Raquel Rutledge

Milwaukee Journal Sentinel

A Milwaukee nonprofit that offers after-school programs for refugee children and other assistance for refugees is under investigation for alleged misuse of federal funds.

The Pan-African Community Association gave money to at least 32 people who were not eligible to receive funds, investigators with the federal Office of Refugee Resettlement have found, according to records obtained by the Milwaukee Journal Sentinel under the Freedom of Information Act.

In addition, the organization violated terms of federal grants by spending more than 35% of its annual budget on administrative costs and paying individuals in the form of money orders, rather than paying vendors directly for items purchased, the reports state.

The association received more than $440,000 in federal funds from 2012 to 2015 to help refugees from Africa and around the world buy cars and houses and to open businesses in Milwaukee. Using Individual Development Accounts, the program was designed to offer matching grants to refugees who, for example, saved at least $2,000 of their own money to go toward the purchase of a car or $4,000 toward a house.

Investigators from the Office of Refugee Resettlement, a division of the U.S. Administration for Children & Families, visited the Pan-African Community Association in August 2015 and again in August 2016 to monitor the program. They found “fundamental issues” with implementation of the program including “lack of program oversight and adequate accounting procedures.”

The federal government is requiring the association reconcile the discrepancies and repay the funds, though officials have not yet determined exactly how much was misspent.

The Pan-African Community Association is contracted through the “preferred communities program,” with the Ethiopian Community Development Council. The council, in turn, is one of about 10 national organizations — mostly faith-based — that the federal government contracts with to provide services to refugees.

Fessahaye Mebrahtu, executive director of the association, blamed the misspending on an employee who was administering the Individual Development Accounts program. That employee signed up too many people and didn’t know the eligibility rules, Mebrahtu said. And, he said, costs for translation and transportation exceeded projections.

He said there was nothing fraudulent about what happened.

“I was not controlling her activities the way I should have. I was not having proper oversight,” he said. “We blame her for lack of competence, but nobody has embezzled any money in this situation.”

The woman left the Pan-African Community Association “abruptly” sometime around February 2015, Mebrahtu said.

She could not be reached for comment.

The association’s treasurer, Solomon Tesfai, said he worked closely with bank officials to determine where the money went. He said it appeared the funds were given to refugees who were signed up for the program, even though they didn’t meet eligibility requirements.

“We had very poor oversight,” Tesfai said. “I don’t believe there are ethical or fraudulent issues.”

Several of the association’s board members weren’t so sure. They contacted federal authorities and resigned in protest in December after their concerns about oversight of the programs and funding were not addressed.

The three members — Peter Kujjo, John J. Avudria and Tshim Kadima-Kalombo Sr. — noted in an email to the Journal Sentinel that they had noticed problems increasing in recent years and said they had tried on numerous occasions to get answers and to get Mebrahtu and board leaders to inform the other members of what was happening.

“There have been problems in managing staff, high staff turnover, lack of effective control or oversight, lack of documentation of caseloads, and tracking the flows of money coming in and going out in expenditures and/or allocations to refugees,” they wrote.

Victoria Palmer, a spokeswoman for the U.S. Administration for Children & Families, said the agency is investigating the situation.

"The Office of Refugee Resettlement (ORR) upholds its responsibility to ensure taxpayer funds are used appropriately and consistently within established grant guidelines," Palmer wrote in an email. "ORR is actively working on recovering the funds."