SPRINGDALE -- A planned kitchen expansion at the Springdale Senior Center is in limbo because money to pay for the project was apparently spent elsewhere by the agency contracted to oversee senior center operations.
Michael Norton, executive director of Northwest Arkansas Economic Development District, said the money has been spent.
By The Numbers
Walmart Foundation Grants
Grant money received in 2011 by Washington County Senior Centers
• Lincoln Senior Center, $49,750 for meal program
• Elkins Senior Center, $25,000 for meal program
• Fayetteville Senior Center, $52,000 for meal program
• Springdale Senior Center, $50,000 for meal program
• Springdale Senior Center, $100,000 for building expansion
Source: Staff Report
"We used it to feed the hungry," Norton said. "I'm sure Springdale wanted to use the money to expand its facilities, but paying for food was more pressing."
Northwest Arkansas Economic Development District, held a contract to oversee and provide management for senior centers in Washington, Newton, Marion, Boone, Baxter and Searcy counties. The district received a check for a $150,000 grant given to the Springdale center by the Walmart Foundation. The money was to be used to pay for a year of meals for 38 people on the Meals On Wheels waiting list, and for the kitchen expansion, said Lori Proud, Springdale center director.
The district, after having the the contract 35 years, recently turned management of the senior centers back to the Area Agency on Aging of Northwest Arkansas. The agency is one of eight in Arkansas that provides senior center management and oversight for compliance with state and federal regulations, mainly through contracts with other organizations, said Krista Hughes, director of the state Division of Aging and Adult Services.
The Office of Human Concerns, based in Rogers, has a contract with the agency to oversee senior centers in Benton, Carroll and Madison counties, said Jerry Mitchell, Area Agency on Aging executive director.
"It is important we see invoices and receipts to find out how the grant money was spent," Mitchell said. "Our contracts do not allow money to be moved from line item to line item in the budget."
Storage Solution
The Springdale Senior Center expansion was to add both dry and frozen storage with the grant money, said Lori Proud, center director. The center's kitchen feeds up to 300 seniors who come to the facility at 203 Park St., or have their food delivered by the Meals On Wheels program.
The space would allow the center to store more food it receives from the Northwest Arkansas Food Bank, Proud said.
"When the food bank calls and says they have two pallets of food and asks if we can take them, I have to tell them I only have room for one pallet," Proud said. "The food bank is essential to us because we have to raise half of our budget locally each year."
Proud said she applied for a grant from the Walmart Foundation to pay for the expansion and received it in June 2011, according to an email from Kaye Curtis, director of senior services for the district. Curtis has retired, Norton said.
The email and other agency documents were obtained through a Freedom of Information Act request.
Senior centers in Lincoln, Elkins and Fayetteville received grants at the same time, but Springdale's $150,000 grant was more than 50 percent of the total of the grants, according to Curtis' email. All of the grants were labeled for meal programs, except $100,000 of Springdale's that was tagged for building expansion.
The Springdale grant was given with the understanding it would go to the Meals on Wheels program and to expand kitchen storage, said Scott Pope, Walmart spokesman.
Food Debt
The grant was called "manna from Heaven," according to a June 2011 email from Curtis. The bulk of the grant money would be used to pay Springfield Grocer food bills, according to the email, in order to have less deficit to carry over to the new program year.
In a June 2012 email, Curtis again mentioned a debt to Springfield Grocers.
"It is critical that we find the money to once and for all finally retire the deficit that has been hounding us for the past five years," according to Curtis' email.
The debt was paid off this year, according to Wes Fowler, chairman of the district board of directors. Fowler is the former county judge in Madison County.
Fowler said he learned of the debt, which had grown to about $528,000, from Norton in early March of this year. With interest of $88,000 charged by Springfield Grocers, the debt increased to over $600,000, according to Norton.
Norton said he did not learn about the debit until a few days before he contacted Fowler.
The district board approved paying the bill out of the current budget, Fowler said.
"We had to stop the bleeding," Fowler said.
The Springdale grant check was made out to the district, and the district had the right to use the money for food, Norton said
The description of the program in the grant application states the grant would go to expansion of the center kitchen's dry and cold storage. Paying for food for seniors on the Meals on Wheels waiting list was listed second.
Spending grant money for the purpose intended is essential, said Sharon Skinner, board president of the Grant Professionals Association, national organization based in Kansas City, Kan.
"If the money is spent elsewhere, the grantor can ask for the money back, every single penny," Skinner said. "That is within the realm of legality. If it happened with a grant from a federal agency, they would definitely insist on being paid back."
Pope said Walmart Foundation officials continue to support the Springdale center. However, foundation officials expect those who oversee financial matters for the center to resolve questions regarding how the grant was spent, he said.
After the Area Agency on Aging took over from the district, agency officials asked the district for $133,313 in unused building money for the Springdale center, Mitchell said. The total includes money left over from earlier building projects, including expanding the parking lot, covering a walkway between the center's two buildings and renovating a bathroom.
Norton sent a check for $24,888, which was the money remaining in that account, according to a letter to Mitchell. The balance Mitchell requested came in the form of grants made out to the district, Norton said.
"It's a difference of opinion how those grants can be used," Norton said.
Springdale managed the parking lot improvement project last year, and paid the contractor who paved the lot, said Wyman Morgan, city director of administration and financial services.
A district transaction record shows a payment of $30,360 made to Springdale in June 2013. Laura Favorite, city treasurer, said the city received the money Jan. 22, 2014, according to Springdale's records.
Some financial details are not available because the district's financial director is on medical leave, Norton said.
"I don't want to comment on some things until I have the records in front of me," Norton said.
Those applying for grants have to be careful to maintain a good reputation, Skinner said.
"You can get a black eye with other funders," Skinner said. "It could put future funding at risk."
Facing Audits
The Area Agency on Aging is paying for an independent audit of the district's senior center finances, Mitchell said.
"We may spend more getting the money back than we receive, but I think that's the right thing to do," said Mitchell.
An annual audit started the strained relationship between the agency and the district, Mitchell said. The 2012 audit was almost a year late when Norton was told in March the district could be held in violation of its contract, Mitchell said.
On March 19, the district board voted to terminate the contract with the agency, Fowler said.
"The senior center contract really was outside the scope of our mission," Norton said. "It is really not part of economic development."
The development district is the only one in the state that had a contract to manage senior centers, Norton said. He said he inherited the contract when he took the executive director's job.
Hughes could not confirm that was true, she said, without going through every contract in all eight districts.
The district board endorsed a call for a legislative audit of the district by Mickey Pendergrass, Baxter County judge, said Tim McKinney, Berryville mayor and a member of the board. Pendergrass asked for the audit after problems with late payments of utility bills for senior centers in Marion and Baxter counties, McKinney said. The water for the Mountain Home center was shut off, according to a report in the Baxter Bulletin.
A legislative audit could take a month to begin, said Jon Moore, deputy legislative auditor for state agencies with the Arkansas Department of Legislative Audit. The time required to complete the audit will depend on its scope, including the number of documents to be reviewed, he said.
Springdale Mayor Doug Sprouse said he hopes an audit will show what happened to money raised by the local senior center.
"I have confidence in the local center management, but I would like to know if the money they raised will be spent on our people," Sprouse said.
NW News on 04/27/2014