ProvPlan’s Chair Spies Refuses to Answer Questions About Financial Crimes

Monday, September 26, 2016

 

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Dick Spies, Chair of the Board, refuses to answer questions

Dick Spies, Chairman of the Board of the Providence Plan, is continuing to refuse to answer questions about when money was stolen from the organization, how much was stolen, what funders were impacted, and was there sufficient financial oversight by the Board.

According to ProvPlan, a nonprofit whose stated mission is to "improve the economic and social well-being of the city's residents" (and who receives millions in state and federal funding), hundreds of thousands of dollars were stolen by the Finance Director over a multi-year period and the organization claims that the theft was limited to one individual — Charles Denno.

Denno was forced out in late July, and this month, now-former executive director Patrick McGuigan resigned under a cloud of uncertainty.

For weeks, GoLocalProv has been asking questions, but the organization has refused to provide Spies for an interview.

On Friday, Jim Berson, the acting Executive Director, sent partial responses to more than two dozen questions that had been asked of Spies over the past two weeks. Berson was only tapped two weeks ago and has no first-hand knowledge of any of the facts relating to the questions submitted to ProvPlan.

The organization, which has received an estimated $32 plus million in the past four years in federal, state and nonprofit funding, continues to refuse to answer how much was allegedly embezzled, when the embezzlement took place, or which funding dollars were impacted.

“We retained a law firm to investigate and gave them complete access to staff and documents.  That firm also retained professional forensic accountants to review the financial records. Based on those reviews, we determined that only one person was involved. We shared this information with stakeholders, the public and the media beginning July 28,” said Berson in an email to GoLocalProv.

No statements were made on ProvPlan's website or social media accounts at the time. 

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Financial Oversight

While the top two executives of the organization are out, ProvPlan refuses to provide Spies to answer questions about the organization’s financial oversight -- and specifically, the fiduciary responsibility and competency of the board. 

ProvPlan reports that McGuigan’s departure was not tied to any financial misappropriation by him. "The executive director’s departure was a mutual decision based on mutual agreement between him and the board that new leadership was necessary.  There was no severance paid,” said Berson.

Berson defended the organization's financial oversights, “There were standard financial policies in place, including division of responsibility, and the organization conducted an annual year-end audit by an independent firm.  Of course there were safeguards in place, but regrettably the CFO implemented a very sophisticated scheme and was able to commit the crime nonetheless.”

But, questions remain. ProvPlan’s Berson tells GoLocal that the organization’s law firm was able to detect the crime quickly, “The Brown Rudnick attorneys outlined the scheme in a matter of days, if not hours.”

If the theft was able to be detected quickly, why did not ProvPlan’s auditing firm, executive director or board not detect hundred of thousands of missing funds? ProvPlan again refused requests by GoLocal to review Board minutes over the past four years.

How Much Public and Charitable Dollars Were Taken?

While ProvPlan has refused to provide much in detail, Berson told GoLocal, “Our current information is that the embezzlement occurred over approximately four years, in increasing amounts year-over-year.  Over half of the money was taken in the last fiscal year (which ended in June).  We’ve shared these details with law enforcement, and are sharing them with you now.”

“We are exploring all of our options to recover the funds that were stolen from the organization and will pursue every reasonable option that is likely to succeed.  It would not be helpful in achieving those ends, however, for ProvPlan to discuss legal strategies in public at this point.”

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Lack of Transparency

ProvPlan refuses to identify which funders have been impacted and what the total cost of the investigation, accounting costs, legal and public relations fees total. “The board has hired vendors to provide all three services.  Brown Rudnick’s services are pro bono; the other vendors are being paid by the Providence Plan.  Their agreements are private documents,” said Berson.

Again, Spies has refused to answer any questions regarding the Board’s oversight and fiduciary responsibility.

 
 

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