Sen. Fasano says state needs more thorough auditing of Amistad America [The Day]

August 15, 2014

By Joe Wojtas | The Day

State Sen. Len Fasano, R-North Haven, sent a letter to the state Office of Policy and Management Thursday asking why it did not conduct a more complete audit of Amistad America.

In his letter to OPM Secretary Benjamin Barnes, Fasano asked about the audit, Amistad America’s salaries, grants, fundraising, income and its financial relationship with Ocean Classroom Foundation of Maine.

OPM spokesman Gian-Carl Casa said Thursday that Attorney General George Jepsen has already indicated he is looking into the issues raised by Fasano.

Fasano asked why the audit was done only through March 2012 and not up to the present; why Amistad America continued to receive funding while receiving four years of extensions to submit its annual audit statement to the state; and why OPM did not impose sanctions such as suspending funding until the audit statements were complete.

“Unfortunately these audits confirm what was feared, that there are wide deficiencies in the financial management of the Amistad America Inc. organization across the board,” he wrote, adding that no further state support should be given without a corrective action plan.

“We haven’t released the funding and won’t until we’re satisfied that state funding is being handled properly and the ship’s mission can go forward. Initial reviews do not show malfeasance on the part of Amistad America, although they do indicate bad bookkeeping,” Casa said.

Last Friday, a long-delayed state audit of Amistad America showed it defaulting on hundreds of thousands of dollars in debt, lacking enough cash to operate for a month and having “material weaknesses” in its record-keeping that could have exposed it to mishandling of funds. The audit did not identify any apparent criminal activity.

Also last Friday, 25 lawmakers including state Rep. Diana Urban, D-North Stonington, signed a letter to the attorney general asking him to investigate the relationship between Amistad America and Ocean Classroom Foundation, which announced last month that it would close because two of its three ships needed expensive repairs.

Since November 2012, Amistad America has paid Ocean Classroom $5,000 per month to manage and maintain the Amistad. That contract will expire Aug. 31. Ocean Classroom Executive Director Greg Belanger previously headed Amistad America and organized the relationship between the two organizations.

In an interview Thursday afternoon, Fasano said he did not know why the firm hired by OPM to conduct the audit stopped at 2012.

“I don’t know why you wouldn’t ask for 2013 at least. You have the books,” he said.

Urban, who has led the effort to determine how Amistad America spent $8 million in state finding while losing its nonprofit status for failing to file tax returns, has questioned why the state did not audit the financially troubled organization during the period of 2006 to 2009. Casa said Thursday that those audits had already been done.

Fasano said he has a lot of unanswered questions, such as why OPM continued to fund Amistad America over a four-year period when it failed to submit audit statements.
The state announced just last month that it had ceased payments to Amistad America, even though The Day had since May 2013 been reporting on the organization’s financial troubles. Other stories dating back to 2010 raised questions about the organization’s finances.

Fasano said Thursday he is also interested in how many other organizations may be receiving money from state Department of Economic and Community Development but have failed to file audit statements or “are in the red.”

In a statement attached to his letter, Fasano wrote: “The level of disorganization, failure to fulfill responsibilities and mismanagement of funding by Amistad America, Inc. is appalling. The audits are our first direct look into the bigger problems at stake here. They also raise further questions that must be addressed immediately.

“The Amistad is one of Connecticut’s greatest historic treasures. It pains me to see the organization responsible for preserving the ship in such financial trouble. We need complete transparency now, so that we can resolve the problems, respect our taxpayers and protect our ship,” he said.