Audit Questions Thomas Nonprofit DCYITC

Says It Did Not Verify Recipents and Gave Grants Before Documentation Filed

By Mark Segraves
|  Saturday, Feb 23, 2013  |  Updated 7:59 PM EDT
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An audit of the nonprofit used by former D.C. Councilmember Harry Thomas Jr. to steal hundreds of thousands of dollars calls into question millions of dollars in grants and paints a picture of an organization that was rife with "material weaknesses" and "deficiencies" and was out of compliance with several requirements for nonprofits receiving federal and local funds.

According to a 28-page financial statement obtained by News4 that is part of an audit for the 2010 fiscal year, the D.C. Children and Youth Investment Trust Corporation awarded more than $3 million in grants without verifying whether the grant recipients had been debarred from doing business with the federal government.

Auditors also found DCYITC awarded grants before documentation for the grants had been received. Additionally, DCYITC could not provide supporting documentation for several of the grants auditors reviewed.

DCYITC is overseen by the District government and charged with directing public and private funds to worthy groups in the city.

The nonprofit was at the center of the corruption scandal that resulted in Thomas being sent to prison and its former Executive Director Millicent West pleading guilty to tax fraud.

The financial statement has only brief mention of the Thomas incident and does not mention him by name, noting, "The fraud occurred due to the direct actions and intent of the D.C. councilman. The fraud was also determined to have occurred over multiple years."

The report makes no mention of West or any other staff member or individual.

A spokesperson for the trust declined to provide a copy of the full audit or answer any specific questions about the audit.

In a written statement Keva Sturdevant told News4, "Let me be clear, most of the issues in the 2010 audit do not currently exist in our organization, and we are actively re-addressing those issues we were unaware of. The Trust’s current financial practices are sound, and would not lead to the type of issues that occurred in FY 2010."

The nonprofit expects to release the full audit in the next two weeks, after it has been approved by the full board of directors.

The report finds other problems with the management of funds at the nonprofit. According to the auditors, more than $8 million dollars of the trust's funds were put at risk because that money was kept in a single bank account that was only insured up to $250,000.

As for funding from D.C. taxpayers, the report shows that in 2010 the DCYITC received $19,104,332 from the District government.

The report, entitled: "Financial Statements, Schedule of Expenditures of Federal Awards and Independent Auditor's Reports required by Government Auditing Standards and OMB Circular A-133 for the year ended September 30, 2010," was provided to News4 by Robert Bobb, Chairman of the trust's board of directors. It was prepared by the firm BDO USA.

Bobb says he has authorized the release of the full audit.

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