No One Watching Minneapolis Nonprofit Until Raid and Closure

by Gary Snyder

State officials raided the embattled Community Action of Minneapolis, a nonprofit organization, seizing records, files and computer hardware.

The Star Tribune first reported that a state audit found that leaders of the organization misspent more than $800,000 in taxpayer money on travel, a celebrity cruise, spa visits and even a personal car loan for its chief executive. The audit, covering 2011 to 2013, concluded that the organization spent too much on administrative costs and not enough on its mission, providing winterization, heating assistance and career guidance for low-income Minneapolis residents.

Leaders with Minnesota Community Action Partnership, the umbrella group for the state’s community action organizations, said the raid is a crucial and needed turning point.

Auditors began probing the Minneapolis organization after seeing administrative costs creep up higher than similar organizations.

Minneapolis City Council members Blong Yang and Abdi Warsame, who were recently appointed to the board, abruptly resigned, hours after auditors arrived. City Council President Barbara Johnson said she were “extremely disappointed by this entire situation.” Johnson served on the board during the time covered by the audit, but selected an alternate to serve on her behalf. Johnson said previously she was not aware of misspending by the director.

Bill Davis, the organization’s longtime chief executive, defended the financial management of the organization, which gets about half its funding from tax dollars. He said they sent the state more than 100 pages of documents to refute the most damaging findings, but state leaders never included it in the final report.

Davis and the board can appeal the state’s decision.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)