A state board should return to the federal government more than $280,000 in funding for services for Arkansans with developmental disabilities because the money was not spent within required time frames, state auditors said.
The money was awarded by the U.S. Department of Health and Human Services' Administration for Community Living to the Arkansas Governor's Developmental Disabilities Council, which distributes the money in the form of grants and contracts with nonprofits and other entities that serve the disabled.
Returning the money would reduce the amount the council has available for grants.
The council receives about $750,000 per year from the federal agency. It is required to spend at least 70 percent of the funds on services for the disabled, with the remainder going toward salaries and other administrative expenses.
The federal funding must be obligated by the end of the fiscal year after the year the money is awarded to the council. The money must then be spent by the end of the fiscal year after that.
Jim Luker, director of the Arkansas Health Service Permit Agency, said the council fell behind on awarding grants. In order to spend all of its funds within the required time frames, the council reallocated some money it had been awarded by the federal agency in earlier years from grants funding to administrative expenses.
For instance, the council used some money that had been awarded in previous years to pay administrative expenses in the federal fiscal year that ended Sept. 30.
In an Aug. 19 report, state Department of Finance and Administration auditors said the reallocated money had not been obligated within the time frame required by federal rules.
They identified $282,342.33 that should be returned to the federal agency.
Council officials disagree with the auditors, however, and have asked federal officials for a ruling on the issue.
"My personal opinion, at the end of the day, is that money is not going to have to be paid back to anybody," council Chairman Matthew Glass of Marion said at the council's quarterly meeting Thursday in North Little Rock.
In the meantime, Luker, whose agency monitors the finances of the council, said in a letter to the council Tuesday that he will not allow the questioned money to be spent unless the Administration for Community Living authorizes it in writing.
The 26-member council is one of 56 councils throughout the country and U.S. territories that are responsible for identifying the needs of the developmentally disabled and distributing money from the Administration for Community Living.
Luker said Arkansas' council fell behind on awarding grants due to turnover among its staff of five employees.
Regina Wilson, hired as the council's director in September 2010, was fired by the council in October 2012. She has sued the council in Pulaski County Circuit Court, saying the council retaliated against her for reporting waste.
In court filings, the council has denied the allegations, saying she was fired because of "poor performance and other deficiencies."
Wilson's replacement, Brenda Mercer, has been on leave since September and notified state officials that she's retiring, Luker said.
All of the council's other employees have been working in their jobs for less than two years, Luker said. During one recent year, the council did not make any grant awards, he said.
Among the members of the council is Tom Masseau, director of Arkansas Disability Rights.
Justin Nickels, a spokesman for the federally funded advocacy group, said it would be "disappointing" if the council is forced to return the federal money. But he noted that the council's staff has experienced "a lot of transition and staff turnover recently."
"Now that it's stabilized, we look forward to working with them in the future," Nickels said.
Metro on 12/12/2014