A federal agency has listed the Economic Opportunity Board -- the Las Vegas Valley's largest nonprofit organization -- as "at risk," which could cut into the group's federal funding.
The Health and Human Services Department said in a memo to the Economic Opportunity Board, a copy of which was obtained by the Sun, that the decision puts the EOB on a list that circulates throughout the federal government.
Windy Hill, associate commissioner for the Head Start bureau in Washington, said classifying the EOB as "high risk" is "a very extreme step." Hill -- among the top officials overseeing 1,670 Head Start programs nationwide -- said less than six programs had been put on this list in the last year.
"Other agencies see (the list) and are then made aware that it's an agency deemed necessary to take very serious precautions," she said.
She said the EOB would stay on the "at risk" list, which will likely stop other federal agencies from giving the group money, until questions about fiscal and other problems are resolved.
HHS has called a meeting with the EOB's 15 board and key staff members in San Francisco Tuesday, an unusual move given that the federal agency is already planning to hold a review of the nonprofit agency's books and programs in early April due to its troubles.
EOB, a group that fights poverty through programs such as job training and early childhood programs, has come under scrutiny after it was unable to account for $2.1 million. Many of the questions have centered on the agency's handling of child care programs, as well as Head Start, an early childhood education program.
The scrutiny has increased to other aspects of the agency's finances and management. EOB has a $60 million budget, most of which comes from federal funds.
Sen. Joe Neal, D-North Las Vegas, a member of the EOB's board and the agency's spokesman since last week, did not return calls today seeking comment.
Hill said the EOB's Head Start programs -- with a $12.2 million budget serving more than 1,700 children -- will not be able to draw on federal funds without justifying every expense on a biweekly basis.
These decisions were made, the memo said, because the EOB suffers from cash overdrafts, expenses exceeding revenues, and the misuse of federal money. The agency receives money from the federal and state governments.
The agency's problems are the result of "substandard fiscal and administrative controls," the memo said.
Tuesday's meeting was called, Hill said, "to have a conversation with the entire board to remind them of fiscal and fiduciary standards and responsibilities."
But at least two board members will not attend the meeting. Las Vegas City Councilman Lawrence Weekly, who is the board's vice chairman, said he did not know about the meeting. Henderson Councilwoman Amanda Cyphers said she could not attend.
This isn't the first time the agency has faced scrutiny.
The problems in the memo were identified in an HHS 1997 review, according to related documents obtained by the Sun.
When asked about the many issues still outstanding from the 2003 HHS review -- including EOB being unable to demonstrate that it is meeting the federal requirement of not spending more than 15 percent of the grant in administrative costs, or, that it is following regulations on how to charge salaries to the grant -- Hill said she "had the sense there were concerns before.
"I believe we could've been more aggressive," Hill said.
The 1997 review also stated that it was unclear how much was spent on administrative costs. It said there was "inadequate control in the accounting system for each program's cash receipt and disbursement balance," and that HHS had not received information to demonstrate that the EOB was "not using Head Start funds to finance other programs."
Hill -- who joined the bureau in January 2002 -- said "there were weaknesses in accountability" in previous years. She said she is putting in place measures, including assigning technical staff to Head Start programs nationwide to catch problems before they happen.
Since the latest review, EOB's chief financial officer was fired and the executive director resigned.
The memo on the "high risk" classification says all outstanding issues from the 2003 review must be settled during an HHS team inquiry April 5-9.
As for the history of problems in the EOB's Head Start programs, Hill said, "repeat findings suggest this was systemic and long-term and that if uncorrected, we would get to this fork in the road we're at now."
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