The troubled nonprofit from which a former D.C. Council member stole $350,000 in government funds is still unable to fully document all of the grants and expenditures made in the five-year-period around which the theft took place, according to a new audit.
A report by the Office of the D.C. Auditor states the Children and Youth Investment Trust Corp. could not provide documentation for nearly two-thirds of grants reviewed in an audit of financial activities from fiscal 2007-2012 — a period during which the District doled out nearly $124 million to the nonprofit.
"Overall, we are unable to confidently conclude whether CYITC complied with all applicable governance and internal controls for the sample selected from the past several fiscal years," states the audit report, released last week. "Specifically, we found that CYITC could not provide sufficient evidence or documentation regarding grants and payments to make this determination."
The ability of the trust, a public-private partnership meant to give grants to programs that aid children, to manage its finances came under scrutiny when former D.C. Council member Harry Thomas Jr. pleaded guilty in 2012 to a scheme by which he directed funds through the trust to organizations of his choosing and then skimmed off money for himself. In 2008, funds intended for a youth sports program instead paid for Thomas' lavish trips and a luxury car.
Thomas leaned on the trust again in 2009 when money was needed to pay off expenses for an inaugural ball at the John A. Wilson Building. Former head of the trust, Millicent West, pleaded guilty last year to a criminal tax charge for steering more than $100,000 to an organization that reimbursed the D.C. Young Democrats — the group behind the ball.
Those grants were among the more than 1,522 grants — worth more than $97 million — the trust distributed from fiscal years 2007 through 2012.
When auditors sought to review files on 87 grants made during that time, they found that in 57 cases, the files were missing "critical supporting documentation, such as pre-award forms, Board meeting notes on the selection of grantees, and grant disbursement justifications."
Trust officials were also unable to locate a key for an off-site storage facility that was said to contain all grant-related accounting files for fiscal 2007.
A previous independent audit of the trust's fiscal 2010 finances, which was released in 2013, similarly found that the nonprofit had poor oversight of its accounts and was missing grant documentation.
Officials from the trust could not be reached for comment Monday.
However, former trust Chairman Robert C. Bobb, who was appointed in 2012 and stepped down in October, said much has changed in the last year in the way the trust conducts business.
"The organization is not the same organization it was some years ago since the Harry Thomas situation," he said.
The entire management of the trust was overhauled and new procedures and protocols were put in place during the time Mr. Bobb oversaw the nonprofit.
"We spent a lot of time with the team making sure we have programs and protocols in place so when auditors came they would be able to easily see how decisions were made," he said.
Of the 87 grants that were reviewed, the auditor's report noted that the eight files selected from 2012 were all available, complete and appeared to comply with applicable laws — a sign of improvement in the latter fiscal years that the nonprofit saw its management shifting.
The audit report made three recommendations, including that the trust consistently monitor all grantees, that it be able to properly account for all D.C. funds, and that it ensure documentation standards and controls are consistently applied within the grant-making processes.
In an agency response to the audit, trust's executive director, Ed Davies, said the nonprofit will "continue to improve our financial management of District funds and our grantmaking in part due to the findings in your audit."
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