Nonprofit's finances under scrutiny by federal officials

Federal officials are investigating the finances of a state-funded nonprofit that focuses on providing services to the Hispanic community, according to documents obtained by the Review-Journal.

The Luz Community Development Coalition halted operations this month, and its chief operating officer, State Board of Education President Stavan Corbett, resigned when financial inconsistencies came to light.

In a March 13 email sent by Olga Mendoza, the coalition's CEO, Luz asked the state's Department of Health and Human Services to "defund" more than $500,000 in substance abuse prevention grants as it works on "restructuring our fiscal side of the house." The grants comprise both federal and state funds passed on to Luz.

The state agreed to terminate the grants and help transfer Luz's programs to other agencies.

Mendoza addressed the issue in a March 16 letter to recipients of Luz's annual Cesar Chavez awards, which recognize individuals for their service to the Hispanic community.

"We were contacted by the Inspector General and were advised that a complaint had been filed and they will be coming in the week of the 19th to review our books," Mendoza wrote. "We do not know what was stated on this complaint and simply look forward to having it resolved in a timely manner."

The federal Inspector General's office would not confirm nor deny the investigation.

The letter also mentioned the abrupt resignations of Corbett and AmeriCorps Director Bryan Guiot and said Luz's "only two staff members" had been "released" by Corbett before he left.

Luz's dozens of AmeriCorps members provide health, education and other services in the Las Vegas Valley and Mesquite.

Guiot could not be reached for comment.

Luz "contacted all of our funders to inform them of the occurrences," the letter said. Luz's board decided not to hire new staffers but instead ask to be defunded.

"This is something we take very seriously and felt it to be the only responsible way to handle such a loss" in staff, the letter said.

Corbett, who is running for a seat on the Board of Regents, said he resigned after learning an investigation was "going on with the CEO." Luz's two staffers were laid off "due to no more funding," he said.

Corbett wouldn't give details about the investigation but said he wasn't a party in it.

"My role was operational and wasn't with the finance side," he said.

Mendoza and Luz board member Tremell Turner issued a statement Friday confirming that Luz had asked the state's substance abuse prevention and treatment agency to defund it. The agency falls under Health and Human Services.

"We feel it is the most responsible decision for us to make in ensuring our community continues to receive uninterrupted quality in services," the statement said.

Luz's programs will be managed by the substance abuse prevention and treatment agency and will continue to operate, it said.

The email from Luz to the state referenced an audit and said staffers "discovered inconsistencies that we will correct."

It said that Luz has never "had unallowable expenses submitted or ever had to pay back funds for over billing. We recognize that it is our responsibility to do so when we find any."

The agency was "working on building an infrastructure that we simply did not maintain," the email said. "We are asking that our programs and services cease until we are able to assure that our fiscal is secure and that our fiduciary responsibilities are met."

The Luz Community Development Coalition was formed in 2003 with a focus on educational, health and other programs in the Hispanic community.

The programs Luz has funded, according to its website, include Clark County Department of Family Services' Parenting Project, the Richard Steele Health and Wellness Center, Aid for AIDS of Nevada and the Police Athletic League.

Luz's total annual revenue was about $1.5 million, according to the most recent figures available from the National Center for Charitable Statistics. But Corbett estimated its revenue is likely about half that.