Commerce Department seeks $245,000 from non-profit

The Minnesota Commerce Department says a now defunct Minneapolis nonprofit owes the state $245,000.

The Commerce Department released an audit that found Community Action of Minneapolis misspent $143,000 on unauthorized consultants and thousands of dollars more on spa visits at board retreats, unnecessary out of state travel and improper administrative expenses.

The Commerce Department submitted the claim to a court-appointed receiver who is tasked with winding down the assets of Community Action of Minneapolis. The receiver, Michael Knight, reported in a court filing that he negotiated the total cost of the claim down from $283,000.

Knight is recommending that a Ramsey County District Court judge make the payment.

“At this point, we expect to be paid in full on the claim,” Commerce Department spokesman Ross Corson said.

The audit also found that there was a mass deletion of computer files just days before the state raided the offices of Community Action of Minneapolis and shut down the organization.

Auditors found that critical information from Community Action’s computer systems was missing and that there were modifications to a database dealing with weatherization payments. Corson said the department is still investigating how and why the files were deleted and altered.

The Commerce Department contracted with Community Action of Minneapolis to provide energy assistance and weatherization funds to low income Minneapolis residents.

The Commerce Department’s review of Community Action of Minneapolis is the second state audit that found misspending by the non-profit.

The Minnesota Department of Human Services released a scathing audit last August that found the nonprofit’s  former CEO Bill Davis misspent $871,000 on out of state travel, car payments and golf. The Department of Human Services is asking the court to require the receiver to return $507,000 to the state.

Corson said the Commerce Department’s civil investigation into Community Action of Minneapolis is continuing.

Court records have also shown that the FBI is investigating the nonprofit.

Davis has maintained no wrongdoing and said he thinks he’ll be vindicated.

Meanwhile, the Legislative Auditor says the Commerce Department acted appropriately in its oversight Community Action of Minneapolis.  MPR News reported last year that some staffers were concerned that Commerce Department leaders were being too lenient on the nonprofit.

Brad White of the auditor’s office said a review found Commerce Commissioner Mike Rothman and his staff acted appropriately in their oversight of how Community Action spent energy assistance money.

“We went through e-mail and other correspondence and didn’t see any indication of leniency,” White said. “In fact, we saw that they were continuing to monitor them to get them correctively in the right direction in terms of compliance with the federal requirements.”

Corson characterized the review by the Legislative Auditor as an “exoneration.”

Here’s a copy of the audit:

Here’s a copy of the letter from the Legislative Auditor:

  • elkriverscott

    No doubt all Republicans. They have been in charge for decades now. Intentions are more important than results!

  • Ron Fresquez

    It was the know nothing, brain dead Republicans clamoring for Commerce Commissioner Mike Rothman’s resignation for “Being lenient” with the organization. The Party of Stupid (Thank you Governor Piush Jindal) with no ideas and nothing to offer is proven wrong…….as usual.