The Volunteers of America scandal is a serious matter of concern for many people. While the local chapters have their own board of directors and operate independently, the national organization has the power to step in under exceptional circumstances. However, the recent controversies surrounding the organization have made it difficult for local groups to continue their work. In fact, San Diego County has recently decided to terminate their local chapter.
The audits of the Volunteers of America Southwest organization revealed a series of suspicious expenditures. They were traced back to two sisters-in-law of the organization’s chief financial officer, Nagham Hakeem. Both women had worked at the organization for years. When they brought their findings to the organization’s chief executive, Gerald McFadden, they were met with resistance. They eventually left the organization.
Volunteers of America Southwest is a large national nonprofit that receives millions of dollars from government funding. Its services include mental health treatment, housing for homeless people, and job-training services for veterans. However, county officials are demanding $6.5 million from the nonprofit because of mismanagement and fraud. The nonprofit has admitted some double-billing to county auditors, but the extent of its alleged mismanagement may be far greater.
The Volunteers of America Southwest was found to have violated several contracts and charged goods and services well above market rates. The former CFO, who was also a volunteer, hid the unauthorized spending by funneling public funds to his sister-in-laws’ companies. However, two whistleblowers had reported the scandal to the organization’s CEO. The two individuals, who had twenty-five years of experience with nonprofit organizations, were fired.
San Diego county auditors have found financial irregularities in the Volunteers of America Southwest charity’s accounts. They were also concerned about apparent conflicts of interest. Now, they are demanding that the charity repay $6.5 million in county funds. The audit findings are expected to be reported to the county board of trustees in October.
The scandal started when a former director of behavioral health at Volunteers of America Southwest filed a lawsuit alleging that grant funds were not properly allocated. He also claimed that staff members paid by one agency were used for projects that were meant to serve another agency. In addition, he noted that the nonprofit often triple-billed other agencies for the use of its National City rehabilitation beds. He also said he had raised his concerns with two separate managers, but Hakeem told him not to worry.
The nonprofit’s chief financial officer, Nagham Hakeem, was hired by the organization in March 2018. Hakeem, Harrell’s sister-in-law, worked in the finance department and eventually became the chief executive officer of Volunteers of America Southwest. In addition to the hiring of Hakeem, the nonprofit also hired Harrell’s sister-in-law Manar Hirmiz to work in the finance department. Hakeem reassigned some of Harrell’s duties to Hirmiz and Banar Askar.
Conflicts of interest
A lawsuit filed by the former director of behavioral health at Volunteers of America Southwest in San Diego, California, alleges that grant funds were misused and that staff members paid by one organization were used for projects serving another. He also claimed that the nonprofit triple-billed agencies for beds at its Renaissance Treatment Center in National City. He also said that he tried to voice his concerns to two different managers, but was told that his findings were “not important.”
When a staff member or volunteer has a financial interest, it is a conflict of interest. This interest could be seen as influencing the performance of their public duties. However, there are differences between an apparent conflict of interest and an actual one. In addition to financial interests, a person’s personal gain or favored status with a group might be enough to trigger a conflict of interest.
The investigation found that the board member of Volunteers of America Southwest, Philip Curtis, also owns a pharmacy and does business with the nonprofit. The nonprofit’s national office told Voice of San Diego that they would review their practices, but Curtis did not respond to our request for comment.
San Diego County’s decision to cancel local chapter
The decision to cancel the San Diego County Volunteers of America chapter has been controversial since it came to light in January. The group has a national reputation and was founded by the son of the founders of the Salvation Army. It helps the poor and vulnerable through housing, food, education, literacy programs, and addiction treatment. The group also offers assistance to veterans.
Until recently, Volunteers of America Southwest was a major social-services organization in San Diego. But a report by Voice of San Diego reporter Will Huntsberry exposed its scandalous history. The organization had been accused of fraud and double-billing. Because of this, the San Diego County government cut off its funding.
During an audit, San Diego County officials found that the organization had inappropriately spent money on sister-in-law companies. The organization spent more than $1 million on these companies without proper documentation. The San Diego County government demanded the refund of $6.5 million from the Volunteers of America Southwest. Because of the scandal, the local Volunteers of America chapter no longer receives funding from the county.