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Children's shelter struggling after accountant's arrest

By Daniel Silliman

dsilliman@news-daily.com

In the wake of a bookkeepers' arrest on embezzlement-related charges, Rainbow House has been struggling financially, but the Jonesboro shelter for abused and neglected children is moving forward.

"We've really struggled," said Executive Director Greg Sterchi. "We're surviving, but it's been a really tough, tough year."

Almost nine months after bookkeeper, Calene Dunn, was arrested on charges of forgery and theft, with allegations placing the embezzled amount at about $500,000, Rainbow house is running in the red, with an $80,000 deficit. Sterchi said the shelter, which receives about 13 percent of its finances from donations and fund-raisers, is in a phase of "rebuilding trust."

Rainbow House saw cash contributions drop dramatically, following Dunn's arrest in January, Sterchi said. In December, community groups had raised about $27,000 for the house, and were then shocked to hear of the theft.

"Understandably," the director said. "They're cautious."

Some supporters switched their contributions into non-cash items, like gift certificates. Others volunteered to pay a bill, rather than put money into a bookkeeper's hands. The shelter's finances were hurt further, when a state grant was discontinued, due to a policy shift in the Legislature.

Sterchi, who has no background in accounting, and had only taken the helm of Rainbow House a few months before the embezzlement was discovered, said he wasn't expecting the significant financial struggle. In his quarterly report, released in the fall, Sterchi wrote that taking over at Rainbow House, after previous director Phil Koun's 18-year management, seemed like an easy task.

"Just keep the ship on its course, maintain the community partnerships developed over the years, and build on the work accomplished over the past 18 years," he wrote. "None of us could have anticipated or predicted the year that lay ahead ... Either of these crises could have caused Rainbow House to veer off course, or worse, sink."

Regardless of the shelter's financial struggles, though, Sterchi said Rainbow House has continued to help the 16 to 22 children in its care. The children, who've been placed with the shelter for emergency care, have never gone without food or clothing or Christmas presents because of financial problems.

The staff, of 22 full-time and 11 part-time employees, has stepped up, and has done without to make sure the children's needs were met.

The process, Sterchi said, created a strong sense of solidarity in the staff.

Many supporters also remained loyal, and there's hope the organization's books will soon be running in the black. Between July and September, Rainbow House raised $6,000, a number that's in step with fundraising results for the same period last year.

Sterchi looks for the holiday-giving season to pull the shelter out of its fiscal slump. The organization is also working to change its bookkeeping practices to ensure above-board accounting. Sterchi said the group has abandoned the practice of a signature stamp, so the executive director has to approve large purchases. Two people now open the mail and take in the checks. There are more treasurer reports and the books are balanced more than once a month, to keep everything under close watch.

The shelter has also been bonded for employee-theft, something Sterchi said Dunn had declined to do.

Rainbow House is also trying to shift it's funding base, so that it depends more on grants. "We want to be majority funded by grants, that we're busily applying for," the director said. "We do appreciate every $15 check from every Sunday school class, but it's sporadic. It's not real predictable, which is why I want to get more grants, which are regular, instead of having to scrape by every month."

The shelter's largest grant, an annual $175,000, comes from the Clayton County Board of Commissioners.

A fundraising event -- an art show and wine tasting -- is planned for Friday, Oct. 27. It will be held at 5344 Hunter Road, in south Fulton County, at the Association of Black Cardiologists' event facility, from 6 to 10 p.m. There will be art from around the region and from the children who've been cared for by Rainbow House, on sale and to be raffled.