County Cancels Project JOVE Contract

San Diego County supervisors voted unanimously Tuesday to terminate a contract with Project JOVE after a county audit of the social service agency’s financial records disclosed that project managers could not account for $47,559 of county funds.

The supervisors’ decision could mean the end of Project JOVE, directors of the agency said.

County auditors said the agency, which provides counseling to ex-offenders, veterans and the unemployed, maintained multiple bank accounts for different funding sources and projects, but then moved the funds from account to account in what one county official described as “robbing Peter to pay Paul.”

Thomas Wornham, JOVE’s executive director, contended the agency has provided services for all of the money the county has dispersed, noting that the auditors’ report says the county still owes the agency $18,057 for services rendered.

“For the last 14 years we have provided services, and at times we were rated the top ex-offender program in the nation. We have had eight prior audits, and always have come out with the approval of the county and more contracts from the county,” Alex Landon, chairman of the JOVE board, told supervisors before the vote.

“If the county follows through with this action, we will not have the money to provide services under Chapter 11 (of the federal bankruptcy code) . . . and will have no other choice but to shift to Chapter 7. At that point JOVE will no longer exist,” Landon said.

The agency’s problems surfaced in April following a government investigation that revealed the falsification of records on a contract JOVE had with the state’s Employment Training Panel. The state suspended some of JOVE’s funding, and last month the agency filed for protection under Chapter 11 of the U.S. Bankruptcy Code, which allowed it to continue doing business, shielded from creditors, under control of the bankruptcy court.

Under Chapter 7 of the bankruptcy code, the agency would liquidate its assets and cease doing business. Richard Peterson, the agency’s bankruptcy attorney, said the project “couldn’t propose a realistic” plan to continue without the county funding.” He said if the agency filed for bankruptcy, it probably would be done today.

Wornham has blamed the falsification of state records on two former employees. Those employees, identified as George Thoroman and Jose Ramirez, allegedly falsified as many as half of the placement papers of trainees in the state program in order to establish a track record so they could go into the job training business for themselves. It is believed that Thoroman and Ramirez have left the country.

Wornham called the cutoff of state funds an “overreaction” that set off the rest of the agency’s troubles. He and Landon left the board room before the supervisors voted, and could not be reached for further comment.

Randall C. Bacon, director of the Department of Social Services, told the board he does not question the quality of services JOVE has provided in the past.

“The issue is finances and whether county funds are being spent on county programs, and whether they are being safeguarded by JOVE,” Randall said. “There are ($47,559) they couldn’t account for. There is clear evidence money was shifted through several accounts in an effort to rob Peter to pay Paul. Certainly that is in violation of our contract.”

In their report, the county auditors said the agency had $904 worth of invalid claims, $15,553 of payroll taxes claimed but never paid, $9,736 of fringe benefits claimed but not paid and $2,238 of other unaccounted for items.

They said the agency’s account for county funds had only $81.74 in it on April 30 and was closed on May 13.

“The $47,559 should have been there or, if not, they should have been able to substantiate where it went,” said Bill Kelly, assistant auditor and controller.

The county contract with JOVE for $425,000 would have expired Dec. 31. The county already had paid JOVE $214,785 of those funds.

The board voted 4 to 0 to terminate the contract “for alleged fiscal improprieties and failure to perform activities specified in the contract.” Supervisor Brian Bilbray was absent.

County officials said they would search for another organization to provide the counseling services.