Last week the Shenandoah Area Agency on Aging (SAAA) released information related to a review of its operations following a possible fraud scheme by one or more former employees in 2011 that cost the organization over $12K in lost cash with additional Internal Revenue Service penalties due to the late payment on federal and state payroll taxes.
“At the request of the Shenandoah Area Agency on Aging, the Virginia Department for the Aging (VDA) conducted a high-level review last summer of SAAA” said SAAA chairman John Hudson last week. “ The report’s major findings include a cash flow concern with previous unpaid bills and lax internal controls. Following the state review, the SAAA Board of Directors took immediate action to have a detailed forensic audit performed by Yount Hyde & Barbour and reduce expenses. The SAAA Board remains committed to be prudent stewards of the agency’s resources to ensure it can continue to serve the older citizens of the Shenandoah Valley by continuing its work with the auditor to improve internal controls and working closely with the County and City governments and local agencies.”
The Shenandoah Area Agency on Aging is a non-profit organization that provides services and opportunities intended to enhance the dignity and independence of seniors and promote their contributions to the community. SAAA services are designed to assist older persons who wish to stay in their own homes, to provide information for seniors and their families, to protect individuals living in long term care residences, and to facilitate staying active and provide community service.
While the SAAA plays a daily role in providing community support to Clarke County senior citizens – as well as delivering “Meals on Wheels” to 30 local homebound seniors every day – Clarke County taxpayers have an even broader relationship with the organization.
In December, the Clarke County Board of Supervisors awarded a construction contract worth nearly $1.5M to Minghini’s General Contractors of Martinsburg, West Virginia to build the new Active Living Center in Berryville. The project is being funded in partnership with the Shenandoah Area Agency on Aging which will cover approximately $500K of the cost while Clarke County taxpayers pitch in the remaining $1M.
But despite the SAAA’s challenges in responding to the financial and personal losses – the organization’s executive director has been implemented by SAAA in a recent fiscal audit (see report below) , Clarke County Supervisors chairman Michael Hobert (Berryville) says that he is optimistic that the organization is taking the right steps to solve its financial problems and doesn’t have current concerns about the agency’s ability to hold up its end of its agreement with the County.
“The report dates back to late summer and, based upon Mr. Hudson’s statements to me, there have been significant improvements in the Agency’s financial position” Hobert said. “He has advised me that he does not believe that the Agency is in the serious financial trouble suggested by the preliminary review. Steps have been taken by the SAAA Board, following the professional advice received, to address their financial problems and it is confident the organization is taking the necessary steps to put it back on sound footing. The fundraising that has occurred since that time has been successful and demonstrated strong support for the SAAA.”
Hobert said that the County’s agreement with SAAA calls for the payment of $500 per month for the first five years for the specified terms of usage for the Active Living Center and that it is not anticipated that SAAA will cease operations. Consequently, Hobert said, the County has not considered the possibility that SAAA would default on the payments or that the County would somehow assume programming responsibilities.
“As for the funds raised by SAAA for the Active Living Center, I understand that all of these funds and assets donated have been transferred to the County” Hobert added.”Mr. Hudson tells me the SAAA will have a balanced budget for the year. While debt will still continue, regular principal and interest will be made to ensure its systematic reduction. Though this is has been a challenging and serious matter for the SAAA, I am optimistic the organization and its supporters will weather the storm”
Hobert said that he remains concerned about the impact of potentially reduced federal and state support for senior citizens but believes that there is strong support for the elderly and these programs in the Clarke County community.
“I am confident Mr. Hudson and his colleagues will continue working on behalf of seniors and those citizens who are most vulnerable to the loss of nutritious meals, in-home assistance, transportation, and assistance with understanding and receiving the benefits to which they are entitled.
View the SAAA’s internal investigation report here: SAAA Internal Investigation Findings