State regulators are finally getting tough with the Dallas County Community Action Committee, the anti-poverty agency where nepotism, sweetheart contracting, and other shenanigans have flushed tens of thousands of dollars of taxpayer money down the pipes.
In a letter dated December 30, the state demanded repayment of the $66,963 the agency had misspent in two federal grant programs over the past year, and threatened litigation or a cut in continued funding if payment isn't made. The agency receives about $1.7 million a year in tax money to provide emergency housing and utility assistance, job counseling, free bus tickets, and other services to some of the Dallas area's poorest residents.
State regulators remain dissatisfied with the nonprofit agency's explanations for shoddy renovations to a South Dallas apartment house for the homeless, although that issue remains unresolved. The state is mulling whether to demand repayment of approximately $400,000 or foreclose on the building, Department of Housing and Community Affairs spokesman Brian Montgomery said.
DCCAC's problems (detailed in two articles in the Dallas Observer: "Family First," July 31, and "Poor Relations," August 14) all have come during the tenure of executive director Cleo Sims, who has held the $60,000-a-year post since 1990. Nevertheless, even as the state appears close to shutting the agency down by cutting current funding, its board of directors remains firmly behind Sims.
"I'd agree there has been some mismanagement, but you can't just lay all the blame on Cleo Sims," said Anthony Bond, who since last fall has been president of DCCAC's board of directors.
He said Sims is "committed to this agency. I just think she has been wearing too many hats."
Montgomery said the state, which doles out federal money to 51 community action agencies, leaves personnel matters to local governing boards. But DCCAC obviously hasn't scored many points with the state by insisting on keeping its old management in place.
The state's demand for repayment includes $20,300 incurred when the agency entered into contracts with Sims' son, Harvey Scott, and two others without going through proper procedures. The state also had found that Sims hired her daughter to manage a low-income apartment house.
It wants repayment of the $3,111 for 15,311 minutes of phone calls that the agency's former board president, Charles Hunter, ran up on a cellular phone over a 15-month period. It wants repayment of $17,700 in "excessive expenses" that DCCAC spent at two annual board meetings.
The anti-poverty agency also must refund $941 for collect phone calls and long-distance calls that had nothing to do with helping the poor. Some of those calls, according to the state's findings and other sources, were made from area jails by Sims' relatives and their friends.
"We continue to have serious concerns," said Montgomery, the state spokesman. "We oversee 51 agencies, and the vast majority are run very professionally. They pass our monitoring and compliance reviews. This one has the most serious problems of all of them."
He said the state has "very little say" over DCCAC's management, but he added, "Perhaps change might be for the better."
Bond said the agency hired a consultant in October who concluded that Sims was simply overburdened with too many duties. He said that the agency is reforming its bylaws and rules, that an accountant now oversees all expenditures, and that a business manager is being hired. "I believe corrective measures are in place to make sure these types of problems will never come up again," Bond said.
Bond, founder of the Irving branch of the NAACP, said he has been unable to sit down with state regulators and discuss these changes because his agency sued the state in October.
In the suit, which was filed in Austin, DCCAC claims it was denied due process when the state canceled federal tax credits and funding for a low-income housing project in South Dallas. Citing continuing problems at DCCAC, state housing officials canceled about $3 million in tax credits in September for the agency's planned Southern Acres project, a 35-unit development to be built southwest of Fair Park.
"We had a written commitment for the tax credit and think we're justified in saying this was a breach of contract," said Bond. "We spent $90,000 to plan this. We had to pay $20,000 just to apply for the tax credits."
The agency's other publicly funded housing project, the Point Apartments, became the focus of the state's concern when it audited the agency late last May.
The state gave the agency more than $400,000 to renovate the 10-unit, two-story building four years ago. In May, a state inspector found sagging floors, broken railings, fire hazards, and plumbing leaks. A city of Dallas code inspector did another inspection in August and gave the building a score of 59; an 80 is needed to pass.
The state told the agency it was most concerned about the lack of competitive bidding on the project and an alleged personal relationship between the general contractor, Charles Roberson, and Sims. Bond said Roberson provided an affidavit denying anything more than a business relationship with Sims.
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Board member Khaleef Hasan, one of the few Sims critics on the agency's governing body, said Sims is steering the agency on a course that will end with the state's cutting funding and closing it down.
"She has total mental control of the board," said Hasan. "They believe whatever she tells them. She even got them to sue the state. I can't believe we've sued our own funding agency. I've never in my life heard of that happening."
The state, in its very slow and deliberate fashion, will decide in two weeks what to do about the Point Apartments and the huge sums those problems entail.
The agency has not provided the proper documentation about how Roberson was picked for the job, Montgomery said. "We are going to resolve this.