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NEON: 'Misspent' Money Went to Norwalk's Kids

NORWALK, Conn. — Leaders of an embattled Norwalk nonprofit stayed on message Thursday morning, repeating one point over and over: the money went to the children.

The press conference organized by Norwalk Economic Opportunity Now was called in response to a federal audit which said more than $400,000 had gone to purposes other than those that had been authorized – causing concern among parents of children in the Head Start program at NEON and leading to the city of Norwalk to take NEON's administrative grant off the proposed 2012-2013 budget.

"There is nothing in that audit that says we spent money on anything other than the children," said Joseph Mann, NEON's president and CEO. " ... They're saying we spent it on other programs, they're not saying we spent it on other than the children or something outside of childcare. There's nothing outside of childcare that's about anything that's in that audit."

The audit conducted by the Office of the Inspector General indicated that NEON took federal money meant for its Head Start program and used it for administrative expenses, tuition for non-Head Start employees, routine nursing consultations and inappropriate equipment usage, a misuse of more than $400,000 from Jan. 1, 2009, to March 31, 2011. The audit concludes with a recommendation that NEON pay the money back.

Both Mann and Greg Burnett, chairman of NEON's board of directors, stressed that technical problems with accounting led to the finding. "They say the way we were doing it, it should have been indirect and we should have gotten an approval of the charges indirect in advance," Mann said.

They did not realize there was a problem with the accounting before the audit, he said. "This is the way we have done it for some period of time, six or seven years, frankly, back and forth with the funding source, having our application approved every year," Mann said.

Other topics covered at the press conference included NEON's assertion that it will work to keep Head Start, its hope that it will not have to refund the money and the reason why former finance director Chip Anderson resigned.

Anderson left for personal reasons unrelated to the audit, both men said. Anderson remains a consultant to NEON, offering assistance on issues he had been working on.

Mann and Burnett hope to gain back the confidence of parents whose children are enrolled in Head Start, the said. "We continue to have an open dialogue with the parents," Burnett said, adding that a meeting is planned for Feb. 29.

There is a perception in the community that money was missing or that there was fraud, which needs to be dispelled, Mann said. "That was not the case, nothing was missing at all," he said.

While there are 275 children in Head Start, they are only part of the 513 children NEON looks after every day. The audit concerned money that was used to help children that are not enrolled in Head Start, Mann said.

"There is frankly an indirect line within that grant that we never use, we never put it in that line," Mann said. "And that's been over some period of time, and that's never been an issue, because if it was we would have changed it. What we said we would do, we said we were charging it to the grant direct. Internally, what we did, we put it into an indirect pool and then charged it to the grant. So OIG says that is an incorrect process, you should have been charging it directly to the grant as the expense occurred. So it was a technical issue."

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