MADISON, WI (WTAQ-WLUK) — The Wisconsin Legislature’s Joint Audit Committee on Tuesday approved an audit of how Newcap and other community action agencies have been spending government money and how the state has been overseeing that.
Three state department heads and a former Newcap executive testified at the hearing.
Earlier this year, that executive put a light on Newcap issues after she says state officials failed to act on her warnings about the nonprofit.
Newcap received almost $100 million in taxpayer money over the most recent five-year period for which there are audits.
Carrie Hill worked at Newcap for about a year and a half, overseeing government grant work. She told the committee she quit after seeing the way Newcap was being managed and realizing it had no money.
Hill provided examples, including former CEO Cheryl Detrick forming an LLC called Newcap Builds.
Detrick has previously said Newcap Builds was supposed to create revenue for Newcap. However, Hill says taxpayer money paid Newcap Builds employees and the materials that were used. She says Detrick used Newcap Builds to renovate her personal home, something Detrick has previously admitted to.
“Every dollar that is misused or improperly managed is a dollar that cannot be used to help a family, provide critical services, strengthen a community and fulfill the mission for which those funds were awarded,” Hill said.
The secretaries for the state’s departments of Administration, Health Services, and Children and Families also testified. They defended the mechanisms in place to catch problems with entities that receive taxpayer money. They provided three examples, including Newcap, where they say red flags were raised and proper resolutions were reached.
However, the committee’s chair, State Sen. Eric Wimberger, R-Gillett, challenged whether current practices are doing enough.
“Is it fair to say your processes and procedures don’t catch any fraud as it’s happening or there is no method to ensure that fraud doesn’t happen, all you can do is mop it up afterwards?” he asked.
“I’ll say, yes, it is a challenge to understand the totality of a going concern and that is really the job of the board, right?” said Kathy Blumenfeld, secretary of the Department of Administration. “The board is looking at the total governance of the entire operation.”
Newcap’s board of directors has previously said Detrick, the former CEO, withheld information and didn’t present financial concerns with the urgency needed.
Detrick has said strict government rules for grants were followed.
