The Audacity of Hope

The Scope of HOPE Community Services

HOPE Community Services has been embroiled in controversy for the last several months since The Southside Messenger covered an illegal closed session in the July 4 edition. At that meeting, the Board was to discuss the cancellation of all funding from state and federal organizations and the closure of all programs at HOPE.

Since then, then-Executive Director Mary C. “Kitty” Smith has resigned and been replaced with an interim director, Henry Featherston. Six members of the Board of Directors have resigned or allowed their terms to expire; they have also been replaced. With new leadership, HOPE Community Services met with the Department of Social Services last week to discuss their designation as a Community Action Agency, a program that provides the organization with the majority of their funding. A decision is expected from DSS in the next week.

If DSS removes their designation, other CAAs in the surrounding area will be asked to provide services to the six counties that HOPE serves. If the designation is not removed, HOPE will begin the long process of rebuilding their organization from the ground up and regaining the public and government’s trust.

According to documents released in a June 15 meeting of a portion of HOPE’s Board of Directors, there were a variety of programs administered by HOPE including HeadStart, Weatherization, Project Discovery, EnergyShare, Virginia Community Action Re-Entry System, Homeless Prevention Programs, Resource Mother, and others. As of the June 15 meeting, funding to all of those programs had been suspended or cancelled.

On Wednesday, Jasper Hendricks stated that HOPE was in discussions to bring numerous programs back to the area including Project Discovery, VaCARES, Financial Literacy Classes, and Workforce Initiatives. Later this year, they’re reapplying with the Department of Housing and Community Development for the Weatherization program. The Energy Share program has already returned to HOPE and information is available Tuesday, Wednesday and Thursday from 9 a.m. to 5 p.m. (Call 434-315-8990 during those hours for more information.)

In addition, Hendricks stated that HOPE had received payments from the Department of Housing for the last invoice submitted in September 2012. According to an email from Willie Fobbs, III, “This invoice was not processed by DHCD when received due to the mounting issues at the time…” More than $32,000 was transferred, to be used to pay Putney Mechanical and Lowe’s in Farmville.

The Virginia State Police have opened an investigation into possible wrong-doing at HOPE Community Services. VSP Public Relations Director Corinne Geller confirmed that there was an ongoing investigation on August 5, although at this time, more information about the scope and purpose of that investigation is unavailable.

At the July 1 meeting of the Board of Directors, Executive Director Mary C. “Kitty” Smith stated emphatically, “I never ever wrote a check in the name of this agency. I don’t know how the finance system works.” Earlier in the meeting, she stated, “I take issue with insinuation that I handled money. I never wrote a check for this agency except for my own personal resources.” Further investigation has revealed numerous checks that were at least signed by Smith (and Board treasurer Howard Simpson), including at least two written to herself. Checks numbered 33097, written on June 3 for $8502.64 and 33098 written on June 6, 2013 for $303.74 were issued to Smith, for a total of $8,806.38.

In an addendum to the May 22 Finance Report, Smith provided a list of “payments Dr. Kitty Smith has made for the agency from her personal financial resources.” Those expenses included a $5,000 loan against Smith’s personal vehicle, (Smith asserted in an interview in the Farmville Herald that the loan was taken out to make the May 10, 2012 payroll), $93.92 for Head Start Policy Council, $148.99 to Southside Electric for the HOPE House, $201.84 for an “electric bill for Buckingham,” $601 for “water bill,” $310 for “mailings (packets to grantors),” $940 for “fuel (heat) for central office (Parker Oil),” $300 for “client (housing),” $100 for “client (fuel),” $32 for stationary and $30 for janitorial supplies. A note at the bottom states, “In addition, Dr. Smith did not receive a paycheck ($1408.00) on April 26, 2012, because there was not enough money in the payroll account to pay her as well as the other employees.”

Additional paperwork supplied in the addendum included a copy of a check from Benchmark Community Bank to Mary C. Smith for $5,000 and a deposit receipt from Bank of America showing a deposit of $5,000 into an account there. Also included were four “Payment Requests,” one dated December 7, 2012 for $201.84 with the notation “Electricity for Buckingham 1…,” one dated October 18, 2012 for $81.09 with the notation “Reimbursement of postage fees of Head Start Documents to Phila. PA”, one dated October 17, 2012 for $93.92 with an attached table check from Country Cooking showing a party of 14 with the words “Policy Council Meeting” written across the bottom, and one dated January 8, 2013 for $148.88. All four list the vendor as Mary C. Smith and show a vendor ID number of 1030.

The Financial Report includes a page titled “CSBG (Community Services Block Grant) Invoice Documentation Sheet” for the period between 3/1/13 and 4/30/13. It lists total expenditures for that period as $89,569.54. Those expenditures break down as follows: Salaries/Wages – $53,844.72, Fringe Benefits – $9,176.92, Consultants and Professional Services – $656.38, Travel – $2,692.30, Space Costs and Rent – $20,274.95, Consumable Supplies – $1,373.28, Lease/Purchase Equipment – $437.80 and Indirect Costs – $1,113.19.

The cover page of the financial report shows monthly expenses of $25,200. That amount is broken down into $8,600 for “Vendor Estimates for Central Office” (including $1,222.39 per month for phone service), $8,800 for payroll for five employees, $4,600 for payroll taxes, $1,200 for the loan payment on the HOPE House, and $2,000 a month for back taxes to the IRS.

Smith also stated in the July 1 meeting, “In terms of the IRS, I’ve got to say this. This is for the benefit of the press. IRS is holding my house.” She continued, “When IRS sent the letter saying that the agency owed them $100,000, and I told this to the board, IRS told me that they would put a lien on my home.” In an earlier interview with Smith, she indicated that, while payroll taxes had at one time gone unpaid, that the organization had made repayment arrangements and was current on their payments.

According to HOPE’s 2010 tax documents (Form 990, filed with IRS, covering the time period between July 1, 2010 and June 30, 2011, filed by Robinson, Farmer, Cox Associates out of Charlottesville and signed on HOPE’s behalf by Ernest E. Miller), HOPE received $4,826,305 in contributions and grants and an additional $6,598 in other revenue, bringing their total revenue to $4,832,903.

Of that total, $3,346,608 was paid in “salaries, other compensation, and employee benefits” to 279 employees. The breakdown includes $2,639,567 in salaries and wages, $27,273 in pension plan contributions, $455,514 in other benefits and $224,254 in payroll taxes. An organizational chart included in the June 15 meeting presentation shows only 66 employees, although they are not all named.

Another $1,619,352 was paid out in “Other Expenses,” broken down as follows: Other – $82,892, Client Services – $822,596, Supplies – $6,681, Communication – $37,649, Equipment and Maintenance – $16,733, Dues and Publications – $16,403.

Between salaries and other expenses, the expenses between July 1, 2010 and June 30, 2011 add up to $4,965,960, $133,057 more than their revenue.

They listed total year-end assets of $1,057,717, broken down as follows: Cash – $16,082, Pledges and Grants Receivable – $276,883, Accounts receivable – $1,026, Prepaid expenses and deferred charges – $10,048, Land & Building – $753,678.

The listed year-end liabilities of $758,195, broken down as follows: Accounts payable – $422,812, Deferred revenue – $29,265, “Advance from Department of Housing and Community Development” – $58,102, “Due to DHCD” – $60,019, Due to Head Start – $82,387, Note Payable – $87,310.

The forms go on to list all the Board’s (then) current officers, directors, trustees and key employees and their compensation reported on their W-2. Executive Director Mary C. “Kitty” Smith received $83,888 for a listed average 40 hours per week. Finance Director Roberta Thomas received $54,968, also listed at 40 hours per week. Seventeen Board of Director members, including Prince Edward County Board of Supervisor Howard Simpson, were listed as receiving $0 and working an average of 1 hour per week. No other key employees are listed.

More current tax documents are not yet available.