Fallout begins after critical audit of Community Action program

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The board of a well-known nonprofit organization in Minneapolis was to meet in an emergency session Tuesday to discuss a recent audit which found the group misspent hundreds of thousands of dollars in public money, MPR News reports.

The organization, Community Action of Minneapolis, serves low-income residents in the city by providing heating assistance, home weatherization and services for children and families to promote self-sufficiency. Its funding comes primarily from the state and federal governments.

The audit conducted by the state Department of Health and Human Services found the group's leaders used some of that taxpayer money for a cruise, trips to Florida and the Bahamas, golf, visits to a spa, staff bonuses and a personal car loan for the executive director, according to the Star Tribune.

Those "unallowable" expenses totaled more than $226,000, MPR News notes. In addition, the organization overcharged state and federal grant programs for more than $600,000 in administrative costs, the audit found. It puts some of the blame on the board of directors for lax oversight of the budget.

Executive Director Bill Davis (pictured above) said his organization sent a lengthy response a few weeks ago, challenging some of the findings, according to the Star Tribune.

“I’ve been here for 24 years,” Davis told the newspaper. “I’m well aware of my responsibilities. I wouldn’t be elected to national boards if I was doing things I shouldn’t be doing.”

The auditors recommend that Community Action pay back $871,000 in misspent funds.

There's all sorts of political fallout from the report as well, since several prominent Minnesota DFLers were members of the board. Two of them have resigned in the last two days, including U.S. Rep. Keith Ellison and state Sen. Jeff Hayden.

Both men say they had representatives actually attend the board meetings and they were not personally involved, according to the Star Tribune. Hayden issued a statement saying he was unaware of the mismanagement of funds.

But Senate Republicans say they plan to file an ethics complaint Wednesday against Hayden, the Star Tribune writes, saying he is "using his elected office for personal gain."

MPR News reports this isn't the first time questions have been raised about Community Action's spending. Some are calling for Davis to go. Davis is a prominent African-American leader in the community and has run Community Action since it was created in the early 1990s.

Community Action posted this statement Tuesday on its Facebook page:

Dear Friends and Customers of Community Action of Minneapolis,

In the past few days, you may have heard some stories in the media that have shed a negative light on the organization. While the reports show only one perspective and contain inaccuracies, we are in the process of working with the appropriate parties and clarifying items that have been questioned, making adjustments where needed to strengthen our organization and move forward.

We remain confident in our ability to provide high quality services to our low-income customers, and stay committed to our important work of empowering low-income Minneapolis residents and creating change in our community.

We thank you for your continued partnership and support,
Community Action of Minneapolis

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