No sign Vermilion group's CEO will resign after state agency's letter

No sign Vermilion group's CEO will resign after state agency's letter

DANVILLE — After the Illinois Department of Commerce and Economic Opportunity threatened this week to pull millions in federal grants from the East Central Illinois Community Action Agency due to mismanagement by its chief executive officer, there's no indication the top official will resign as the state department has urged.

One East Central board member, Tom Stone, who's also a Danville alderman, said Friday that to the best of his knowledge, CEO Angele Thibodeaux Burns has not shared any plans to step down.

Stone said the board gets a "big financial report" and he didn't think there were any "red flags" since December 2017 when state officials had met with Burns and started a corrective action plan.

The state department said its staff has dedicated "considerable time and resources" in the past year to help address and correct the issues at East Central, which include inaccurate record keeping, potential misuse of funds, grant benefits improperly — and possibly fraudulently — obtained by East Central employees, conflict-of-interest policy violations, a decline in grant application numbers, a failure to spend some grant funding and a failure to operate others.

"I thought we were past that," Stone said Friday of the issues that the plan was supposed to address, adding that as a board member, he relies on the ethics and competence of the employees who prepare the reports.

Stone said state officials had come to a board meeting and asked to talk with the board without Burns present, but the board refused.

The News-Gazette could not reach board President Tyson Parks, and another board member and Danville Alderman Brenda Brown did not want to comment Thursday and did not return calls Friday.

The East Central Illinois Community Action Agency is a nonprofit corporation led by a full-time CEO with oversight from an all-volunteer board of more than 12 local residents. It employs more than 100 and has served East Central Illinois for more than 50 years, using mostly federal grants to deliver various services to low-income populations, including pre-kindergarten programs, called Head Start, energy assistance funding, home-weatherization improvements and more.

State Rep. Mike Marron, R-Fithian, a former board member of East Central who resigned in 2017 when he was appointed as state representative, responded to the state agency's letter Friday, saying in a written statement that the details are troubling.

"Any time an entity entrusted with taxpayer money has been found out of compliance for reasons such as mismanagement of funds and conflicts of interest should raise red flags at all levels of government," he said. "It is imperative for the Executive Director of ECICAA to resign immediately to allow new leadership to begin to address these and other issues to ensure that taxpayer dollars are being spent appropriately and services are being delivered to the constituents that I represent."

In the most recent income tax report available on the IRS website, showing East Central's financials for 2016, the agency was 99 percent publicly funded, bringing in total revenue of $8.9 million, of which more than $8 million was federal grants and taxpayer dollars.

The tax report also shows that Burns was paid an annual salary of $96,336 plus $38,987 in "other compensation" in 2016. The year prior, her annual salary was $93,000 plus $21,494 in other compensation.

But tax reports also show that the agency posted a deficit her first two full years on the job. She was hired in July 2014. The deficit was $238,725 in 2015, and more than $140,000 in 2016.

Stone said that East Central has had a difficult time keeping a chief financial officer.

In the organization's 2015 IRS tax report, a financial officer was listed as being employed through May of that year at an annual salary of $63,259. The following year's IRS report listed no chief financial officer for any part of the year.

In the seven-page letter sent to Burns on Thursday outlining all of its concerns in detail and asking for her resignation, the state agency says that based on the significant deficiencies and the failure of East Central under Burns' leadership to properly serve the community, a corrective action plan is no longer a feasible option.

"The only path forward is a change in East Central's leadership," the letter states, adding that if Burns is unwilling to follow the department's demand, then it may take further action, including "suspending and/or terminating East Central's Grants, and commencing a proceeding to de-designate East Central as a Local Action Agency, if necessary to best serve the low-income community."

The agency also said in the letter that representatives will be in attendance at East Central's next board meeting Tuesday.

Some highlights of the state agency's concerns:

— Between 2017 and 2018, East Central spent only $585,401 of the $1.1 million awarded for home-weatherization projects for low-income residents.

— The agency has knowledge of a conflict of interest involving a member of the executive leadership team that falls under Burns' management. A relative of an executive team member was given two contracts using department grant funds over which the executive team member had supervisory authority, a "direct violation of the conflict of interest policy in East Central's operations manual," according to the state agency.

— East Central is down 14 percent in applications for its Low Income Home Energy Assistance program, compared to a statewide decline of 3.79 percent.

— East Central consistently spends an average of only 48 percent of its furnace-assistance funds per program year.

— A $200,000 late payment to Embarras River Basin Agency, a weatherization contractor, caused that agency to cease its relationship with East Central.

— Due to disallowed grant costs submitted by East Central and its failure to submit required grant documentation, the state agency locked the local agency's federal employer ID number from March 16 to April 17, and referred the situation to legal.

— East Central had drawn grant block funds of more than $38,000 and not used them for their intended purpose as identified by external auditors. The misappropriated funds should have been returned to the department with the closeout for the grant in August 2017, but the refund check was not received by the department until April 2019.

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