Board, on which Piedmont participated, was a “case study in lax oversight”-
The 2011-2012 Alameda County Grand Jury reviewed
finding it “a tragic but excellent example of what can happen when a board does not adequately oversee the organization for which it is responsible.” ACAP was dissolved “as a result of serious financial concerns and significant non-compliance with laws and regulations,” according to the 2011-2012 Alameda County Grand Jury report.
ACAP was intended to administer grant monies for
services to low-income residents. An earlier Alameda County audit found the program had “grossly” mismanaged hundreds of thousands of dollars and attributed this loss to lack of oversight by its governing board. Both the director and grant administrator were fired in February 2011 and were recently charged by the Alameda County District Attorney with misusing more than $200,000 of taxpayer funds.
In 2011, Piedmont, a member of this joint powers authority (JPA) holding one seat on the Board, was required by the terms of the JPA agreement to make an estimated payment of $146,000 to cover unpaid ACAP bills. Piedmont also agreed to pay additional amounts in the future as needed, to cover losses and to shut down ACAP. Three payments toward the estimated amount have been authorized –$25,000 in March, 2011, $75,385 in May, 2011, and $40,154 in March 2012– bringing the total outlay to $140, 539. Additional amounts may be required. The payments were based on equal shares from each of 13 participating jurisdictions, rather than pro-rata shares based on population, resulting in Piedmont paying up to 20 times per capita more than other cities. PCA reported on the audit in August, 2011.
The 2011 County audit reported that instead of the funds being used as intended to help extremely poor families in Alameda County with incomes below 75% of the federal poverty threshold,
“ACAP officials used most of a $500,000 federal grant . . . for unqualified payroll and unsubstantiated operating costs.” Reported the Oakland Tribune
The Grand Jury report notes ACAP’s Governing Board was comprised of 13 officials:
representatives from Alameda County and one elected official from each of the 12 participating cities in the JPA, including Piedmont. Councilmembers Margaret Fujiioka (2010-11) and Jeff Wieler (2011-12) represented Piedmont on the board.
The Grand Jury report (Community Based Organization Oversight, page 75) notes these elected representatives
were not directly accountable to the voters in regards to governing ACAP. Like most boards, they were responsible for hiring an executive director and providing oversight and governance for ACAP; however, unlike most such boards, they met only four times a year and often did not have a quorum.
ACAP was created in 1974 to administer federal block grant funds allocated to local cities on a per capita basis. For several decades it solely acted as an administrator, distributing grant monies to programs run by independent non-profit organizations throughout the County of Alameda.
However, in the last several years before its disbandment, the ACAP started expanding its staff and running service programs directly, with the Executive Director’s husband holding the position of Program Manager. The report notes “By 2008, ACAP was overseeing more than 20 separate programs focusing on jobs, training, housing, economic empowerment, youth development, and reentry services. Between 2008 and 2011, ACAP funding grew from $1 million to over $3 million, largely from federal stimulus programs. Based on testimony and documents reviewed, it
was apparent to the Grand Jury that ACAP’s financial controls failed to keep up with its growth.” ACAP’s annual required financial audits for 2009 and for 2010 noted deficiencies, but the Board took no action.
The Grand Jury report states, “During this period, the governing board missed several red flags regarding ACAP’s inability to manage its operations in a professional manner, although it seemed to spend a lot of time clarifying the respective roles of the governing board and the Community Action Board (CAB). The CAB, comprised of representatives from various income categories and community constituencies served by ACAP, was required for the purpose of advising the governing board of elected officials on all policy matters and funding decisions. Although it often had many vacancies, the CAB expressed concern about its lack of input and the lack of transparency at ACAP.”
The Grand Jury finds that many of the problems at ACAP stemmed from inadequate
oversight and lack of accountability. There was confusion from having two separate “boards,” the governing board was comprised of officials already busy with their elected positions, there was no direct accountability of board members to any voters, board meetings were not held often enough or well enough attended, and there was considerable fragmentation of the financial oversight of ACAP.
Read PCA August 12, 2011 article on ACAP.