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Nonprofit diverts funds

By Greg Gelpi

The Clayton County nonprofit organization Youth Empowerment Project Inc. diverted money from a grant designed to train youths to pay its operating expenses.

This left the group owing the Georgia Department of Labor more than $160,000, but a repayment schedule has been worked out.

An independent audit discovered the problem, but pointed out that no money was missing, only used for purposes it was not intended for. But the situation was serious enough for one county official to "pull out" of a program with Youth Empowerment temporarily, the News Daily has learned.

The financial situation occurred at the time the county has been putting taxpayer money into the organization, most recently $30,000 in July.

"I take full responsibility for it," Glenn Dowell, executive director of Youth Empowerment Project, said of the financial situation, adding that he had been overseeing the academic side of the operation, rather than the financial side.

Dowell dismissed the financial officer of the 11-year-old organization after the audit.

The audit pointed to Chief Financial Officer Gary Furlong as the source of problems, Dowell said, adding that he immediately replaced him with Alfra Dean Fisher, former deputy director of the DeKalb County Division of Family and Children Services.

Furlong said the problems came down to politics and cash flow, adding that he hasn't seen the independent audit.

"I believe it's a political thing after Dr. Dowell," Furlong said.

Dowell told Furlong that political candidates "threatened" him for not supporting their campaigns in the most recent election, he said.

He added that money was used to cover operational costs of Youth Empowerment and that money wasn't available to pay the Department of Labor.

"If the money was there, the payments would have been made," Furlong said. "All organizations run into problems of cash flow. I don't see the problem."

Mary Margaret Garrett, the chief of Workforce Development for the Atlanta Regional Commission, said the commission's attorney recommended the group conduct the audit and that nothing illegal had been found "at this point."

Clayton County Juvenile Court is waiting to see.

The juvenile court worked with Dowell and Youth Empowerment Project to establish an evening reporting center in Riverdale about four months ago, but "pulled out to be on the safe side" upon learning of the financial difficulties with the Department of Labor, Clayton County Juvenile Court Judge Steve Teske said.

"The only time we ever gave him money was for two classes at an evening reporting center," Teske said. "That was before things came up."

The evening reporting center was a program to keep students who are in detention off the streets, since most crime occurs after school, Teske said.

Although the Juvenile Court System only has "limited" funds for programs and treatment, the court system does provide "oversight" for its funds, he said. A probation officer was onsite at Youth Empowerment Project to ensure the program was operated properly.

"It was successful as far as you can measure in two weeks," he said. "To the extent that these kids were in school and not out in the streets committing crime, it was successful."

Teske said the court system paid Dowell for the program, but that it hasn't given any other funding to Dowell or Youth Empowerment Project.

"People assume that just because an entity is involved in the court that it's paid by the court," he said, adding that Dowell volunteered much of the time he spent with the court system.

The nonprofit organization, dedicated to youth education, mentoring and counseling, according to its charter, contracted with the Department of Labor to provide job training and life skills training.

Youth Empowerment hired the department to provide the services in July 2001 and extended the contract each year since, the last contract being signed in May.

Youth Empowerment accrued a debt of $163,154.83 in that time.

The Department of Labor is charging 7 percent interest and a 10.72 percent administrative cost monthly.

Instead of going to the Department of Labor, money went to paying for "operational expenses," Dowell said. The money intended for the Department of Labor did not go to him and did not go to pay anyone else, and it was not used illegally, Dowell said.

"The first thing I did was call the Federal Bureau of Investigation because I feared that money was being laundered from Youth Empowerment," Dowell said. "We did not put our heads in the sand. It was a difficult time for us."

Dowell contacted the Atlanta Regional Commission that provided grant money for the job training, and hired BKR Metcalf Davis, an Atlanta accounting firm, as an independent auditor to review the nonprofit's finances. The firm found no illegal or "unusual" activity, including no evidence that "restricted" funds were used to pay the state debt, Dowell said.

Grant money often comes with restrictions that limit how that money can be used. Since much of Youth Empowerment's funding comes from grants, Youth Empowerment is restricted on how it can use that money.

Youth Empowerment has begun paying back the debt, according to the Department of Labor.

"As of (Monday), payment is up to date," said Sam Hall, the Georgia Department of Labor director of communications.

There were "ongoing conversations" between the department and Youth Empowerment, he said. It would not have been a situation in which Youth Empowerment suddenly learned of the department's intentions to collect the money.

The Department of Labor served as a subcontractor of funds provided by the Atlanta Regional Commission, Hall said.

The audit made a list of recommendations for improving Youth Empowerment's finances and for avoiding further financial problems, all of which were implemented, Dowell said.

Many of Youth Emowerment's problems are born out of "envy" and "politics," he said.

"There's a lot of envy in Clayton County of Youth Empowerment (because of funding)," he said. "What we do is take maximum advantage of the money we do have and use it to the maximum benefit of the community."

Along with grants, Youth Empowerment charges fees for participation in some of its programs.

Dowell said Youth Empowerment will meet the payment schedule agreed upon with the state by using funds raised by its daycare program.

Whereas in the past the daycare program allowed low-income families to participate at reduced and no costs, the daycare will have to charge everyone full price in order to make the payments to the state, Dowell said. The daycare program brings in about $1,400 a week.

Youth Empowerment also receives funding from the Clayton County Board of Commissioners, although the county admits not being able to closely monitor these funds.

"They've been part of our grant recipient program for a number of years," County Attorney Don Comer said. "We really don't have the personnel, the staff to conduct audits."

If the county has suspicion that funds are being used inappropriately, the county can conduct an audit, Comer said. The county did audit Youth Empowerment, but that was a "number of years ago" and could have "just been a routine audit," he said.

Dowell said no county funds went to paying the state bills and that the audit found no "intermingling" of funds.

Despite the problems, Youth Empowerment has enjoyed successes, Dowell said.

A Youth Empowerment SAT program resulted in 18 of 32 students earning a 1,000 or better on the standardized test, Dowell said. The rest of the students scored 900 or better.

The program didn't have the number of students Dowell wanted, but he attributed that to politics as well.

Bill Horton, former interim deputy superintendent, said Dowell approached the school system, seeking financial assistance with the program.

Although the school system never gave money to Youth Empowerment, the system did provide Dowell access to Riverdale High School as a place to hold the SAT program, Horton said.

"(The SAT scores weren't) a significant increase over what the county did as I remember," Horton said. "The program did not attract the numbers he hoped to. He hoped to have 40 to 60 students. I think the most he had was 20."

After a low turnout for the program, Dowell turned to the school system for more help, Horton said.

"He did ask us if we would reassign some of our kids," he said, adding the system never pulled students from its programs to place in Dowell's Youth Empowerment programs.

Youth Empowerment is refinancing its facilities and seeking "additional revenue streams," Dowell said. Youth Empowerment is not out of business and is positioning itself for the future.

"We anticipate paying every copper penny (to the Department of Labor)," he said. "We're not going out of business."

Since its 1993 incorporation, Dowell estimated that Youth Empowerment has helped more than 10,000 children. That number could not be readily confirmed by the paper.

Dowell also works as a liaison specialist for Atlanta City Schools, but said that the full-time job doesn't conflict with his part-time work at Youth Empowerment. Repeated efforts to get more details about Dowell's position with Atlanta City Schools, including his salary, were unsuccessful.

According to the IRS, Dowell paid himself $30,600 for working 20 hours a week in tax year 2002. He makes $31,200 currently.

The Georgia Secretary of State's Office lists Dowell as the initial registered agent of Youth Empowerment Inc. The other incorporators listed are Anne Plant, the Rev. Charles Grant, Eugene Hatfield, Judge Matthew Glaze, Eddie White and Judge Deborah Benefield.

"Tell me you're kidding me," Grant said about the diverted money, adding that he has had a "hands off" approach to Youth Empowerment. "I don't know what's going on there. When you have a relationship like we have, I didn't want him to think I was peeping over his shoulder, just like I wouldn't want him peeping over mine."

Grant works for Clayton County Community Services, and he said Dowell worked for him at one time. Dowell left to work on Youth Empowerment and avoid any conflict of interest.

Hatfield said that he knew all of the incorporators, having worked with them on several projects in the past, but didn't know he was an incorporator.

"This is news to me," he said.

If he is an incorporator, Hatfield said he never participated in any meetings or did any work with Youth Empowerment.

White said he no longer works with Youth Empowerment, although he did at one time.

"Once upon a time I sat on the board of directors, but I haven't been working with them," White said.

Youth Empowerment works out of an old church off of Ga. Highway 85 in Riverdale.

It has a staff of 16 and a payroll of about $30,000 a month, Dowell said. Although his daughter works as a consultant for Youth Empowerment, she isn't on staff. She writes grants for the nonprofit and has "quadrupled" the money she has brought in than the money she is paid

Fisher, who earns $20 an hour, is the second highest paid employee. Dowell is the highest, earning $30 an hour.

According to IRS documents obtained by the News Daily, Dowell earned $17,308 in 1998, $17,999.80 in 1999 and $30,600 in 2002. The 2000 tax form was unavailable. Dowell's salary was left blank in his 2001 tax form.