Publication of the results of the audit of Carrefour – Farmville
After receiving the findings of Phase 1 of the forensic audit from the Crossroads Community Services Board (CCSB), the CCSB Board of Directors approved the continuation of Phase 1 (b) of the investigation.
During the board meeting of the CCSB on Tuesday, September 28, the administrators attended a presentation regarding the completed phase 1 of the forensic audit of the organization. The audit investigated financial and other data records covering the period July 1, 2019 to August 31, 2021.
The investigation comes after a controversial year for Crossroads. In June, the Prince Edward Board of Supervisors said it would withhold CCSB funds unless an audit was conducted after concerns were raised by current and former employees as well as members of the public regarding rumors of spending / abuse of public funds and other management issues. .
In May, Carrefour’s former CEO, Dr. Susan Baker, was relieved of her post after six years with the organization.
The purpose of the audit, carried out by William Barrett of Barrett PC in Richmond, was to identify whether there were any indicators of fraud or embezzlement in the organization and to help restore the credibility of the CCSB in many counties it serves and the citizens of those localities. .
Phase 1 of the audit appeared to have uncovered no illegal activity or embezzlement across the organization, but the investigation revealed weaknesses in Crossroads’ accounting software that officials hope will be addressed. .
Barrett reportedly found no incidents of abuse or impropriety during his investigation of the numerous allegations against Crossroads, including issues such as financial statement fraud, food stamps, credit card fraud and gasoline, financial document shredding, etc.
Of the few issues uncovered during the investigation, the main concern appeared to be with Crossroad’s accounting. Barrett discovered that Crossroads had been using the same accounting software from Boston Technologies Inc. for over three decades. Non-Windows-based software, he noted, is extremely outdated, so much so that auditing and tracing of accounting transactions was not available to be completed in this audit phase.
Barrett made a variety of recommendations to the board regarding issues that should be addressed, including hiring a “knowledgeable, bonded, fully charged accountant” as Chief Financial Officer (CFO) to keep the books. and records for CCSB which will work with other staff to acquire and install Windows based accounting and email software and an onsite computer server that can track and report payroll and staff history.
The greatest concern of some government officials regarding Crossroads stems from the eligibility of the 501 (c) (3) nonprofit to apply for a Paycheck Protection Program (P3 Loan) during the pandemic. The loan of $ 2,497,027 was later canceled by the federal government.
Barrett found no abuses or irregularities with respect to loan transactions, but recommended that the audit firm Snead, William and Mayhem PLLC, which provided advice to the CCSB as part of the loan application and remission program. PPP, provides a detailed report that documents the proper use of funds, as the IRS increasingly checks borrowers.
Barrett noted that as CCSB’s physical assets age, facilities and grounds staff will need outside help to maintain these assets. He recommended that counties develop a protocol to help Crossroads dispose of unusable and aging vehicles through government surplus auctions.
Barrett recommended that board meetings be recorded and that the board secretary be responsible for writing and maintaining board minutes. He also recommended that county representatives on the board of directors ask their county staff to approach the council on complex issues that may not fall within the expertise of council members.
“It’s a more involved community that helps a more involved community service board,” Barrett wrote.
Since many concerns about Crossroads, such as board issues, hiring and firing employees, and asset management practices, were outside the parameters of a forensic audit investigation Barrett noted in his findings that it was his professional opinion that a second phase of dual investigations is needed to finalize things for Carrefour.
On Tuesday, the board voted to go ahead with phase 1 (b) of the investigation. According to Prince Edward County Administrator Doug Stanley, the second phase of the audit will see Barrett review all of the organization’s transactions since July 1, 2020.
While Prince Edward led the charge in the first phase of the audit, the second phase, Stanley noted, will take place between Crossroads and Barrett.
Stanley said the total cost for the first phase of the audit and presentation was $ 25,000, which is split evenly among the counties of Charlotte, Cumberland, Prince Edward, Nottoway and Buckingham, who all agreed to do push for audit earlier this year. .
Stanley said he believes each county is looking to reduce that cost from its annual contribution to Crossroads. Phase 1 (b), he added, had an estimated initial cost of $ 25,000 to $ 30,000.
Stanley and several Crossroads directors appeared satisfied with the audit findings.
“I am very satisfied with the findings of the audit report and the way the allegations have been handled,” commented CCSB Prince Edward supervising member Dr Odessa Pride. “Overall, Carrefour’s board members were satisfied. It is important that the executive director leaves with a clean slate, ready to take on a formidable mission.
CCSB Buckingham Supervisor Member Thomas Jordan Miles III said he was also satisfied with the audit findings, adding that he agreed with the follow-up to Barrett’s recommendations regarding accounting and tax operations, the PPP loan and the conditions of the installations / vehicles.
“It is very important that we conduct this audit to show our community, our staff, our customers and the entities that fund us that, despite the statements and allegations made about the (Community Services Board), no illegal financial activity did not take place. It will be a big step to restore confidence and faith in this agency. And moving forward with the second phase of the double investigations, which I support, will show that more, ”said Miles.
CCSB Charlotte supervisor member Garland Hamlett said he was also happy with the findings of the investigation, adding that he did not expect anomalies in financial records to come to light.
“The (board) has to work to resolve all internal issues and let (Carrefour) staff run the organization, because that’s what they get paid for,” Hamlett noted. “We are overseeing the ‘big picture’. Employees should report issues to their management, and if a solution is not resolved, the board should be involved. Confidence in management must be in place. Working conditions must be the best possible, and with that, a fair pay scale for all must be put in place.
CCSB Cumberland Supervisory Member Robert Saunders Jr. said he would like board meetings to be recorded electronically to clarify minutes, as recommended in the audit findings.
“Overall I’m happy with the first part of the audit,” Saunders said. “If nothing is found in the phase 1 (b) audit, then Carrefour and the CCSB can move forward. “
“Over the past year in the community, I, like many others in the community, have heard a lot of rumors and innuendos about operations at Crossroads,” Stanley said. “Many people who had concerns were able to speak with Mr. Barrett during his examination and produce evidence of wrongdoing. In the end, we found that many of the charges ultimately had no basis upon examination. Along with my colleagues from surrounding counties, I am hopeful that the organization can stop looking in the rearview mirror and, once the new CEO is hired, look to the future and address the mental health challenges of the citizens of our region. . “