A domestic violence and sexual assault agency serving victims of abuse in Jackson County abruptly shut its doors last week after more than three decades in operation.
REACH of Jackson County has been plagued for two years by an on-going funding crisis, but the sudden closure came amid questions about internal accounting irregularities.
The director and finance director were fired and seven other employees put on furlough.
This leaves victims of domestic violence and sexual assault in Jackson County without a local agency to turn to. They now must rely on help from neighboring counties. 911 calls from victims are being rerouted to Macon County.
“No client will go unserved — none,” said Ann VanHarlingen, executive director of REACH of Macon County. “We are providing room in the shelter, court advocacy, whatever an individual or family from Jackson County needs, we will provide.”
The domestic violence agencies from neighboring Swain and Haywood counties have pledged help as well, including Swain/Qualla SAFE and REACH of Haywood County.
Lisa Barker, the director of SAFE in Swain County, cautioned, however, that Jackson County’s leaders must figure out some other means, long-term, of helping victims living in the community — these small nonprofits all have limited resources and shallow purses, the very crux of the problem that ultimately destroyed REACH of Jackson County.
“It is very important that each county have the services available in that county,” Barker said. She noted that it places additional hardships on victims, who are already in crisis, if they are forced to seek assistance instead of finding help readily available within their home communities.
Children are often caught in the middle of domestic violence. Four-dozen children were among those housed in 2010 in the domestic violence shelter run by REACH of Jackson County.
Shutdown came rapidly
Board members of REACH of Jackson County aren’t saying much. In fact, all they’ll say about the matter is contained in a written statement released early Monday by board Treasurer Tommy Dennison.
“Due to uncertainty regarding our financial issues, REACH of Jackson County had to close on Feb. 9,” it stated in part. “We are very saddened that this has occurred but it was the only way we could fully understand the situation. This was a very difficult decision for the board to make.”
The budget for REACH this fiscal year was approximately $400,000, down from $1 million just two years ago. Grants made up most of the budget, but the agency had other sources of revenue, too. Jackson County has been giving REACH $35,000 for operational expenses on an annual basis since 2007.
County Manager Chuck Wooten said he was informed that an auditor is reviewing REACH’s accounting records, and that board members had expressed confusion over the true situation of the agency’s finances.
Here’s what happened: On the morning of Thursday, Feb. 9, there was a REACH board meeting. Later, REACH Board President Rich Peoples came to the agency’s offices just off N.C. 107 and fired REACH Executive Director Kim Roberts-Fer and Finance Director Janice Mason. He furloughed the other employees.
In an extensive interview just after she was fired, Roberts-Fer detailed the events leading up to the terminations. While the agency has been through financial struggles, she said there were adequate funds to keep it running. At the time of the interview, it was not yet clear that the REACH board would totally shutdown the agency.
“I don’t see why, after all we have done, that they would give up now,” Roberts-Fer said. “With or without me, that’s not the point — there are too many women depending on them.”
Payroll tax problems
REACH eked out a day-to-day existence. The agency had no piggy bank, and no real bank that was willing to extend credit — REACH was turned down twice when it sought loans. The agency missed payroll at least twice and had its water cut off once for nonpayment of bills.
The financial straw breaking the camel’s back, however, seems to have come when board members learned that REACH owed $47,000 to the Internal Revenue Service. REACH had failed to pay three quarters worth of payroll taxes last year. The amount owed included fines and penalties as well.
Roberts-Fer said there was nothing sinister involved. Partly, the finance director, Janice Mason, didn’t realize she was supposed to remit payroll taxes regularly, according to Roberts-Fer. But, cash flow problems clearly played a major role.
“Her only goal was to keep the agency going. What she was doing was paying when she got the money. But, it kept getting further and further behind, and basically, she didn’t have the money,” Roberts-Fer said.
The IRS showed up. A deal was worked out. REACH would pay $700 to $1,000 a month, Roberts-Fer said, with the expectation that the fines and penalties probably would be waived once the taxes were paid.
“Once I got the information, I shared … with the board and let them know we were in contact with the IRS,” Roberts-Fer said, adding that she went without her own paychecks in November and December to try and help the agency recover financially.
This wasn’t the first accounting issue at REACH.
Mason also failed to properly deposit retirement plan contributions into two employees’ accounts on several occasions, Roberts-Fer said. When employees elect to have part of their take-home pay withheld and put into a retirement plan, the money is supposed to be deposited regularly.
That money was paid back, but the amount of interest involved remain points of contention with the employee and former employee involved, she said.
The motivation again seemed to be plugging cash-flow shortfalls to keep the agency going.
“(The finance director) had been for years charged with paying the bills with no money. She inherited a system; she worked within it,” Roberts-Fer said.
New guidelines were put in place to standardize and regularize the agency’s methods of doing business, she said.
“Everybody makes mistakes. For an organization, the question is, do you respond to the problem? We did,” Roberts-Fer said.
REACH’s financial problems longstanding
The financial woes of REACH of Jackson County weren’t a mystery. Exactly one year ago this week, Roberts-Fer warned that the financial situation was so bleak the nonprofit faced the possibility of shutting down.
Before Roberts-Fer took over three years ago, REACH had opened a $1.1-million transitional-housing complex for victims trying to escape abuse back in 2001. It was a questionable financial venture from the get-go: The nine-apartment village, no matter how skillfully operated and managed, would never actually generate the funds to pay the loans, much less keep pace with general repairs and upkeep. The only income to offset the expenses was rent from the tenants, and even if fully rented, it would not pay the mortgages and expenses. The loan amount owed was $840,074.
The REACH village went into foreclosure, and associated costs bled dollars from the agency. Recently control of that housing complex shifted to Mountain Projects, a nonprofit that administers programs to benefit the needy and elderly in Haywood and Jackson counties.
Roberts-Fer said REACH of Jackson County also had been overspending during those years, including dipping into, and ultimately depleting, emergency financial reserves.
Even the agency’s thrift shop had been barely breaking even.
Adding to the difficulties were sky-high insurance payments on the agency’s emergency shelter after Bonnie Woodring, who was seeking protection from an abusive husband, was gunned down by John Raymond “Woody” Woodring in September 2006. He shot her inside the shelter after muscling his way in. Woodring later killed himself.
Additional security measures at the shelter were added in the wake of the shooting, another expense for REACH.
But perhaps most critically, at least when it came to the agency’s financial wellbeing, grants and other funding streams REACH relied upon have virtually dried up. Macon County’s VanHarlingen said her agency also has faced increasing financial constraints because of the overall economic climate.
“It is difficult for everybody,” she said.
In response to the financial crisis, Roberts-Fer had cut the number of employees at the agency and streamlined programs to barebones levels: operating an emergency shelter, offering legal advocacy and maintaining a hotline.
Jackson County Manager Chuck Wooten raised the possibility of combining some elements of the individual agencies in the region to offset costs. But, VanHarlingen cautioned that immediate shelter and help needed to be available in individual communities. At one time REACH of Macon County was an extension of the Jackson County agency.
“When we were the Macon outreach for Jackson County, that meant sometimes transporting a client over Cowee on a snowy night,” she said.
The need for help in Jackson County, REACH or no REACH, isn’t likely to disappear.
During fiscal year 2009-10, REACH of Jackson County received more than 400 crisis-line calls, provided emergency shelter for 37 women and 48 children, and was involved in 269 counseling sessions.
Wooten described the need as critical and said he expects REACH’s demise to be a topic of discussion at the Feb. 20 Jackson County Board of Commissioners meeting.