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Mass Auditor: Berkshire County Arc Improperly Used $778K In State Funding

Two white women sit at a wooden table in a book-lined room.
Josh Landes
Massachusetts State Auditor Suzanne Bump (R) meets with Berkshire County District Attorney Andrea Harrington (L) in 2019.

On the same day she announced she won’t seek a fourth term next year, Massachusetts State Auditor Suzanne Bump released a report this morning alleging improper use of funds by Berkshire County Arc. The Pittsfield-based nonprofit provides services to people with disabilities. Bump says the organization misused almost $780,000 from the millions it receives annually from state agencies. The report examines the years between 2017 and 2019. Neither Berkshire County Arc nor the Berkshire County District Attorney’s office immediately responded to a request for comment on the report from WAMC News. WAMC spoke to Bump about the audit report, as well as her decision to not seek reelection in 2022.

BUMP: A good deal of the expenditures that we question in this audit has to do with support that Berkshire County Arc gave to a sister company, Berkshire Omega, which holds real estate that then Berkshire Arc rents from them. And money that was supposed to go to direct care services was instead spent on capital improvements to those properties.

WAMC: Now, could you break down why exactly that's an improper use of state funding?

State contracts are pretty clear about all what you can spend money on and not, and what you can't. And it's a matter of state law that you can't use funds that are supposed to go for care of individual for real estate improvements. The state is not in the business of investing in private real estate holdings. And that should not come as a surprise to the folks at Berkshire County Arc. Neither should they be surprised at some of the expenses that we had questioned because, again, it's pretty clear that state monies are not supposed to be used for the benefit of staff entertainment, for instance. And likewise, it shouldn't have come as a surprise to the executive director that we would question the travel, credit card rewards travel that he used for personal use, because any benefits that accrue under credit cards are supposed to be used for the benefit of the clients benefit of the agency, not for the enrichment of any single individual, including the CEO.

Could criminal charges emerge from the results of this audit?

That is definitely a question that I can't answer, and really has to be one that would be contemplated by either county or state officials. This audit will be, just as we always send them out to the appropriate law enforcement authorities. But it's completely up to them to decide what to do

When you release an audit like this, is there an immediate impact on the target of the audit in question? Like, now that this has been made public, will Berkshire Arc have to respond to this in some sort of legal format, in some sort of demonstrative effort to resolve the questions raised by the audit?

We don't have any enforcement authority here in the auditor's office. But certainly, the agency is going to have to respond to the several agencies that help contribute to its budget. There isn't a single state agency that provides the approximately $25 million a year in state funding that Berkshire County Arc receives that comes from multiple state agencies. And so we've kept the Executive Office of Health and Human Services apprised of the progress of this audit. And so those agencies that have provided funding will be coordinating their inquiries. There's also another state office, the Office of Operational Services, which will work with those agencies to determine what monies if any should be recovered from the agency or if there are other ways to deal with this situation.

I want to turn to your own announcement about not seeking reelection. Why are you choosing to not seek another term in office, Suzanne?

Well, I continue to be really excited about the work that we are doing here. The reality is that after 12 years, and that’s what it will be at the conclusion of my term in January of 2023, I think that fresh approaches, I think that other people who are equally committed to the mission of the office, of [the] transparency and accountability mission, deserve a chance to see if I can bring this office further than I’ve been able to bring it.

After this story aired, Berkshire County Arc offered the following statement to WAMC:

As Board President and parent of an individual served by the agency, I, along with our Board am completely confident in the leadership of Berkshire County Arc and its dedicated and passionate staff, led by CEO Ken Singer. The Board and the agency refute findings in the audit report and maintain that the OSA grossly mischaracterizes the agency.

BCArc is dedicated to improving the quality of life for the more than 1,000 of our family, friends, and neighbors through 43 residential sites and day programs. Under the 41-year leadership of Ken Singer, BCArc has a long and impactful track record of growth, building it from a $7M budget in 1994 to a $40M budget today.

Over the course of two years, BCArc complied swiftly and fully with OSA auditors’ requests, producing hundreds of pages of documentation, all while delivering award-winning service to program participants, and helping them navigate and overcome unprecedented challenges due to the Covid-19 epidemic. Services for the individuals whom BCArc serves have not been impacted.

BCArc has spent, received, and used public funds in accordance with its state contracts: to the benefit of the more than 1,000 individuals that it serves.

BCArc has consistently complied with recommendations from regulatory and/or oversight agencies or internal/external auditors regarding policies, procedures, and practices.

The Board maintains that, in its audit report, the OSA grossly mischaracterizes the agency. This is surprising, as during the last exit meeting, BCArc was assured that the issues are related primarily to documentation.

As the audit team acknowledged during the exit interview, BCArc’s finances are more than sufficient to pay for any non-reimbursable expenses. BCArc has since modified its procedures to require more rigor and detail on expense documentation as recommended by the OSA.

Finally, the Board recognizes that there are always improvements to be made to bookkeeping systems, policies and procedures. We welcome the guidance of the OSA. The OSA does acknowledge that BCArc implemented new or revised accounting practices as they recommended, and BCArc and its Board of Directors will continue to optimize our practices going forward.

—Michael Ferry, Chair, Berkshire County Arc Board of Directors

Josh Landes has been WAMC's Berkshire Bureau Chief since February 2018, following stints at WBGO Newark and WFMU East Orange. A passionate advocate for Western Massachusetts, Landes was raised in Pittsfield and attended Hampshire College in Amherst, receiving his bachelor's in Ethnomusicology and Radio Production. His free time is spent with his cat Harry, experimental electronic music, and exploring the woods.
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