Nearly two weeks after Jackson County REACH shut its doors, Jackson’s board of commissioners met and discussed the implosion at their regularly scheduled meeting on Feb. 20. They also discussed the temporary solution configured by multiple agencies in the surrounding region to account for the organization’s absence.
Just before REACH closed on Feb. 9, the Internal Revenue Service (IRS) put a lien on all of the organization’s property in Jackson County. The IRS did so in response to REACH’s failure to pay employee and employer payroll taxes dating back several years. The organization owed approximately $81,000 in back taxes to the IRS. Another outstanding debt payment accrued as a result of the non-profit’s failure to make their mortgage payments on an apartment facility used to shelter victims of domestic violence and sexual assault, known as the REACH Village.
The mishandling of the organization’s finances led to its downfall. If REACH board members had been aware of the problem sooner, something could have been done to keep the operation running, according to a REACH board member who wished to remain anonymous. The board member stated that they were aware of their financial problems last year, after a December audit report showed significant discrepancies in REACH’s finances, including large debts to various creditors. Yet, a move to sell off some of their assets could have prevented the organization from closing down, said the REACH board member.
No investigation has been launched into criminal wrongdoing by any of the organization’s past employees. Two REACH staff members were fired earlier this month, before news of the organization’s demise went public. Finance director Janice Mason and REACH Director Kim Roberts-Fer were let go. Roberts-Fer told REACH board members that she had worked out a plan to repay all of their debts during a January board meeting, but apparently no payment plan was enacted, according to the REACH board member.
County Manager Chuck Wooten informed Jackson commissioners on Feb. 20 that Mountain Projects had agreed to purchase the REACH Village and that a large portion of that money would go towards paying off their USDA debts. The closing on the transaction was finalized on Feb. 22. According to the REACH board member, the organization should pay a nominal amount back to the USDA in the debt resettlement agreement, which is good news for a closed non-profit group with few assets and many liabilities on their books.
However, as a consequence of fiscal malfeasance, REACH of Jackson County will not be able to apply for government grants for three years. Government dollars make up approximately 80 percent of the non-profit organization’s budget. The board member expressed doubt about offsetting government grants with private donations, saying their recent botching of public grants would make any private contributor reluctant to dish out any funds. While the board member did not know whether or not they could accept local government funds, the organization will not be able to apply for federal grants anytime soon.
It is yet to be seen how Jackson County board members will respond to the REACH closing, and what their long term plan will be. If REACH is going to open back up, the county may have to ante up more funds in conjunction with the $35,000 worth of operational funds board members have approved for REACH every year since 2008. That is unlikely to happen, said the REACH board member.
Since the organization is on the federal debarred list, it is unlikely that REACH will be able to reopen in the short term. REACH board members will be going before the Jackson County commissioners in March to explain what happened and how to move forward, and hopefully, more information about the organization’s problems will be known by then.
Ann Van Harlingen, Macon County’s REACH Director, appeared before Jackson County commissioners last week to talk about their role in ensuring that domestic violence and sexual assault victims in the county do not get overlooked. She told board members that Macon’s organization, along with other agencies in WNC, are going to provide every service that Jackson County’s REACH offered clients for 33 years.
Van Harlingen and other staff members of Macon County’s REACH immediately responded to the closing, meeting with Jackson County government officials on Friday, Feb 13. When Jackson County commissioners meet again in March, a long-term plan will be discussed on how to remedy the closing and offset the lost resources.