Justice Department freezes funds to Big Brothers Big Sisters following audit

President Obama shakes 2009 little brother Anthony Saldan’s hand in July 2010 as Big Sister of the Year Debbie Groulik, of Fort Wayne, Ind., and her little sister, 19-year-old Jocelyn, look on. (WhiteHouse.gov)

Big Brothers Big Sisters of America, the national charity that has been championed by President Obama for its work with at-risk kids, overpaid consultants, failed to track taxpayer funds it passed on to affiliates and kept such sloppy financial records that the Department of Justice has cut off millions of dollars in federal grants, officials said.

Although an Inspector General's report on the Philadelphia-based youth mentoring organization found no criminal wrongdoing and did not identify specific waste on a large scale, it determined the charity's books were such a mess that it was impossible to tell how nearly $20 million earmarked for helping tribal, military and other at-risk adolescents was spent. The report did find that one unidentified information management consultant was hired outside the competitive bidding process and paid $100 an hour, nearly double the allowable rate. But most of the problems were systemic accounting issues, such as commingling grant funds intended for specific projects with general funds and not monitoring how affiliates handled taxpayer money passed down to them.

"We determined that all BBBSA expenditures were unsupported due to commingling funds and that BBBSA was in material non-compliance with the essential grant requirements in the areas we tested," the report stated.

"As a result of these weaknesses," the federal auditors said they could not tell how some $19.5 million federal grants awarded between 2009 and 2011 was spent, and they recommended freezing some $3.7 million that has not yet been paid out. The agency followed through on the recommendation by freezing the funds.

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Officials for the charity were quick to point out that the audit did not find any instances of “intentional misuse or misdirection” of federal funds.

“In accordance with our own internal processes, Big Brothers Big Sisters retains highly qualified independent firms to audit all of our grant administration and financial management systems,” the nonprofit said in a statement. “No material concerns were identified by either the independent auditors or DOJ’s own program office desk reviews. Furthermore, the DOJ audit did not identify any findings of intentional misuse or misdirection of federal funds.”

The Department of Justice has awarded Big Brothers Big Sisters some $480 million in grants since 1994, through its Office of Juvenile Justice and Delinquency Prevention. The nonprofit organization has received a total of $68.4 million in Justice Department grants since 2004, primarily for two major programs: the Tribal Youth National Mentoring program and the National Mentoring program.

The charity, which helps provide mentors for some 200,000 kids, has undergone a shakeup in the last year, with a quarter of its staffed trimmed and a new CEO and director of finance hired.

“While our work in serving at-risk children was never compromised, we are disappointed that we fell short in meeting the procedural guidelines set by DOJ,” charity officials said. “The success of the programs in no way absolves us of our own responsibility to be fully compliant. To that end, new financial personnel are in place, grant management systems and internal controls are being enhanced, and network-wide training is under way.”

In 2010, during a National Mentoring Month event in January, President Obama met with the organization’s 2009 and 2010 Big Brothers and Big Sisters of the Year, as well as the youngsters they mentored.

"… As the folks up here on stage will tell you, the mentor usually gets as much or more out of it than the mentee,” Obama said. “So I'm pleased that non-profit organizations like Big Brothers Big Sisters are stepping up -- expanding their efforts to connect children of deployed service members to mentors who are often veterans themselves.”