The Herald-Tribune (Florida) - by David McSwane

Local police detectives are investigating whether a Sarasota city employee committed fraud while working for a charity suspected of misusing state and federal community grants.

City Manager Bob Bartolotta on Tuesday ordered Sarasota police detectives to investigate alleged double-billing by a city administrative assistant who worked with the Newtown Front Porch Council.

The police action was part of a three-page memo in which Bartolotta urged city commissioners to stop giving money to the local charities shown to have questionable finances.

Bartolotta also said he notified the Florida Department of Community Affairs and officials with the federal Department of Housing and Urban Development, which monitors grants like those the city handed to Newtown Front Porch.

"The issue of double-billing is an area of grave concern," he said. "It is the staff's recommendation that these youth grants not be continued in the future."

According to records, administrative assistant Lori Benton collected nearly $30,000 for coordinating a summer youth jobs program for the Newtown Front Porch Council, a now-defunct nonprofit. The group since 2003 has received hundreds of thousands of dollars in government money to help rebuild Sarasota's neediest community, records show.

The audit said that documents prepared by Benton were used to bill nearly $6,000 in identical services to the city and the state.

That money, the audit said, was supposed to go toward salaries for area teenagers.

Benton was placed on paid administrative leave last week and could not be reached for comment. Last week, she denied involvement in any double-billing.

The scathing city audit highlighted glaring holes in the way grant managers oversaw public money funneled in 2009 and 2010 to two charities in Newtown. That inquiry noted lax oversight by city grant managers and cited accounting irregularities in invoices prepared by Benton, who used an unregistered side business to bill the state for her work at Front Porch, the audit said.

During Tuesday's commission meeting, Bartolotta offered sharp criticism of the city practice of passing off federal community grants to nonprofits, calling the practice a "failure waiting to happen."

"I don't think we should give any money to any of these groups without audited financials," Bartolotta said.

The city's inquiry also found misuse and poor accounting of money the city gave to ManUp of Greater Sarasota, a nonprofit the city paid to run a similar summer youth jobs program.

Bartolotta urged far more scrutiny of how money is given to charities, and how they are designated.

"This organization was not viewed by the city as a charity but rather as a redevelopment organization," Bartolotta said. He added that city officials have overlooked dozens of financial reporting errors because the charities were relatively new.

"If you're just going to handle the money, you're not helping them," he said.

According to Herald-Tribune research, city officials have for years turned a blind eye to accounting irregularities and undocumented spending as they continued to give money to nonprofits.

Even when Front Porch board members demanded the city stop sending money because the charity was mismanaged, officials in April pushed forward a routine vote to give the council another $32,000.

Mary Mack, the charity's former president, resigned in April as her fellow board members accused her of misusing public money.

Mack told the Herald-Tribune last month she used money the city gave the charity to, in part, help pay for costs associated with her private tax preparation business. But she could not say how much money was misspent.

"They just kept piling money on," Mack told the newspaper.

Former Front Porch board members submitted to the commission a letter in support of Benton, who they say has been wrongly blamed for double-billing.

"The statement in the audit that Ms. Benton was responsible for double-billing is a gross misrepresentation," the letter said.

Former board member Barbara Langston said she is disappointed with the city manager's recommendation that small charities no longer receive money.

"It's just not that simple," she said. "It's a problem of how this money was administered. They are trying to make Lori the scapegoat."

As of late Tuesday night, the commission had not taken any action related to the audit findings.