$900,000 in Grants Not Documented, Review Indicates

Montgomery County's inspector general reported yesterday that a Wheaton nonprofit agency and the county's Health and Human Services Department are unable to account for more than $900,000 in government grants.

The report says HHS paid Centro Familia the funds in 2007 and 2008, based on 70 separate invoices, without first "verifying the validity and the appropriateness of those payments."

Centro Familia, which principally serves low-income Latino children and their families, was unable to come up with documents that would show it completed the work described in the invoices, according to the report from the office of Inspector General Thomas J. Dagley. Without the paperwork, the report says, the inspector general could not determine whether services were delivered.

Pilar Torres, the nonprofit organization's executive director, said her organization provided the services that the county paid for and sufficiently documented them to HHS and the inspector general's office. She said she was distressed by the report, calling it "devastating" to her agency's reputation and efforts.

HHS Director Uma Ahluwalia said the department had been working closely with Centro Familia and would continue to examine its invoices and spending.

The report is the second by the inspector general's office concerning HHS billing and procurement practices that has found irregularities with outside contractors. The department's $272 million annual budget accounts for a substantial portion of the county's $4 billion budget, and a large chunk of its funds goes to contractors.

Centro Familia offers an early childhood program to about 30 preschoolers and has trained more than 300 in-home child care providers who focus on Latino children who otherwise might lack sufficient preparation to enter elementary school. The organization relies largely on government grants and has an annual budget of about $700,000. About $450,000 of that comes from grants administered by HHS.

Torres said the organization has been successful in preparing young children in preschool settings for elementary school and has always received positive evaluations from HHS.

Torres co-founded Centro Familia a decade ago with Board of Education member Nancy Navarro (Northeastern County), a candidate for the County Council seat left vacant by the death of Donald Praisner (D-Eastern County). Navarro severed her ties to the organization in 2004 when she joined the school board.

David Anderson, a Bethesda attorney who is president of Centro Familia's board, said the organization has taken steps in recent years to tighten its internal procedures and would continue to try to improve them.

Like many nonprofit groups, he said, Centro Familia is adept at delivering social services but less fluent in business plans and accounting practices.

The inspector general's office examined invoices and expenditures in fiscal 2007 and fiscal 2008. It said HHS is continuing to use some of the same billing and procurement practices that the report has challenged as inadequate.

Last summer, the inspector general found that the department paid $137,700 to a Columbia consulting firm without any proof that work was done on four contracts.

Ahluwalia said yesterday that the county is unlikely to recover any of that money because after consulting with the county attorney's office she determined that there was insufficient proof to show that the work was completed -- or not completed -- by the contractor, Health Management Consultants.

County Council member George L. Leventhal (D-At Large), chairman of the council's committee that oversees HHS, said he had not yet read the report on Centro Familia but had been briefed by Dagley a few weeks ago about the review's findings. He said he wanted to read the report before commenting.

Leventhal said the council is keeping an eye on HHS procedures. "We are pressing them diligently to make sure that they have procedures in place for paying promptly and for ensuring contractor accountability and compliance," he said.