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Audit details turmoil at Somerville nonprofit

Kimberly Smith-Cofield abruptly resigned as executive director of the Community Action Agency of Somerville in June. She had held the post since 2009.

Kimberly Smith-Cofield abruptly resigned as executive director of the Community Action Agency of Somerville in June. She had held the post since 2009.

The former director of the agency that provides Head Start for preschoolers in Somerville and Cambridge freely used the agency’s credit card for personal expenses, racking up more than 100 personal charges in a single year, according to an independent audit that apparently cost Kimberly Smith-Cofield her job.

As the audit was being finalized, Smith-Cofield abruptly resigned as executive director of the Community Action Agency of Somerville in June, followed closely by the agency’s finance director and later four members of the board. Agency officials declined to release or even describe the audit findings, calling them confidential.

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But a copy of the audit filed with the attorney general shows that Smith-Cofield frequently used the agency’s credit card for unspecified personal purchases, despite repeated warnings from agency officials to stop. The audit describes Smith-Cofield’s personal purchases as “misappropriation of agency funds,” though it does not disclose the amount. The audit also suggests Smith-Cofield repaid the money.

Now, the state and federal agencies that provide nearly all of the agency’s $5.5 million budget are calling for better ­financial controls, and the state Department of Housing and Community Development has launched its own audit of the agency, which Smith-Cofield had run since 2009.

“We’re stewards of public money here,” said Arthur Jemison, deputy undersecretary of Housing and Community Development. “The things that we saw in the audit concerned us a great deal. It goes to our mission, which is we’ve got to make sure families take advantage of the services, and the public dollars that go to support that are being spent efficiently.”

If the state’s audit uncovers more problems, Jemison said, the Community Action Agency could face penalties, including the loss of hundreds of thousands of dollars in state-distributed grant money.

“We’ve got a wide range of options and everything is on the table,” said Jemison, whose department is in charge of distributing the federal grants.

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Reached by phone Sunday, Smith-Cofield, who said her last name is now Simmons, declined to comment. “I have nothing to add to the story,” she said.

Disclosure of the findings by independent auditor James A. George of Boston pierces a wall of silence that has surrounded the Community Action Agency since Smith-Cofield left on June 30 after a little more than three years on the job.

According to documents the agency filed with the IRS, Smith-Cofield was paid $85,442 in 2009, the latest year for which information is available. Officials would not disclose Smith-Cofield’s most recent salary.

Other agency leaders have given varied reasons for remaining silent. Suzanne Bremer, the board chairman who resigned Oct. 2, along with three other board members, said she could not comment because she had made a deal as part of Smith-Cofield’s resignation.

“I have signed a nondisclosure agreement with the former executive director,” said Bremer in a phone interview.

The current board president, Sonja Darai, also declined to talk about the problems on Smith-Cofield’s watch. Instead, she issued a statement that acknowledged the difficulties and pledged to continue to improve internal financial controls.

The Community Action Agency of Somerville “has made great strides to improve its operations which support its critical mission of providing Head Start education to 355 children in Somerville and Cambridge and assisting those in the community who are the most in need,” Darai wrote.

Last year, most of the agency’s $5.5 million budget was drawn from federal block grants. The lion’s share — $4.4 million in state and federal money — paid for Head Start, and $417,540 paid for an advocacy program to help prevent homelessness and help low­income residents obtain benefits.

Though demand for the agency’s services remains high — more than 13,000 Somerville residents live in poverty, the highest percentage since 1993 — questions have swirled around the agency’s leadership since 2010, when a state review found weaknesses in basic financial management. A federal review of Head Start this spring also found deficiencies in accounting practices.

Since June, an accounting firm, Glivinski & Associates, has been handling accounting and finances, part of a larger effort to improve management, which included the development of written ethics and ­conflict-of-interest policies.

But the findings in George’s 29-page annual audit show just how serious the problems had become. Agency officials in addition to Smith-Cofield were making purchases on the agency’s credit card without providing receipts, and the internal review of expenses was so lax that George said agency officials might not detect misuse of funds.

“Credit card transactions are unable to be substantiated,” according to the audit, describing the failing as a “material weakness,” the accounting term for a serious problem.

The audit did not specify what personal expenses were incurred with the credit cards.

Since the audit, the board has clamped down on credit card use, disciplining employees who abuse the privilege.

In August, Jeffrey Karon, the director of administration and finance, resigned, though he insists he did nothing wrong. “I was the scapegoat in the whole thing,” he said in an interview. “I have nothing to hide.”

Karon declined to offer specifics, on the advice of his attorney.

Three former employees told the Globe that the departure of Smith-Cofield, Karon, and the board members ended a long, unhappy period at the agency’s Union Square offices, describing managers who clung to outdated and inefficient practices and an executive director who was frequently absent and seemingly disengaged.

“You could cut the tension in the air,” said Claudia Arrecis, 33, a former housing and benefits case manager who worked for the agency until January 2011. “There was never an appropriate communication of anything. One day things were done one way, and the next day they would change it. We just kind of had to wing it, and the people who paid the price . . . were the clients.”

Somerville’s mayor, Joseph A. Curtatone, expressed deep concern for the future of the agency, but said he felt the board of directors had taken the necessary steps when they were presented with the issues. Curtatone said he supports an ordinance pending before the Somerville Board of Aldermen that would require nonprofits that receive city money, including the Community Action Agency, to abide by the city’s conflict-of-interest and ethics disclosure rules.

“We are the watchdogs entrusted with public tax dollars, either directly or indirectly,” Curtatone said. “We have a certain responsibility to be transparent and alleviate any concerns of any conflicts.”

Now, the board is interviewing finalists recommended by an independent executive search firm for an interim director who will oversee the Community Action Agency while a nationwide search is conducted for a permanent leader.

But the woman who has been acting director since Smith-Cofield’s departure already is facing controversy for the way she runs the community advocacy program. A former employee last month filed a discrimination complaint against Melissa McWhinney, while another alleged that she disregards the same management issues the state Department of Housing and Community Development is investigating.

Daniel Dessin, a housing and benefits advocate fired last month, said McWhinney forced him out of the agency because of his race, sex, and ties to the employee union, where he was a vocal negotiator during protracted contract talks that ended in June. The complaint is pending with the Massachusetts Commission Against Discrimination.

A second former benefits advocate, Gleisson Araujo, 40, said in an interview that McWhinney sharply criticized him when he attempted to raise serious organizational and federal reporting problems inside the advocacy department. Frustrated at the inaction, he resigned in 2011.

McWhinney, along with agency attorney John Carey, declined to comment on the personnel issues, citing privacy rules.

“I’m relieved to have left that place,” said Araujo, who said the only thing he misses are the people he used to help. “It’s a shame you have public money being wasted and misused.”

Matt Byrne can be reached at themattbyrne@gmail.com.

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