NEON working toward settling federal debt

NORWALK, Conn. – Joe Mann is getting a demanding letter from a South Norwalk anti-poverty agency regarding the massive debt for which many people he feel is responsible.

Norwalk Economic Opportunity Now (NEON) is on the hook for more than $700,000 stemming from two audits conducted by the federal Office of the Inspector General. While former interim CEO and President Pat Wilson Pheanious said the $400,000 that is described as “misspent” in the audit released in 2012 could be made to go away, the $314,605 identified in a more recent audit will need to be repaid.

Board members said last week they are sending a demand letter to Mann, the former CEO and president who is blamed for the massive irregularities. They hope an insurance agency will come up with the money, but first they must send Mann a letter – no one seemed to expect the money back, but it’s what you must do to satisfy the insurance agency, they said.

Board member Michael Berkhoff said that was also what Connecticut Department of Social Services Commissioner Roderick Bremby wanted the agency to do.

“He said that the board hasn’t acted on it,” Berkhoff said. “I told him that at the next board meeting I would bring it up and if that’s the way we have to go we will move forward.”

At that point, Chairman William Westcott clamped down on the conversation, saying, “We shouldn’t discuss any more details really about litigation in this session.”

Berkhoff said Bremby had been assertive about getting the money back.

“He said that we, as a board, have not acted on it because I pushed back on them and said ‘how come you guys haven’t done anything?’ He said the board has to do it,” he said.

Pheanious said recently that the $400,000 in “misspent” Head Start money could be attributed to accounting errors and so forth.

The $314,605 stems from credit card charges made by Mann, according to OIG. Those “unallowable charges” include:

• $4,983 for items including $733 for personal travel following a business conference, $624 for three briefcases, $364 in purchases from Apple iTunes, and $142 for two Cross pens.

• $1,973 for costs such as fuel, car washes and Sirius XM radio that were related to his company vehicle.

• 27 credit card transactions totaling $2,478 that did not have adequate documentation to assess their allowability. Many of these purchases were made at stores that sell both business and personal items, such as restaurants (10 transactions), large retail stores (five transactions), and supermarkets (tw0 transactions).

• 47 credit card transactions totaling $1,329 that had no supporting documentation. Many of these purchases were made at stores that sell both business and personal items, such as Apple iTunes (18 transactions) and Amazon.com (12 transactions).

Many Norwalk residents, including South Norwalk activist John Mosby, wonder why Mann hasn’t been arrested, given the severity of that account.

Norwalk Police Chief Thomas Kulhawik said that federal authorities have not requested any help in the matter.

“The Office of Inspector General is part of the department of Health and Human Services and obviously a federal agency, which, from what I understand, audited NEON and specifically the spending of federal funds,” he said in an email. “I am not aware of any request by them for any involvement by this department. I don’t know whether there was any federal investigation aside from the audit.  You would need to contact the federal authorities to determine if they considered any of the unsupported expenditures to be criminal in nature or treated as simply a violation of the guidelines or without proper documentation etc…”

Donald White of the U.S. Department of Health &Human Services Office of Media Communications declined to comment on the matter.

“As a matter of standard law enforcement process, the Office of the Inspector General and Health and Human Services neither confirms nor denies an investigation that may … or may not … be pending before the agency,” he said.

After the second audit became public, Pheanious released a statement.

“Please be assured that NEON has retained counsel to further the process of recouping funds that were misdirected. We will use every vehicle that is available in this circumstance to recoup mismanaged, fraudulently utilized or poorly accounted funds,” she said.

NEON Interim CEO and President Chiquita Stephenson said last week that NEON’s attorneys are working on an appeal regarding the “misspent” $400,000.