State Auditor Calls on Dismas to Be More Transparent

by admin on April 5, 2011

State Auditor Crit Luallen has released findings from a special examination of the Louisville-based non-profit Dismas Charities and is calling for transparency by the organization, which provides transitional housing for Kentucky criminal offenders.

The audit was launched last year after it was revealed that the halfway house company purchased luxury suites worth over $137,000 at University of Louisville men’s basketball and football games.

The group spent $45,000 for suites in Papa John’s Cardinal Stadium and $92,000 for suites in the KFC Yum Center.

After coming under public scrutiny, Dismas asked the auditor’s office to review its expenses and procedures. However, the group stymied the exam by refusing to release financial records, says Luallen.

“Dismas Charities must ensure that the public money it receives is used in a responsible and transparent manner that serves the interests of both the recipients of its services and the taxpayers who ultimately fund the service,” she says. “Because the detailed information we requested wasn’t provided to our office, we could not determine if state and federal funds were spent appropriately and the extent of other excessive or unusual expenditures.”

The audit questions the organization’s activities, including sponsoring Bellarmine University’s basketball team and hosting various social events, including an annual Kentucky Derby gala, an annual holiday open house and golf outings.

Officially, Dismas operates dozens of halfway houses across the country for inmates who are re-entering society. It receives the majority of its funding from the state and federal governments.

In 2009, the non-profit group received more than $27 million in federal funds and currently holds a $7 million contract with the state of Kentucky to house and rehabilitate former inmates.

Among nearly a dozen recommendations, the state auditor’s report says the company should do a better job at oversight and spend funds in accordance with its basic mission.

In s press release responding to the auditor’s report, Dismas officials say they are pleased with the exam and called it a cooperative process despite Luallen’s criticism that the group withheld important documents.

From Dismas Charities:

The report offered that Dismas declined to supply certain documents. In actuality, Dismas supplied over 1,200 pages of records. Any documents declined were either outside the scope of the review or were directly tied to the very competitive nature of our business which, if made public, would provide competitors an unfair advantage in the bidding process. The proprietary nature of this data was explained to the auditors in detail.

During the suite controversy, several charity watchdog groups stepped forward and called the expenditures inappropriate.

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