Neon Considers Move Back To Old Audit Firm

NORWALK, Conn. – Facing further delays with a financial audit that remains unfinished after more than eight months, the board of directors of Norwalk Economic Opportunity Now is considering going back to its former auditor to complete the 2011 review.

Norwalk Economic Opportunity Now could switch back to its old audit firm if it cannot resolve issues with its new one.
Photo Credit: *Nancy Guenther Chapman*

by Alfred Branch

12/28/2012 2:00 a.m.

The old firm, Hope & Hernandez PC, has been the auditor for the embattled anti-poverty agency for a dozen years, and last spring NEON hired CohnReznick to review its books after the agency was cited for mismanaging more than $400,000.

At issue is a clash of styles of how NEON staffers are used to working on audits with the hands-on Hope & Hernandez compared to the technological approach of CohnReznick. Further delays in completing the audit could affect NEON’s ability to fundraise, according to interim President and CEO Patricia Pheanious.

CohnReznick is already in the midst of a separate forensic audit of the agency, but some of its requests for the financial audit have been difficult for NEON staff to provide.

“We’ve been unable to close the loop on some of these issues,” said NEON’s outside attorney, Michael Widland.

During a board meeting Thursday, the members voted to give CohnReznick until Jan. 7 to see if the agency and the firm can work out its differences. If not, NEON could switch back to Hope & Hernandez to complete just the 2011 financial audit. The 2012 audit and future ones might be conducted by CohnReznick or another firm if NEON decides to bid it out.

Common Council President Doug Hempstead, who also sits on the NEON board, was the sole vote against the possibility of rehiring Hope & Hernandez because, he said, the move to CohnReznick was made to give NEON “a fresh start.” Board member Brian Baxendale abstained.

“We’re saying that we’re going back to our old ways because we don’t want to change,” Hempstead said. “It sounds like NEON needs to adapt to the new ways.”

Part of that transition to a new way of doing business is being held up by slow recruitment of new board members. Pheanious said that, while people have expressed interest in serving on the board, few have filled out the application.

Current board members were supposed to wind down their obligations by the end of the year, following NEON’s merger with Stamford’s anti-poverty agency CTE Inc. The board voted unanimously to extend its term until the end of February to allow for more residents to come forward to serve.

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