State, Nonprofit Group Will Pay to Settle Class Funding Dispute

The California Department of Education and a Santa Ana nonprofit group have agreed to pay the federal government more than $3 million to settle one of several legal disputes over funding of English classes for immigrants.

The amount is only a fraction of an estimated $15 million that federal officials say is unaccounted for from a 1990s statewide adult education program. Federal officials say some of the money supposedly was spent on classes that never took place.

The state education agency, which administered the federally funded project, said late last week it agreed to pay the U.S. Department of Education $2.5 million. The state department was sued in 1997 for allegedly overlooking questionable accounting practices by several community organizations that were paid to conduct English as a Second Language and citizenship classes for adult immigrants. The state agency admitted no wrongdoing.

In a separate settlement, Citizens in Action Community Development, a Santa Ana nonprofit organization, agreed to pay nearly $640,000 to the federal government, the group’s attorney said Monday. Federal prosecutors say they traced illegally obtained grant proceeds to Citizens in Action, which received assets from another nonprofit group, Los Angeles-based Hermandad Mexicana Nacional Legal Center.

The legal center was among 10 community organizations accused in 1998 of misusing federal education grants. Federal prosecutors accused Hermandad of spending money on real estate, among other improper purposes. The state education department ceased funding the groups that year and has since been trying to recover the money.

In the only criminal charges to stem from the disputes, a federal grand jury indicted Hermandad Mexicana National Legal Center, the Los Angeles group, in July 2001.