L.A. County Orders Head Start Agency to Repay Misused Funds

The largest Head Start provider in Los Angeles County has been ordered to repay about $104,700 for violating federal regulations by engaging in nepotism, overpaying staff members and renting office space and vans from its employees.

The order by the county Office of Education to return the government funds follows an eight-month investigation of the Latin American Civic Assn., the sole provider of Head Start services in the San Fernando and Santa Clarita valleys and the biggest of the county’s 27 providers. Head Start is a program for low-income preschoolers.

Prompted by complaints by parents and employees, the county re-examined financial records of the San Fernando-based agency, which provides meals, medical services and instruction to 1,800 poor children at more than two dozen centers from North Hollywood to Newhall.

A Nov. 20 report concluded that in the last three fiscal years the agency:

* Leased vans and administrative offices from San Fernando Leasing and Rental Inc., a private company controlled by the agency’s executive director, Ralph Arriola, in violation of federal conflict-of-interest regulations. The agency must repay rental payments of $44,866 for the offices and $20,132 for the vans.

* Hired Arriola’s wife, Helen, as a consultant in violation of regulations against nepotism. The agency must repay $16,264 that it paid her.

* Overpaid three unidentified employees, including two nurses, for working a 40-hour week when they worked fewer hours. The overpayment that must be repaid is $22,853.

* Spent about $583 for interest payments on the vans in violation of federal regulations.

The county, which administers the program for the federal Department of Health and Human Services, also classified the Latin American Civic Assn. as a high-risk agency and will continue to scrutinize it for an undetermined period of time, said Steve Horowitz, spokesman for the Office of Education.

An agency spokesman said it plans to appeal the ruling by the end of the month.

Horowitz said the county will then review the case and decide on a final repayment amount, which the agency must submit by the beginning of March.

The agency’s board of directors could be held personally liable for the funds, an official said.

Board members could not be reached for comment.

Arriola, who has headed the agency for 15 years, admitted in a Sept. 25 interview with The Times many of the allegations contained in a county report and an audit dated Aug. 25.

Arriola admitted hiring his wife and controlling San Fernando Leasing. But Arriola denied that he profited from the violations.