisted nearly 31,000 people around the state, according to its 2004 annual report.
The church-affiliated agency is open to all clients regardless of religion and serves children, refugees and the elderly. Its long list of services includes a Hea d Start program and several youth shelter and refugee resettlement programs around Florida.
The programs are largely funded by government grants. The agency received $24.7-million in such funds last year, accounting for nearly 84 percent of its 2004 revenues, according to the report.
Ledecky said Lutheran billed and received funding from the Department of Health and Human Services for a residential youth shelter program in Immokalee that was not yet operating.
Plus, two employees of another program funded by the Florida Department of Juvenile Justice were placed on the payroll of the federally funded program. That created a surplus of funds for the state juvenile justice program and padded the payroll of the federal program for a shelter that didn't even exist, the lawsuit alleges.
Juvenile Justice Department spokesman Tom Denham said his agency was unaware of the lawsuit and could not comment until attorneys had reviewed the case.
Ledecky said Wells initially appeared unsettled by the allegations and vowed to look into them. But when the former vice president appealed to Wells again after no action was taken and later also brought the matter to the attention of Lutheran's board chairman, Roger Sellew, they balked and told him "nobody can tell us how to spend our money."
"I was very surprised because I always thought Lutheran Services Florida was on of the state's best social services agencies. But unfortunately their fiscal procedures are mismanaged and they are unwilling to change them," Ledecky said in an interview. "It would be totally unfortunate that 480 dedicated employees that work long hours could be punished because two people are acting in appropriately."
--Times researcher Cathy Wos contributed to this report. Candace Rondeaux can be reached at 813 226-3337 or firstname.lastname@example.org