Social-services agency will repay $55,000 to Allegheny County

Friday, August 01, 2003

By Steve Levin, Post-Gazette Staff Writer

The FamilyLinks social-services agency owes the county more than $55,000, according to an audit released yesterday by the Allegheny County Department of Human Services, but the findings clear the nonprofit organization of any malfeasance.

The audit, which covered fiscal years 2000 to 2002, concluded that the agency suffered from poor record-keeping, accounting and management oversight, particularly in its decision to spend nearly $6 million in bank loans and other monies for property acquisitions and other administrative operations.

FamilyLinks has arranged a repayment plan with the county, said Human Services Director Marc Cherna. In addition, the agency has revamped various accounting and procedural controls.

A second audit by the county controller's office is expected later this summer.

FamilyLinks has conducted its own audit, but has not released the results.

FamilyLinks was formed about two years ago by the merger of Whale's Tale and the Parent & Child Guidance Center. With more than a dozen offices in Allegheny County, the agency has a $20 million budget and about 340 employees, and provides services to 30,000 individuals through eight program areas.

In January, its chief executive officer resigned, followed soon after by its operating and financial officers. In March, the agency laid off 40 employees. Anonymous letters to Controller Dan Onorato's office and the Department of Human Services alleged serious financial improprieties, initiating the audits.

"There has been a change in management and the new executive director has been very aggressive in fixing some of those conditions," said Cherna. "I think it hurt them, but I think they're recovering very well. Anytime you have something like that it hurts you."

J.C. Dollar, the former chief executive officer, denied any financial wrongdoing in an interview at his Sewickley home last spring. He said he had resigned in order to take care of family medical problems, the same reason he gave in 2000 for resigning as chief executive officer of Holston United Methodist Home for Children in Greeneville, Tenn.

Dollar and his family still live in Sewickley. He recently applied for the top position at a nonprofit agency in Winston-Salem, N.C., but was not chosen.

"FamilyLinks was caught in what I refer to as the perfect storm," Dollar said in a brief interview yesterday. "Given the state of the economy and changes in leadership, it's just one of those things.

"When you compound that with a merger, it just really magnifies things tremendously."

The audit found that FamilyLinks owed the county $55,112 for overpayments made to the agency in fiscal years 2000-2001 and 2001-2002.

The audit did not investigate the agency's use of more than $1.8 million from its former foundation nor the use of $4.1 million in lines of credit from Citizens Bank.

In a late May letter to auditors Stephen M. Grimshaw, FamilyLinks' chief executive officer, wrote that that money was used "in part to support the development of ... administrative operations in pursuit of an overall improvement to the operations of FamilyLinks."

"We would prefer to agree with you that procedures were poor, [and] to assure you that we are making every effort to make sure the accounting errors of the past are not repeated, while at the same time [we] ask that the County recognize that FamilyLinks expended a large amount of its own resources, as well as borrowed funds, to supply services that were not reimbursed by the County."

Some of the money -- about $415,000 -- was spent to buy properties at 228 and 238 Shady Ave.

FamilyLinks officials have not commented since the audits began. In a statement issued yesterday, an agency spokesman said "as far as we know, FamilyLinks is still in discussion with the county and no financial decisions have been made, so we're not going to comment on anything having to do with the audit."

E-mail this story   Print this story