ANDERSON, Ind. — A federal review of Madison County Head Start has found the local Urban League Board of Directors deficient in 10 areas, including paying its president solely from the Head Start grant and inadequately keeping record.

“It’s sad it had to come to this,” said Helen Poole, Head Start director. “The program is really important and it’s disheartening when it’s run like this. It affects the kids, the families and the staff.”

A U.S. Administration for Children and Families report issued Monday — based on a June review of the local Head Start program — has given the board 90 days to correct the deficiencies and 120 days to fix two compliancy problems. If not, the grantee could lose the program.

William Raymore, president/CEO of the county’s Urban League and spokesman for the league’s board, did not return calls seeking comment Monday afternoon.

The federal report found fault with the Head Start governing bodies — citing inconsistent policies and illegitimate board members — and money operations. The problems ranged from the program’s foundation to its everyday operations, and the report repeatedly commented on inadequate records.



Fiscally unsound

The report gives the first detailed insight into the $2.1 million program’s fiscal management since parents and staff began challenging Raymore and the league’s monetary actions three months ago.

It notes that the Urban League runs four other programs than Head Start that shares four staff members and some space, with utility costs.

But, the report said, no allocation plan is set up to determine how much Head Start money should be used for shared space, utilities or salaries.

“A review of the Allocation spreadsheet for June 2009 found the salaries and fringe for the President/CEO, Fiscal Officer, and Payroll Clerk were charged in full to Head Start,” the report said.

A 2008 IRS form for the Urban League said Raymore made about $63,000 and fiscal officer Sue Scott made about $43,000. No salary was listed for payroll clerk Kathy Stapleton.

It also mentions a janitor and ex-program director Jeff Cottrell were paid from the Head Start budget, though it was split with Urban League funds under a nonexistent allocation plan.

“In an interview, the Fiscal Officer acknowledged information was missing and stated she planned to work with the independent Auditor on the allocation procedures,” the report said.

When it came to program expenditures, the review team worked around holes in financial records. It said the grantee had not retained a general ledger for January through June 2009.

“The grantee did not retain financial records and supporting documents pertinent to an award for a period of 3 years from the date of submission of the final expenditure report,” the report said.

The 2009 records hole prevented the team from determining how a deficit for the fiscal year ending in June 2009 — $14,117 — occurred, the report said.

However, the team was able to determine that $5,225 was improperly charged to the next Head Start award period. The review team also found four vouchers from the 2008-2009 school year, totaling about $2,800, that were paid from the 2009-2010 school year’s grant.

The report said all expenses from a school year are to be paid through only that year’s grant in accordance with regulations.

The report also found about $51,000 in unpaid invoices and payroll expenses for this school year, though not all were available.

It said Scott confirmed about $8,500 in the Head Start account at the time of the June interview, “and stated because a former Board member told her it was not necessary,” she had not set up a system to track outstanding expenses.

“The Fiscal Officer stated she was dependent on the Head Start program to submit invoices,” the report said.

Poole agreed, but said the Urban League could track outstanding expenses through purchase orders that must be approved before the school can pay for anything.

Raymore, the report said, attributed the deficit was due to increased unemployment insurance premiums and other operating costs.

In a round-up record-keeping section, the report noted several inconsistencies, including listed board members on an IRS form.



Boards? What boards?

One of two non-compliances listed in the report said the grantee also “did not maintain a formal structure of program governance for the oversight of quality services for Head Start children and family,” including a secure governing body.

The report notes similar discrepancies that The Herald Bulletin found in May. An online board roster includes two members who resigned long ago and a deceased member. Two others, the report said, include a member who resigned in 2006.

Raymore explained that the latter board member wanted to rejoin the board but was not voted in, the report said.

“A review of Board meeting minutes from January 2008 to April 2010 found the person was listed as participating in meetings and voting on Board actions even though they were not an elected member,” the report continued.

The report said another member of the board, payroll clerk Stapleton, should not be a voting member because it’s against federal regulations for a board member to work for the grantee organization.

Raymore, the report said, told the review team that Stapleton had only temporarily taken over the position of a deceased board member.

“The board meeting minutes from January 2008 to April 2010 contained no evidence of discussion of changes in the Board’s composition,” the report said.

But, the board’s composition isn’t the only problem, the report said.

It also said meeting minutes “showed no evidence” that the board voted on all issues and policies regarding Head Start, as mandated in program regulations.

The sometimes incomplete minutes also showed “the grantee was unable to substantiate a quorum of Board members was present.”

The Urban League board was not the only one questioned in the report.

As laid out in the shared governance standard, the parent-run Policy Council shares responsibility for the program. But, the report said, there aren’t any concrete procedures about how the board should be constructed, elected or governed.

“I hope policies are made and followed,” Poole said. “You can’t just make things up as you go along.”

Contact Christina M. Wright, 640-4883, christina.wright@heraldbulletin.com.