Agency Head Spent U.S. Funds on Personal Items, Audit Finds : Inquiry: El Monte-based job training group may have misspent more than $127,000, report says. Purchases included a racetrack cash advance, toys and eyeglasses.

The head of an El Monte-based job training agency used federal funds to pay for a trip to Las Vegas, buy new eyeglasses, get a cash advance at the Santa Anita racetrack and make toy purchases, according to a report released Wednesday by Los Angeles County officials.

Overall, the Mid-Valley Manpower Consortium, formerly headed by executive director Douglas Shaw, may have misspent more than $127,000 in federal job-training funds, including $120,750 paid over a seven-year span to two employees who actually worked for the city of Bradbury, the audit found.

The findings were contained in an eight-page report prepared by the accounting firm of Coopers & Lybrand. The release of the report Wednesday ended a four-month investigation by the county Department of Community and Senior Citizen Services into allegations of theft, fraud and misuse of federal money by Shaw.

Shaw, 50, who has headed Mid-Valley since 1979, was suspended May 12 by the board of directors, who initially sought his resignation. Shaw, currently on paid leave, has 30 days to prepare a response before county officials can begin asking for repayment, authorities said.

The report noted that Shaw had reimbursed Mid-Valley for $1,065 of the money spent. But repayment was made up to 11 months after the purchases, in effect, an employee loan, the report said.

Meanwhile, examiners from the federal Office of the Inspector General in San Francisco are continuing their investigation into Shaw’s expenses for possible criminal prosecution.

Shaw could not be reached for comment Wednesday. But his wife, Leticia, reached by phone in the couple’s Diamond Bar home, said her husband is innocent of any wrongdoing.

“He thought he resolved all this by paying back the money,” Leticia Shaw said. “If something was overlooked or not paid in a timely manner, it wasn’t on purpose.”

The practice of using Mid-Valley credit cards for personal expenses and later paying back the agency was not unusual, she said. The Mid-Valley board of directors routinely approved such practices in the past, she added.

“Now, they’re making it look like they didn’t know about it,” she said. “But nothing gets paid unless it’s approved by the board.”

Her husband can document his purchases as valid agency expenses, including the eyeglasses, which were bought for a job training applicant who was going on to college, she said.

The mixture of personal and Mid-Valley purchases arose because her husband used his own American Express Gold Card to pay for Mid-Valley expenditures temporarily until he could obtain a corporate credit card, she said.

Mid-Valley is one of six government-affiliated employment training agencies through which the county funnels federal Job Training Partnership Act money. The agency operates under a joint-powers agreement with the cities of Bradbury, El Monte, Baldwin Park and South El Monte. It provides job training and placement services to about 1,000 youths and adults annually on a $3-million budget.

The fiscal examination began in March after county officials were tipped off by an informant. Independent auditors reviewed credit card records, gas card purchases, petty cash activity and payroll reports at the agency, mainly from July, 1991, through March, 1993.

The largest expense came from salaries paid to two city of Bradbury employees, one from July, 1986, to July, 1988, and another from July, 1988, to May 19 of this year. Federal job training regulations allow on-the-job training payment for a maximum of only six months.

Sources close to the investigation have said Shaw paid the salaries as a favor to his friend, former Bradbury City Manager Dolly Vollaire, who is under investigation by the district attorney’s office for alleged misuse of city funds.

Among Shaw’s questioned expenses are a $108 stay at the Gold Coast Hotel in Las Vegas, a $208 cash advance at the Santa Anita racetrack, auto supply purchases of $115, unrecorded petty cash withdrawals totaling $664 and purchases at Home Depot, Home Planners, Searchlight Nugget Casino and Koenig Camera Shop.

Further, although several employees used gas cards issued by JE Dewitt, an El Monte wholesale gasoline dealer, no mileage records were kept on $3,888 worth of purchases, the report said. Meal expenses could not even be tallied, the report said, because no records were kept of the business purpose or those present at the meals.

Since the investigation, Mid-Valley has changed some of its operating procedures, said interim Executive Director Dan Garcia.