Domestic violence agency shuts without warning amid irregularities

A domestic violence and sexual assault agency serving victims of abuse in Jackson County abruptly shut its doors last week after more than three decades in operation.

REACH of Jackson County has been plagued for two years by an on-going funding crisis, but the sudden closure came amid questions about internal accounting irregularities.

The director and finance director were fired and seven other employees put on furlough.

This leaves victims of domestic violence and sexual assault in Jackson County without a local agency to turn to. They now must rely on help from neighboring counties. 911 calls from victims are being rerouted to Macon County.

“No client will go unserved — none,” said Ann VanHarlingen, executive director of REACH of Macon County. “We are providing room in the shelter, court advocacy, whatever an individual or family from Jackson County needs, we will provide.”

The domestic violence agencies from neighboring Swain and Haywood counties have pledged help as well, including Swain/Qualla SAFE and REACH of Haywood County.

Lisa Barker, the director of SAFE in Swain County, cautioned, however, that Jackson County’s leaders must figure out some other means, long-term, of helping victims living in the community — these small nonprofits all have limited resources and shallow purses, the very crux of the problem that ultimately destroyed REACH of Jackson County.

“It is very important that each county have the services available in that county,” Barker said. She noted that it places additional hardships on victims, who are already in crisis, if they are forced to seek assistance instead of finding help readily available within their home communities.

Children are often caught in the middle of domestic violence. Four-dozen children were among those housed in 2010 in the domestic violence shelter run by REACH of Jackson County.

 

Shutdown came rapidly

Board members of REACH of Jackson County aren’t saying much. In fact, all they’ll say about the matter is contained in a written statement released early Monday by board Treasurer Tommy Dennison.

“Due to uncertainty regarding our financial issues, REACH of Jackson County had to close on Feb. 9,” it stated in part. “We are very saddened that this has occurred but it was the only way we could fully understand the situation. This was a very difficult decision for the board to make.”

The budget for REACH this fiscal year was approximately $400,000, down from $1 million just two years ago. Grants made up most of the budget, but the agency had other sources of revenue, too. Jackson County has been giving REACH $35,000 for operational expenses on an annual basis since 2007.

County Manager Chuck Wooten said he was informed that an auditor is reviewing REACH’s accounting records, and that board members had expressed confusion over the true situation of the agency’s finances.

Here’s what happened: On the morning of Thursday, Feb. 9, there was a REACH board meeting. Later, REACH Board President Rich Peoples came to the agency’s offices just off N.C. 107 and fired REACH Executive Director Kim Roberts-Fer and Finance Director Janice Mason. He furloughed the other employees.

In an extensive interview just after she was fired, Roberts-Fer detailed the events leading up to the terminations. While the agency has been through financial struggles, she said there were adequate funds to keep it running. At the time of the interview, it was not yet clear that the REACH board would totally shutdown the agency.

“I don’t see why, after all we have done, that they would give up now,” Roberts-Fer said. “With or without me, that’s not the point — there are too many women depending on them.”

 

Payroll tax problems

REACH eked out a day-to-day existence. The agency had no piggy bank, and no real bank that was willing to extend credit — REACH was turned down twice when it sought loans. The agency missed payroll at least twice and had its water cut off once for nonpayment of bills.

The financial straw breaking the camel’s back, however, seems to have come when board members learned that REACH owed $47,000 to the Internal Revenue Service. REACH had failed to pay three quarters worth of payroll taxes last year. The amount owed included fines and penalties as well.

Roberts-Fer said there was nothing sinister involved. Partly, the finance director, Janice Mason, didn’t realize she was supposed to remit payroll taxes regularly, according to Roberts-Fer. But, cash flow problems clearly played a major role.

“Her only goal was to keep the agency going. What she was doing was paying when she got the money. But, it kept getting further and further behind, and basically, she didn’t have the money,” Roberts-Fer said.

The IRS showed up. A deal was worked out. REACH would pay $700 to $1,000 a month, Roberts-Fer said, with the expectation that the fines and penalties probably would be waived once the taxes were paid.

“Once I got the information, I shared … with the board and let them know we were in contact with the IRS,” Roberts-Fer said, adding that she went without her own paychecks in November and December to try and help the agency recover financially.

This wasn’t the first accounting issue at REACH.

Mason also failed to properly deposit retirement plan contributions into two employees’ accounts on several occasions, Roberts-Fer said. When employees elect to have part of their take-home pay withheld and put into a retirement plan, the money is supposed to be deposited regularly.

That money was paid back, but the amount of interest involved remain points of contention with the employee and former employee involved, she said.

The motivation again seemed to be plugging cash-flow shortfalls to keep the agency going.

“(The finance director) had been for years charged with paying the bills with no money. She inherited a system; she worked within it,” Roberts-Fer said.

New guidelines were put in place to standardize and regularize the agency’s methods of doing business, she said.

“Everybody makes mistakes. For an organization, the question is, do you respond to the problem? We did,” Roberts-Fer said.

 

REACH’s financial problems longstanding

The financial woes of REACH of Jackson County weren’t a mystery. Exactly one year ago this week, Roberts-Fer warned that the financial situation was so bleak the nonprofit faced the possibility of shutting down.

Before Roberts-Fer took over three years ago, REACH had opened a $1.1-million transitional-housing complex for victims trying to escape abuse back in 2001. It was a questionable financial venture from the get-go: The nine-apartment village, no matter how skillfully operated and managed, would never actually generate the funds to pay the loans, much less keep pace with general repairs and upkeep. The only income to offset the expenses was rent from the tenants, and even if fully rented, it would not pay the mortgages and expenses. The loan amount owed was $840,074.

The REACH village went into foreclosure, and associated costs bled dollars from the agency. Recently control of that housing complex shifted to Mountain Projects, a nonprofit that administers programs to benefit the needy and elderly in Haywood and Jackson counties.

Roberts-Fer said REACH of Jackson County also had been overspending during those years, including dipping into, and ultimately depleting, emergency financial reserves.

Even the agency’s thrift shop had been barely breaking even.

Adding to the difficulties were sky-high insurance payments on the agency’s emergency shelter after Bonnie Woodring, who was seeking protection from an abusive husband, was gunned down by John Raymond “Woody” Woodring in September 2006. He shot her inside the shelter after muscling his way in. Woodring later killed himself.

Additional security measures at the shelter were added in the wake of the shooting, another expense for REACH.

But perhaps most critically, at least when it came to the agency’s financial wellbeing, grants and other funding streams REACH relied upon have virtually dried up. Macon County’s VanHarlingen said her agency also has faced increasing financial constraints because of the overall economic climate.

“It is difficult for everybody,” she said.

In response to the financial crisis, Roberts-Fer had cut the number of employees at the agency and streamlined programs to barebones levels: operating an emergency shelter, offering legal advocacy and maintaining a hotline.

Jackson County Manager Chuck Wooten raised the possibility of combining some elements of the individual agencies in the region to offset costs. But, VanHarlingen cautioned that immediate shelter and help needed to be available in individual communities. At one time REACH of Macon County was an extension of the Jackson County agency.

“When we were the Macon outreach for Jackson County, that meant sometimes transporting a client over Cowee on a snowy night,” she said.

The need for help in Jackson County, REACH or no REACH, isn’t likely to disappear.

During fiscal year 2009-10, REACH of Jackson County received more than 400 crisis-line calls, provided emergency shelter for 37 women and 48 children, and was involved in 269 counseling sessions.

Wooten described the need as critical and said he expects REACH’s demise to be a topic of discussion at the Feb. 20 Jackson County Board of Commissioners meeting.

Domestic violence agency pulls through financial crisis

REACH of Jackson County continues to struggle financially, but fears this winter that the agency might actually shut down now seem unlikely.

The “village,” a transitional-housing complex for women escaping domestic violence, was bleeding dollars from the nonprofit organization. The complex has since been taken over by Mountain Projects, and that has certainly helped REACH’s financial outlook, said REACH Executive Director Kim Roberts-Fer.

But even more importantly, she said, REACH is a leaner, meaner, anti-domestic violence fighting machine … or something like that, anyway.

“Sometimes a crisis can get you to rethink, and I think this has put us in a place where we will be even more efficient and effective,” Roberts-Fer said.

The near financial meltdown has taken its toll, however. The projected budget for REACH this fiscal year is $400,000, down from $1 million just two years ago. And the staff is down, too, with nine positions slashed: half of the people who once worked for the nonprofit are gone.

What’s left, Roberts-Fer said, is the core, essential duty that rightfully belongs to an agency such as this: the ability to help victims of domestic violence during times of crisis.

The hotline is manned, the money-raising thrift shop is open, and the workers remaining for the agency are being cross-trained to handle a multitude of services. The days of specializing are over, Roberts-Fer said, and so are nice-but-not-essential services, such as long-term counseling for victims. That’s being farmed out into the community when there’s a need.

The continued viability of the nonprofit hinges on two critical points: continued grant money from a dollars-strapped state, and the ability of REACH to ride out a four- to five-month expected delay in receiving that funding. These days, North Carolina is slow to put the checks in the mail, and agencies that desire solvency have learned to stash money or use lines of credit from banks to ride out the drought that begins with each new fiscal year.

REACH, however, has no piggy bank, and no real bank that is willing to extend credit — the agency went into foreclosure proceedings with the village, subsequently missing payroll twice and even seeing the water cut off for nonpayment of bills. REACH isn’t exactly the kind of customer most banks will open their vaults to.

Money woes or not, the need for the nonprofit’s services are great; however, during fiscal year 2009-10, REACH of Jackson County received more than 400 crisis-line calls, provided emergency shelter for 37 women and 48 children, and was involved in 269 counseling sessions.

Finance Director Janice Mason said the thrift shop isn’t making much money, but that it is holding its own. One positive sign is that donations are up, she said.

Roberts-Fer has warned her staff that she cannot guarantee all the hard times are over, or even that the agency might not again miss payroll. Still, she remains optimistic.

“Progress towards stability has been slow, but there is definite progress,” Roberts-Fer said.

 

REACH fundraiser

A REACH of Jackson County fundraiser is set for Saturday, June 18, from 6:30 p.m. to 10:30 p.m. at the Country Club of Sapphire Valley. Tickets are $75 per person. The evening includes dinner, drinks, dancing and gaming, with a special appearance by the Gamelan Ensemble. 828.631.4488 ext. 207.

REACH village thrown a lifeline: Money problems for agency not solved, however

Mountain Projects might take control of the REACH village in Sylva, ensuring the low-income housing would remain available to area residents in need, especially victims of domestic violence.

This does not mean, however, that REACH of Jackson County, an anti-domestic violence agency, will have shed its well-publicized financial woes. The nine-unit village, built in 2001 for $1.1 million through federal and state loans, precipitated a money crisis for REACH because the nonprofit couldn’t meet loan payments.

Even if Mountain Projects saves the village from foreclosure, REACH must come up with between $100,000 and $150,000 to keep operating for several more months until state grants come through (the financial heartbeat of many do-good agencies such as REACH).

North Carolina has taken to doling out grants about four months into each fiscal year, and as a result, agencies that desire solvency have learned to sock-away money. REACH has none in the piggybank. The agency has missed payroll a couple times, and had the water cut off to the village for nonpayment of bills, among other problems.

The Jackson County Board of Commissioners this week agreed to send a letter on Mountain Project’s behalf asking for a community service block grant for $600,000.

Mountain Projects is a nonprofit that administers programs to benefit the needy and elderly in Haywood and Jackson counties. Patsy Dowling, executive director, said the federal loan agency and REACH asked Mountain Projects to take over the village. Initially, Mountain Projects balked at assuming a loan of $840,074, but with a plan in the works to seek grant money, the agency said OK. The remaining balance of the loan will be paid by the N.C. Housing Finance Agency.

“We are very happy that the county commissioners agreed to partner with Mountain Projects to apply for funds to allow Mountain Projects to take over the village,” said Kim Roberts-Fer, executive director of REACH. “Our financial situation does not allow us to continue to maintain the village for the several months it will take for this process to be completed. We will be contacting (the note holders) to discuss possible ways to allow Mountain Projects to take over the project sooner. If no options are available within a few months, REACH will be unable to continue paying to maintain the property.”

Decades of helping domestic violence victims could end

The financial situation facing REACH of Jackson County is so bleak the nonprofit is facing the possibility of shutting down, leaving women and children who live in abusive relationships nowhere locally to turn for help.

The nation’s economic downturn, coupled with what seems to have been terrible business decisions by the agency itself, have threatened to end the 32-year history of REACH.

The nonprofit in November 2001 opened a $1.1-million transitional-housing complex for victims trying to escape abuse. The “village,” as it’s dubbed, is now in foreclosure. Associated costs continue to bleed dollars although REACH is no longer making loan payments.

A couple of caveats: First, the current executive director of REACH, and the board members who oversee the agency, were not the ones making the decisions that helped land this anti-domestic abuse group in such dire straits.

Secondly, who can in good conscience flatly assert the prior board’s desire to build the village was a bad one? The federal government and state government approved the concept, local leaders joined in the general celebration when ribbon-cutting time came, newspapers across the region published articles and editorials that were supportive and full of acclaim; not one reporter, including this one, ever attempted to crunch the numbers themselves.

And, indeed, maybe the blame lies with nobody, but instead is the inevitable result of an impersonal crashing economy. Hard times certainly brought down bigger prey than this one small nonprofit group: whole housing developments went under. Banks went under. During the last election, Democratic control of the state and nation went under. Now, REACH, too, might go under.

The facts are these: If the people of Jackson County want the anti-domestic violence agency to continue operations, three things must happen. Wallets must open, volunteers must step forward, and the agency must successfully and completely reinvent itself.

 

Hunkering down

There is a certain bunker-mentality feel when you visit the administrative offices of REACH of Jackson County these days. Executive Director Kim Roberts-Fer and the agency’s finance director, Janice Mason, are consumed with counting pennies. The two women’s workdays, and even some of their off-work hours, are spent discussing and mulling over how to best spend what they do have.

No money hasn’t meant no need: During fiscal year 2009-10, REACH of Jackson County received more than 400 crisis-line calls, provided emergency shelter for 37 women and 48 children, and was involved in 269 counseling sessions.

No matter what happens to the nonprofit agency, Jackson County won’t be getting out of the domestic violence caretaking business, said Bob Cochran, director of the county’s Department of Social Services.

“If REACH weren’t there,” he said, “we would have to look at other ways to provide these services as a county and as a community.”

There are a few counties in North Carolina where local government does directly provide such services. Cochran really hopes it doesn’t come to that, however. He wants REACH to survive. Cochran said he intends to provide the agency’s workers with whatever support he can, including speaking on the nonprofit’s behalf to county leaders.

“REACH is just critical,” he said.

 

‘The numbers didn’t work … from Day One’

Shortly after she and her husband left Maine two years ago and Roberts-Fer started her new job in Jackson County, she had a terrible realization, one of those ‘Oh my God, what have I gotten myself into’ moments.

“The agency was in financial trouble the day I came in,” Roberts-Fer said.  

REACH didn’t have enough money to make payments on the loans they’d taken out. The nine-apartment village, no matter how skillfully operated and managed, would never actually generate the funds to pay those loans, much less keep pace with general repairs and upkeep. The only income to offset the expenses was rent from the tenants, and “even if fully rented, it does not pay the mortgages and expenses,” the agency’s executive director said. “The numbers didn’t work, and they didn’t work from Day One. We told them (the note holders), to go ahead and foreclose. Take it.”

 

The vision

The village is a complex of one-, two- and three-bedroom apartments and a community center. There is a playground and commons area. As envisioned, the village apartments would serve domestic-abuse victims from Haywood, Jackson, Macon, Swain, Graham, Clay and Cherokee counties, along with those from the Cherokee Indian Reservation.

A decade later, however, and the dream is dead. The two note holders, the N.C. Housing Finance and the U.S. Department of Agriculture, are well into the foreclosure proceedings.

Adding to the problems: Insurance payments on the agency’s emergency shelter went sky-high after Bonnie Woodring, who was seeking protection from an abusive husband, was gunned down by John Raymond “Woody” Woodring in September 2006. He shot her inside the shelter after muscling his way in. Woodring later killed himself.

Additional security measures at the shelter were added in the wake of the shooting, another expense for REACH. It was critical that the agency reassure other domestic-violence victims they would find safe haven at the emergency shelter. Roberts-Fer said the shooting cast a long shadow over REACH: financially and emotionally, and that the legacy continues today.

There have been additional money woes: Water to tenants has been cut off at least once because REACH failed to pay the bill. The agency’s payroll was missed twice. Health insurance coverage lapsed for a time. Everyone kept working anyway, and eventually the agency’s employees did get paid — at least they did until about half of them were laid off as part of cost-savings measures. Today, there are seven fulltime REACH employees and two part-time workers. Additional staff reductions are likely, Roberts-Fer said.

Another, unidentified local nonprofit is weighing whether to continue offering low-income housing at the village, located just off N.C. 107 near Wal-Mart, but REACH wants shed of its role in the project. And as quickly as possible: Just keeping up with maintenance is proving too large a financial drain on the cash-strapped nonprofit. Selling it proved impossible because the village was worth less when appraised than what REACH owed on it, Roberts-Fer said.

As quickly as a new emergency shelter is ready, the agency plans to abandon the village lock, stock and barrel. The tenants in the village, she said, have been warned. Boxes of items are stacking up on the steps, waiting to be moved to the new location.

 

Bigger problems still loom

“Even then, though, we are going to be in trouble financially,” Roberts-Fer said.

The agency’s thrift shop is barely breaking even. Donations are down, and buyers don’t seem much interested in what items the REACH thrift shop does have to offer, she said.

Grants and other funding streams are drying up as North Carolina grapples with a shortfall numbering in the billions. And even more critical: A somewhat obtuse administrative detail on the state’s part, which is choking REACH’s finances, and is reportedly causing other nonprofits in North Carolina trouble, too.

The state once paid grant money upfront, apparently recognizing that the wiggle room for most small nonprofit agencies is marginal at best. No more — these days, payments don’t begin until about four months into the fiscal year, creating a cash-flow crunch.

“Last year, the only thing that got us through was a particular grant that gave us a little room to survive,” Roberts-Fer said.

That’s not how the situation is shaping up for fiscal year 2011-12, which starts July 1.

“Worst case, we won’t be able to function,” she said bluntly.

Why? There is no cash reserve. Zero. Nothing. Nada.

Banks, understandably, haven’t been eager to extend a line of credit to REACH. They’ve been turned down twice, even though one of the board members is an experienced banker. His bank, in fact, said no thanks.

Here’s the solution, perhaps the only means of saving REACH of Jackson County: A fairy godmother, or a slew of community donors, come up with a cash reserve for the agency of between $100,000-$150,000. This would give REACH the money needed to ride out the state’s Scrooge-like methods of doling out funds. Additionally, this three-month reserve fund would provide REACH the money needed in the future. The budget, Roberts-Fer said, would be stabilized.

“The board has already agreed we’d only use the money as cash flow against receivables,” she said.

Additionally, REACH is streamlining operations. Only essential, core services are being offered: the REACH crisis line, for example, the emergency shelter and legal advocacy.

“We’re determined that this will not be the last year for REACH,” Roberts-Fer said.

REACH funding called into question by commissioners

A non-profit that helps abused women escape domestic violence could be facing a budget cut by Jackson County commissioners this year.

Victim’s family sues REACH for negligence

REACH of Jackson County, a non-profit that aids victims of domestic violence, is being sued by the family of a woman shot and killed at a domestic violence shelter last September by her deranged husband.

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