Nonprofit scrutiny

Amid the Rock Springs Young at Heart’s ongoing lawsuit to recover more than $1 million it claimed its former executive director embezzled from the organization, Sweetwater County Commissioner Roy Lloyd said the county should exercise greater oversight on the grant-funding it provides to local organizations.

The discussion came during Tuesday’s commission meeting, in which the county approved a grant contract for RSYAH worth $222,000, a sum the county had already appropriated for the senior center when it filed its lawsuit in July regarding the embezzlement claim.

“The nature of what happened is significant,” Lloyd said. “Just because we are using taxpayer funding to fund those, I think we have an obligation to do due diligence to make sure those monies are protected. … It was a horrible situation and I hate the fact that we’re discussing it, but it did happen.”

Lloyd said the county should question RSYAH about its policies and procedures, suggesting the alleged embezzlement occurred because of a “lack of oversight.”

During Tuesday’s meeting, the county board also approved $692,945 in contracts for seven other organizations: YWCA, Golden Hour Senior Citizen’s Center, The Youth Home Inc., Sweetwater Family Resource Center, The Boys and Girls Club of Sweetwater County, The Food Bank of Sweetwater County, and Climb Wyoming.

Commissioner Randy “Doc” Wendling said those organizations shouldn’t face extra scrutiny because of the RSYAH situation.

“Everybody else has been pretty above board,” Wendling said. “It’s not the organizations, it’s the individuals working within the organizations. It irritates me that we have to write rules for everybody when there’s only one bad apple. Not everybody needs to be punished. It seems like that’s what we do in government — somebody screws up and we write a policy and punish everybody. I like the way our contract is written.”

The county uses a standard contract for all of its human services contracts and, if changes need to be made to the contract’s language, Wendling suggested those changes occur as part of the budgeting process for the 2024 fiscal year after the new commission is seated in January. Commissioners Mary Thoman and Lauren Schoenfeld are the only present commissioners who will continue to be on the board next year.

Thoman noted that the contracts with the human services organizations it funds require them to keep detailed minutes, allow the county to examine their financial records, and insure that a certified public accountant will conduct an independent financial and compliance audit, subsequently providing the county with a copy of that audit.

“We just have to make sure we’re actually collecting the copy of the audit and our accountant is reviewing those,” she said. “I think things are in place. We just need to make sure we’re following through so that if we see any issues, we can follow up.”

Commissioners also held an executive session regarding the grant funding it provides to RSYAH.

Chairman Jeffrey Smith expressed skepticism of the need to discuss the topic in executive session.

“I’m not sure that it needs to be in executive session. All of the items that are going to be discussed are already public knowledge,” he said.

He was out-voted by his fellow commissioners.

Deputy county attorney John DeLeon, who provides counsel to the board, said it appeared lawful to discuss the topic behind closed doors because there could be some “legal ramifications.”

Under the Wyoming Open Meetings Act, governing boards are allowed to discuss legal topics in executive session so long as they concern “litigation to which the governing body is a party or proposed litigation to which the governing body may be a party.”

Even in that circumstance, boards may still choose to discuss the topic in public.

Schoenfeld said the county’s liability arises from its responsibility to ensure proper use of federal funds.

“Whenever there would be any sort of potential fraudulent activity from any agent receiving federal funds through the County there is an inherent liability (or risk) to the County,” Schoenfeld told the Star in an email. “Federal grants are required to be used for very specific activities to achieve measured outcomes and the County is responsible to ensure the federal funds are used in the correct manner.”

The funding the county provides to RSYAH ultimately comes from the Department of Health and Human Services, which initially passes the funding through the Wyoming Department of Health. Even though RSYAH operates with its own board of directors, Schoenfeld said the county could face a number of consequences from state or federal agencies.

“They could request a refund if the funds were not used properly,” she said.

Schoenfeld said state or federal officials could also withhold future funding from RSYAH or require greater stipulations on how the organization handles that funding.

“This is just my own personal opinion, but I don’t believe it would affect funding for other organizations or reflect poorly on the county, because we’re just the middle man,” she said.

According to the ongoing lawsuit by RSYAH, former executive director Candace Rachelle Morris set up a false business and set up a separate bank account to funnel money away from RSYAH. Young at Heart is a nonprofit corporation in Rock Springs which serves as a senior citizen center and operates a daycare service, the Early Learning Center. Morris, a Green River resident, worked as the director of the ELC for years, and her plans to divert funds from the ELC began in 2016, according to RSYAH’s filed complaint.

Before RSYAH discovered Morris’s alleged embezzlement, she had also chaired the school board for Sweetwater County School District No. 2. She resigned from the board shortly after the lawsuit was filed.

“Morris used funds embezzled from the Real ELC to support a lavish lifestyle, spending approximately $410,000 on a variety of vehicles,” RSYAH’s lawsuit states. “Morris embezzled much more each year than her $68,000 salary, raking in an average of $215,569 per year since January 2018 in embezzled funds through her payment diversion scheme.”