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Massachusetts State Auditor Accuses Non-Profit Organization With Misuse of Taxpayer Money and Workers´ Compensation Fraud

The Massachusetts State Auditor has revealed that a non-profit human services provider in Western Massachusetts that serves mentally ill and emotionally disturbed children has corruptly used over $1 million in state taxpayer money. They are additionally accused of paying an employee´s workers´ compensation insurance claim with state money during a time period in which their workers´ compensation had lapsed.

In a report released by the auditor´s office, the Easthampton-based Northeast Center for Youth and Families Inc. has allegedly misused funds over a five-year period. The organization serves approximately 600 mentally ill and emotionally disturbed children in Massachusetts. The organization also operates in Connecticut.

State Auditor Suzanne Bump said, “We want to ensure that human service providers like the Northeast Center are spending public funds legally, appropriately and wisely to maximize every dollar and help the greatest number of physical and emotionally needy children, adults and families.” She described that this situation was “another side of the coin of waste, fraud and abuse.” In response to the audit´s findings, the organization responded, “It is possible that we will continue to disagree with one or more of the Auditor’s findings…In any event, we will cooperate with the Commonwealth in its prescribed process for the resolution of audits.”

Auditor Bump reported that the center sent higher cost information to the Department of Youth Services between 2006 and 2008, which resulted in an unfounded overpayment of more than $650,000 to the organization. They also allowed their workers´ compensation insurance to lapse for 21 days in 2007, during which time an employee was injured on the job and was paid $52,073 to cover medical expenses, lost wages and a settlement. In this case, the state auditors determined that the agency used over $7,000 of state funds to pay the claim. The center also reportedly improperly used $406,360 to cover out-of-state losses in Connecticut and the $1 million amount of bonuses that were given out over a three-year time period is now being reviewed by the Department of Youth Services.

A former bookkeeper for 27 years at the organization, Cecile Guilbault, commented “They’ve been doing unethical things for years…I’m glad that finally, after all these years, the state has finally caught up with them.”

Auditor Bump requested that the organization return all fraudulently used funds to the state.

Sources:

State audit finds that Northeast Center for Youth and Families misspent money, Gazettenet.com, August 26, 2011
Audit: Human services provider misused $1m in taxpayer funds, Boston.com, August 25, 2011
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