Employees of an embattled South Norwalk anti-poverty agency lined up Tuesday afternoon to get their paychecks four days late after the agency came up short of cash and failed to meet last week's payroll.
Norwalk Economic Opportunity Now has been struggling ever since a 2012 federal audit showed $400,000 in misspent Head Start funds, forcing the resignation of its president and CEO, Joe Mann. But the heat ratcheted up last week even before the paycheck problem, when six members of the new 20-member board of directors resigned in an 11-day period, joining three others who had already left.
Board Chairman William Westcott resigned Sept. 23, citing a lack of financial reporting from NEON management. Board member Michael Berkhoff, owner of the national chain BevMax, was elected chairman Oct. 1, but on Oct. 2 board members Susan Weinberger, Christopher Ruzzi, TaShun Bowden-Lewis and state Rep Jonathan Steinberg, D-Westport, resigned. Board member Alan Rossie followed suit Oct. 3.
Westcott, Weinberger, Rossi and Steinberg all said they were unable to fulfill their fiduciary responsibilities because of what they said was poor financial record keeping. All three expressed frustration and their doubts that things would improve.
All of the resigned board members had opposed the appointment of then-Chief Operating Officer Chiquita Stephenson to replace Pat Wilson Pheanious as interim CEO and president. Pheanious had recommended Stephenson for an 18-month term, but Department of Social Services Commissioner Roderick Bremby pressed the agency to conduct a nationwide search for a new director, offering financial and technical assistance.
The board voted Aug. 6 to give Stephenson a six-month term beginning Sept. 7.
Stephenson said the departing board members were "lying" about the financial reporting.
"My role at NEON prior to my current position was development and public relations," she said. "My current role gives me the ability to utilize my skills to move the agency forward. That is why you now have an organization budget, program budgets and cash flows. This information was given to all board members and is continued to be given to board members. Only they can explain why they are lying about being in receipt of financial information. ... It is available. It is not pretty, but it is reality and now we are focused on moving forward."
Weinberger pushed back.
"Since my tenure began as a member of the Board of Directors of NEON, the term `liar' has been used repeatedly by management to place blame on others for the agency's problems," she said. "Most recently, it was used to respond to the Head Start report stating major program deficiencies. I suggest that management should eliminate that negative and accusatory term from their vocabulary and, instead, concentrate on honesty and transparency."
Last Friday, NEON obtained emergency funding from the state to meet its payroll. The money would come in Tuesday, employees were told. All 250 NEON employees were affected, Stephenson said.
Stephenson also warned employees Friday night that layoffs and furloughs were coming. Late Sunday night, many of the employees received an email telling them to stay home Monday and Tuesday, as many programs would not be open. That included Head Start.
On Tuesday afternoon, employees visited the agency's 98 South Main St. offices to get their pay, most of them refusing to comment.
"The Head Start teachers will be there tomorrow morning," said one, refusing to give her name. Stephenson later confirmed that Head Start would reopen Wednesday morning.
Part of NEON's financial problems stem from its merger with Stamford's CTE, a move that Mann arranged, Stephenson said. The merger cost $466,000 more than DSS had provided in funding, she said at a recent board meeting.
But Stephenson lays the financial travails at the feet of Norwalk Mayor Richard Moccia.
The city of Norwalk has refused NEON $2.6 million in funding over the past two years, a deficit that Pheanious referred to as "a broken promise," as grants from the city were a normal part of NEON's funding for more than 30 years.
Pheanious and Stephenson have said that the agency provided Moccia and other city officials with better financial accounting than it has ever had.
"The facts are there," Stephenson said Friday. "NEON never had a budget before, we now have a budget. NEON never had a cash flow before, we now have a cash flow. The city of Norwalk received more financial information than they have ever received, from a financial perspective, of NEON in operation."
Moccia stood firm.
"Board members have resigned en masse," the mayor said last Friday in an email. "There still appears to be problems with the moneys being misspent. There are ongoing state audits in progress. The fault is not with the city."
The audits are being done to help NEON streamline its operations, Stephenson said Tuesday.
The agency cut $683,000 from its budget between May and Sept. 11, Stephenson said. A proposed $2.5 million in cuts were expected to be presented to board members Wednesday evening, she said.
"We are not by any means taking our financial situation and sitting on it," she said. "We're taking our financial situation and we're saying to the communities that we serve that we have to restructure, and we have to restructure in order to save, rebuild and revitalize the significant programs being offered by NEON."
NEON has laid off or furloughed employees in its Information Technology Department, client family services and reception, she said.
Part of the problem that was NEON, under Pheanious, continued programs it no longer had funding for, she said.
The agency is looking for funding from other communities where it provides services, she said. But she continued to blame Moccia.
"Our early childhood provides childcare for Norwalk residents," she said. "That assistance and help is something that we needed from Norwalk. We went (to the city) on several occasions and we did not get that assistance."
NEON's Head Start contract has been extended until Dec. 31. The Norwalk Housing Authority and NEON have both applied for a $1.4 million federal grant to run the program.