A few quick points before I address your specific questions. First, it would be helpful and in a spirit of cooperation, if you did not “ambush” us with multiple questions minutes before you post your story. What your approach tells us is that you’ve written your story, reached all your conclusions and it really does not matter what we say in response because your mind is made up. This is the “when did you stop beating your wife,” mode that the News should be above. Giving us more time to respond would at least preserve the illusion of your objectivity, as well as give us a fair amount of time to gather responsive facts.
Second, I see no where in your questions or story description, any reference to the legitimate, RFP’d, audit that we posted and publicized March 11. We continue to ask, why not?
In addition, we trust that your story will include the fact that Dunn, acting alone and improperly, did not seek an RFP for the service. [More detail below]. That is against the law — and surely you know this is the case with all or most non-profits — and should be reported. How does an individual, or two individuals, “contract” for a service that could cost the CAO upwards in the six figures unilaterally? I’m sure you will address that fact with your readers.
Finally, we supplied you with a letter from CTBK partner Kelly Besaw, a third party and the superior to Mr. DeVincentis, confirming our statement that no audit was started, so none was ended. Having someone schedule the start of an audit, or seek certain documents for an audit, is not an audit. No one at CBTK had the first clue what was happening at CAO. And to suggest otherwise, in your story or elsewhere, is omitting facts. When Besaw discovered an audit by another firm was nearing completion, he moved to break contact with CAO immediately, which we learned weeks later.
Please see my responses below.
-The contract was illegally negotiated and signed by Jenine Dunn on December 5, 2018.
-The Board never voted to hire CTBK. In fact, the Board never even considered such a hiring.
-Pursuant to the controlling funder regulations, the CAO Bylaws, and other controlling principles, engaging such services requires an RFP issued by CAO by management, review of the responses by management, and a Board action item to be discussed and specifically approved by the Board at a meeting with a vote – just like all other accounting services have always been required to be procured.
-None of the above was initiated at any time by Ms. Dunn or Ms. Shank and evidences a severe misunderstanding of their authority and roles and an intentional misleading of all other Board members, agency staff, and more importantly, state and federal regulators, who, like me, had no idea of any such contract until the middle of the week of March 18, 2019 when we discovered the existence of the illegal contract.
-We have reported the existence of the illegal contract to regulators and have asked for guidance on any consequences for the former Board members for this illegal behavior. As always, we will work with funders and regulators first in full transparency and compliance with all their guidelines before determining what further legal actions to take against Dunn and Shank.
-We have documentary evidence that Shank engaged in coercive false statements to agency staff to secretly and unlawfully obtain agency records to provide to CTBK. Neither I, nor anyone in CAO management or the Board knew of the Dunn/Shank illegal actions until mid-week of March 18, 2019.
-We are confident that Head Start grant funds are being spent as required by the granting source and Shank has never specified any improper expenditure to any we are aware of. We are very concerned that Shank and Dunn never reported such concerns to HHS or DOS, which appears to confirm that they are trying to further conceal other improper motivations.
-The CAO would like to thank the Buffalo News for exposing the illegal acts by Dunn and Shank and without your asking about a contract with CTBK on March 18, 2019, neither management, nor all the Board members who were deceived would have known about these additional illegal acts by Dunn and Shank.
L. Nathan Hare
Dear Mr. Hare:
The Buffalo News is preparing an article about the hiring of the accounting firm CTBK to conduct a forensic audit of CAO finances. You have said, in various written statements and emails to us, that no contract was ever signed and no audit begun.
However, The News has obtained the contract with CTBK, an engagement letter dated Dec. 5 and signed by then-CAO president Jenine Dunn on Dec. 6. The contract outlines a scope of work and indicates the engagement has begun.
Further, The News has obtained emails showing that one of the firm’s CPAs, Matthew J. DeVincentis, was reaching out for CAO financial documents and scheduling a meeting at CAO headquarters when Dunn and other directors were dismissed. Consequently, the firm ceased its work.
— Were you being truthful when you told The News in an email on March 19 that there was no contract? You wrote: “CAO never signed such a contract and has never seen such a contract.” Further, you indicated in the email that you had talked with CTBK about its engagement. Did you learn from CTBK that there was a signed contract but state the opposite, knowing you were making a false statement?
— Are you making a truthful statement when you say CTBK’s engagement had not begun? As mentioned, the firm’s DeVincentis had identified some of the specific financial documents he needed and was seeking to obtain them. Further, he was arranging a meeting to do detailed testing at CAO headquarters. Doesn’t that indicate work had begun? Do you feel the need to correct your statements?
–One former board member who wanted a forensic accountant hired, Jennifer Shank, tells us that members were concerned that Head Start grant money was being diverted to other needs, in violation of grant provisions. Can you assure taxpayers that Head Start and Early Head Start grant money is being used in accord with grant provisions?
— Finally, in your March 19 email, you state that if a contract with CTBK exists, it would represent an illegal act against the CAO and you would contact law enforcement. This apparently reflects your contention that the board’s vote to hire an auditor was an illegal one. Our question: Do you intend to contact law enforcement? Which agency? And when will you do so? Perhaps you can provide us with your letter or communication when you do so.
Thank you for your attention to these matters.
We will be posting our article online this morning, so we hope you will respond promptly.
Feel free to contact us if we may clarify these questions in any way.
The Buffalo News