Pomona Youth Agency Ordered to Repay State Grant

State officials, citing an audit that alleges ineffective programs, mismanagement and poor record-keeping, have ordered the Pomona Valley Youth Services Project to pay back $77,713 in grant funds.

In the wake of the state’s action, the City of Pomona has withdrawn from the 11-year-old youth diversion project and county officials are searching for a new agency to administer a major summer jobs program. A second county youth program administered by the project also may be in jeopardy.

Pomona’s withdrawal leaves three other cities and two school districts still members of the joint-powers authority responsible for the project, which for the last two years has been mired in controversy and in-fighting over its leadership and programs. And at least one of the remaining agencies is expected to consider withdrawal.

Project director John Owsley said the state demand for repayment and the withdrawal of the city of Pomona may signal a slow death for the program, which is based here and provides training and jobs for teen-agers in a four-city area. The agency’s total budget for last year was $688,000, most of it from state and federal grants, Owsley said.

“The bottom line is, we ain’t got the $77,000 to pay back,” Owsley said. The agency, he said, has about $15,000 to $16,000 in assets.

Project attorney Richard Diaz has asked the state Office of Criminal Justice Planning, which administered the grant funds and issued the repayment directive last month, for one last review of information which Owsley said has not been considered by auditors.

A spokesman for the state said late last week that his office had received a letter from the Pomona agency’s attorneys but had not yet formulated a response.

Owsley said that if such a review is not granted, he will appeal to the state Council on Criminal Justice, an umbrella agency that administers federal anti-delinquency funds.

Ralph Rowe, who heads the audit resolution team for the Office of Criminal Justice Planning, said auditors examined all pertinent information presented to them by the agency staff. He said the youth services project has exhausted all avenues of appeal and will face civil action by the attorney general if it does not repay the money.

At issue are federal grant funds spent by the youth services program between February, 1983, and June, 1984. The grant funds were designed to reduce juvenile delinquency by providing counseling and job placement services to disadvantaged youths and by training project interns to do counseling work and assist in job placements, state officials said. The repayment demand is for all the funds paid to the agency for running the state project.

The state audit alleges that the agency mingled program accounts and kept client files in such disarray that it is virtually impossible to separate one program from another. The audit also said that only nine juveniles received “minimal” service from the grant, far below the 207 required by the state or the 400 that Owsley says were served.

State auditors said they had been able to find only 65 client files, many of which were incomplete. Owsley acknowledged that “our records should have been better.”

“We ran a program,” Owsley said. “But the program we ran was different from what the state had in mind.”

“But we feel the state is taking a really hard, unbending position,” he said. “We weren’t perfect, but we weren’t in any serious trouble.”

Owsley said that because his staff had been decimated in recent years by cuts in other grant programs, he used the criminal justice planning funds to pay interns for counseling and job placement work with clients. He said he thought the operation was a legitimate use of the money.

Besides Owsley, the project has four full-time and three part-time employees. And of the approximately $688,000 operating budget last year, about $150,000 was spent on administration and employee salaries. Total payroll was about $100,000, Owsley said. He said his own salary is $29,000 a year.

The agency’s troubles began in 1983, when a private accounting firm it hired for an internal audit found a lack of accurate recording of expenses.

When Pomona City Councilman Mark Nymeyer became the city’s representative on the agency’s board in late 1983, he recommended that the agency improve its accounting procedures. Failing that, he said, he would recommend that the city withdraw from the project. He also made repeated public calls for Owsley’s removal.

The 42-year-old Owsley, a 1973 behavioral science graduate of Cal Poly Pomona, became director of the agency in 1979. The project governing board has the power to fire him and appoint a successor. Its members are appointed by the city councils and school boards and includes some elected officials and some private citizens.

The state audit was begun in April, 1984. Preliminary findings released later showed a number of discrepancies in the agency’s records. Nymeyer again recommended that Pomona withdraw from the agency and that Owsley be fired.

Nymeyer finally persuaded his City Council colleagues last month to withdraw from the project after the state issued its demand for repayment. The remaining participants include the cities of San Dimas, Claremont and La Verne and the Claremont and Pomona unified school districts. Nancy McCracken, the joint authority’s representative for Pomona Unified School District, said she favors pulling out of the agency, but the school board has not yet voted on the matter.

Nymeyer said he pushed for the City of Pomona’s withdrawal because he feared the city would be liable for repayment of the funds sought by the state.

“We don’t want any more liability in the future,” Nymeyer said.

Pomona City Atty. Patrick Sampson said the joint-powers agreement specifies that member cities are not liable, but Nymeyer said the question would be open to court interpretation if it reached that stage.

Pomona’s action also means a $350,000 to $400,000 summer youth employment grant from the county will be partially or completely diverted to another agency for the first time since regional project was established in 1974, according to county officials. Owsley said the summer grant and a separate job training grant, both administered by the county, represent most of the project’s operating capital and are basic to the youth agency’s survival. The job training grant, which runs out June 30, is $215,735. Owsley said no one has yet threatened to take away those funds, but negotiations are in progress for renewal of the grant in fiscal 1985-86.

Larry Johnson, assistant director of the county’s Office of Community and Senior Citizens Services, said the county also hired an independent firm to audit the agency last year and uncovered management deficiencies similar to those found by the state, but nothing was regarded as serious enough to jeopardize the job training program this year.

Johnson said that he and Pomona city officials are negotiating with the Pomona Unified School District to funnel the larger summer employment grant through a school program, a common practice in other cities.

“There will be a summer youth program in Pomona this year,” Johnson said. “The only question is which agency will be administering it.”

Because most of the youths who will be participating in the program live in Pomona, Johnson said, the county will attempt to pacify city officials who are dissatisfied with the youth agency by finding a new conduit for the grant.

While acknowledging that it is probably too late to save this year’s summer youth grant for his agency, Owsley said he is confident that the information the state has been asked to review will vindicate him and his agency.

CHRONOLOGY OF EVENTS April 1984: State audit of Pomona Valley Youth Services begins. August 1984: Final audit alleging poor record keeping and mismanagement is published. March 13,1985: State orders agency to repay $77,713 in grant funds. March 25,1985: City of Pomona withdraws from youth services contract; city and county begin negotiations with Pomona Unifid School District to create a new youth agency. April 10,1985: Attorneys for Pomona Valley Youth Services request appeal before the California Council on Criminal Justice.