Rocky Mountain Development Council is receiving $190,000 from Lewis and Clark County to help it sustain some of its programs.
Eric Bryson, a member of RMDC’s board and the county’s chief administrative officer, said on Monday that $110,000 of that total payment will allow the organization to rectify an issue with the Head Start program that it operates. Head Start serves more than 260 children ages 3 and 4 in Helena.
Head Start receives federal funds to reimburse costs such as employee health insurance. However, while the federal money arrived to pay the $110,000 for health insurance, the funds appear to have been used for another purpose, Bryson said, and were not used to pay the insurance.
He was quick to say there is “no suspicion of any wrongdoing of any kind.”
Instead he points out that RMDC has a complex financial structure that has been cobbled together over the years that now lacks transparency.
“I think our expenses just got away from us and they just put the money in one pot,” Helen Fandrich, RMDC board president, said Tuesday.
The county is also providing RMDC with $30,000 toward the cost of meals for senior citizens that includes helping with the cost of the meals program at Eagles Manor, according to a memo by Bryson. Another $50,000 is being directed toward operating debt that RMDC youth programming has acquired.
RMDC offers many needed services in the county and Bryson and Fandrich stress the good that the organization does for residents.
“We just do so much good and you never know what you’re going to be called upon to do,” Fandrich said.
Bryson agreed and said, “It’s really an important organization.”
“Rocky’s programs keep people alive,” he added.
Debt, however, remains a significant issue for RMDC, and Bryson said that there is somewhere in the range of $1 million worth of debt facing the organization in the next 24 months.
Included in that figure is about $400,000 that RMDC owes Lewis and Clark County for health insurance premiums, he added.
The county’s historical contribution to RMDC has been for senior recreation programs and senior transportation service each year, the memo from Bryson states. This year, $174,584 was budgeted in the county’s general fund and $130,000 was provided through the senior citizens mill levy fund for a total of $304,584, which represents a 2.5 percent increase from the prior year.
The county also contributes $13,500 annually for holdover costs at the Montana Youth Homes, the memo notes.
When figures are added together, they represent an $863,000 fiscal year 2013 contribution to RMDC by the county, Bryson’s memo states.
Lots of funds to manage
According to the RMDC tax return filed for 2011, found online at the website GuideStar, the organization had total revenues of $11,473,668 and expenses of $10,931,663.
RMDC has also hired a finance director, Dawn Doyle. Doyle has been a part of the organization for a while.
According to the job posting contained on the Montana Nonprofit Association website, the RMDC finance director oversees all fiscal operations. The posting includes that RMDC has about 100 individual funds to account for and numerous programs.
The actual number of funds, Fandrich said, is 96 or 98.
Fandrich said the board was going to try to decide whether this was too many funds to keep track of.
RMDC directors agreed at last week’s special meeting to accept a state offer for a review of how the organization is functioning, Bryson said.
A memo from an RMDC committee recommended the board accept the offer of technical assistance in accounting that was extended by the state Department of Public Health and Human Services.
The memo states “based on our recent examination of our fiscal and management procedures, we request that you provide immediate assistance that you can and work with us to rectify shortcomings.”
Fandrich said that the board was receptive to whatever help the state could provide.
Based on the hiring of a new financial director and meetings with that department’s staff, Fandrich said that a plan was in place to complete the audit by the March 31 deadline, and she was confident it would be done.
But for Bryson, there is also a pressing need to see a cash-flow analysis beyond 45 days.
The organization is in the midst of a series of fiscal issues and held a special meeting in late December to consider ways to rein in spending.
The organization provides an array of services that benefit the elderly, the young and those in need of assistance.
While previous contracts provided RMDC with an abundance of cash that it could move from one account to another — discretionary income — it was able to support its projects that needed a financial boost.
However, the discretionary income has since dried up and RMDC’s executive director for 38 years, Gene Leuwer, has said that the board was not made aware that it was subsidizing some of its programs beyond what it could afford to spend.
The organization’s financial staffing has since undergone a significant change and is working to sort out the cash flow that directors need to know to gauge RMDC’s standing, he added after the late December special meeting.
Bryson said that he had requested last week’s special meeting, explaining that he is “not comfortable” with the financial information the board has been receiving.
In a summary of financial issues facing RMDC, he pointed out that there have been requests for months for program budgets and “as of this week, the agency continues to have more funds without budgets entered than with entered budgets.”
A cash flow analysis, according to Bryson’s memo, indicates that for the past 12 months “the agency is bleeding money, and the systems and budgeting processes don’t allow for an accurate projection of cash flow more than 45 days into the future.”
The only suggestion for immediate improvement is to go into debt and tap lines of credit with no plan for repayment.
Bryson said that, as a board member, he isn’t comfortable with this strategy.
Fandrich said the board is hopeful that the organization’s financial department will be able to provide the information that Bryson said he wants to see.
“I’m hopeful, that is all I can say,” she added.
The board also agreed last week to look beyond Florence Crittenton Home and Services, a licensed therapeutic maternity home, as a means of transferring a RMDC facility for girls.
The board agreed to ask Anderson ZurMuehlen & Co., the auditors for RMDC, if it could provide insight into the organization’s fiscal position, Bryson said.
Should the auditors agree to assist with an examination of cash flow, the company would not be eligible to perform the organization’s audit next year as it would no longer be an independent third party, Bryson said.
Unclear was whether participating in a cash-flow analysis would preclude the company from future audits for RMDC.
Outsourcing of property managed by RMDC remains an issue and was discussed at the late December special meeting and it was suggested to look for someone to undertake this responsibility. The need to cut expenses to achieve a profit was part of the committee’s recommendation to RMDC’s board.