Ever-awesome State Auditor Crit Luallen released a 77-page audit of the Louisville-based Dismas Charities today in which the non-profit transitional housing company is criticized for lavish spending and salaries for its executive staff as well as for a lack of transparency. The audit was comissioned following Dismas executives’ purchase of luxury box seats at the KFC Yum! Center last fall.
From a press release:
The exam notes Dismas hired a consultant to conduct a compensation study for its president and executive vice president, concluding in June 2009 that a base salary of $496,000 and $393,000, respectively, was not unreasonable for 2008.
The compensation for these two positions averaged nationally above the 90th percentile compared to all transitional care organizations, according to the exam.
The exam notes these salaries may be considered excessive and disproportionate, and perhaps not a proper use of public funds.
“In light of Dismas Charities’ mission to help offenders develop a pathway back to society, it is questionable whether Dismas has made the best and appropriate use of funds in the compensation of its executive staff,” according to the exam. Dismas also declined to provide auditors information regarding the income or source of funds used for expenditures made by corporate headquarters.
Without this information, auditors were unable to determine how state monies paid to Dismas were ultimately used, and whether such expenditures were reasonable and in keeping with the mission of Dismas.
At the start of the exam, after an initial overview meeting with an auditor, Dismas took a position of not allowing auditors to have any individual contact with staff, other than with or through its outside attorney.
“The many questions, therefore, that auditors had, the majority of which were never answered, had to be funneled through a third party,” according to the exam.
Fitting, then, that the charity’s namesake Saint Dismas is known as “The Good Thief.” The audit reports that the company suffers from inadequate accountability practices, a lackluster whistle blower policy, lax ethical standards and that members of its board receive no fiduciary training to prevent them from blowing tens of thousands of dollars on themselves, their friends andtheir family at the expense of the poor drug offenders that Saint Dismas is supposed to represent.
Dismas receives 97 percent of its money from state and federal contracts, and received $23 million over the last three years from the state’s department of corrections alone. Good thieves, indeed.
Among the many corrections advocated by Luallen is a revised contract between Dismas and Corrections, effective Apr. 30, to allow public inspection of all financial records.
We recommend grabbing a beer and clicking here to read the entire report (Warning: PDF).