Jan 05 2012
Greenwire - by John McArdle
About two-thirds of federal cash spent in recent years on the Brown v. Board of Education National Historic Site in Topeka, Kan., is "unsupported, unallowable, not allocable and unreasonable," according to an independent audit prepared for the National Park Service.
Over the three years covered by the audit, the Brown Foundation for Educational Equity, Excellence and Research spent just under $940,000 in federal funds through a cooperative agreement with the Park Service. Of that, $620,871 is being challenged in a report released yesterday.
Earlier this week, the foundation's lawyer had threatened to file a lawsuit in order to keep the audit from being released. The lawyer has criticized Jones and Co., the California auditing firm that produced the report, for failing to talk to foundation employees or consider 4,000 pages of documents provided by the group to obtain a better picture of the foundation's finances (Greenwire, Dec. 21).
The Park Service, which has suspended its financial dealings with the foundation this fall and evicted the group from the space it had previously shared at the historic Monroe School in Topeka, decided to release the report this week after receiving Freedom of Information Act requests from multiple news organizations.
The auditor found a host of problems plaguing the spending practices, management decisions and financial controls at the foundation -- which since its founding has been run by Cheryl Brown Henderson, the daughter of the named plaintiff in the Supreme Court's landmark school-desegregation case.
Those problems lead to a total of nearly $279,000 dollars in federal funds in fiscal 2009, 2010 and 2011 to be spent on items that are expressly unallowed under federal guidelines.
That includes money spent on personal cellphones, home Internet service, foundation fundraising efforts, fines, alcoholic beverages and penalties relating to the group's state and federal tax filings.
The salary of a chief operating officer whose duties, the auditor says, did not provide a real benefit to the agency, was also deemed unallowable.
Last year, an Interior Department investigation into conflict-of-interest allegations made against Brown Henderson -- who for a brief period served as superintendent of the historic site -- uncovered a romantic relationship between her and the foundation's chief operating officer. That investigation resulted in Brown Henderson stepping down from the superintendent post (Greenwire, July 25).
Another $247,000 was spent during the three years audited on salaries and other items that according to the auditor were out of proportion in relation to the federal award received.
The audit also found that some $62,000 in federal funds were spent on items for which no invoices or appropriate documentation was provided. Another $33,000 in spending was deemed "unreasonable" and included practices such as using limousine services for foundation guests instead of taxi or shuttle services.
The auditor repeatedly placed the blame for the foundation's questionable financial practices on the fact that it is "dominated by one or two individuals" and that "there was no oversight by members of the Board of Directors."
Over the past three years, the foundation has listed several prominent business leaders in Topeka, officials at Washburn University and other nearby academic institutions and one state Supreme Court judge as members of its board of directors.
The Park Service also does not escape criticism in the audit.
In a section discussing concerns about the agency's cash management, the auditor notes that "either no records were maintained by the auditee or the funding agency management approved payment without reviewing paid invoices that pertain to the expenditures."
The situation in Topeka has caught the eye of Kansas' congressional delegation.
A spokesman for Rep. Lynn Jenkins (R-Kan.), who was an accountant before coming to Congress, said the lawmaker is "closely monitoring" the situation at the historic site but declined to comment further.
Now that the audit has been released, Clint Patty, the foundation's Topeka-based lawyer, said the group continues to consider its legal options with the eventual goal being to get the foundation's federal funding restored.
"It's extraordinary, after 17 years of doing business exactly the same way, the Park Service approving all our expenditures, this is what we end up with," Perry said today. "It's staggering to me."