Because Jaunt is funded in part by state and federal monies, the organization undergoes a financial audit every year, as outlined in Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The audit involves an evaluation of financial statements and federal awards. It reviews grant management and ensures we follow the rules for funds associated with the grant or award.
On August 31, 2020, Jaunt began our typical audit process for FY20 (for year ending June 30, 2020) with Robinson, Farmer, Cox (RFC). RFC has been assisting Jaunt for over a decade. During a random sampling of cash disbursements, they came across some irregularities which they found questionable. They brought their concerns to Jaunt’s Board of Directors and executive leadership and a deeper audit was initiated.
On Wednesday, March 10, 2021 we received the final audit. RFC’s findings specify:
- The findings of the audits of both Jaunt’s Financial Statement and Federal Awards concluded that the CEO purchased numerous expenses for goods, services, and travel which violated internal control policies of the corporation.
- The finding of the audit of Jaunt’s Program Income concluded that the total amount of questioned costs could not be determined because program income was pooled with other local revenues.
While not unlawful, nor a prohibited use of government funds, the auditors determined that the expenditures were beyond what would have normally been expected for reasonable business expenses. A full version of the final audit can be found here.
What did we do about it?
As RFC’s audit progressed, and more information came to light, Jaunt’s Board felt that they were no longer comfortable with the business judgment of then-CEO Brad Sheffield. On December 5, 2020, with the audit findings still months away, the Board made the difficult decision to request Mr. Sheffield’s resignation as CEO, demonstrating tremendous leadership and integrity. Mr. Sheffield tendered his resignation on December 7, 2020.
The Board appointed then-Chief Operating Officer Karen Davis as the interim CEO, ensuring effective, knowledgeable, and experienced leadership of the agency. As Ms. Davis took on the expanded responsibilities of CEO, she began to identify and develop the internal controls necessary to ensure that Jaunt will have strict financial oversight going forward. New measures, now in place, include:
- The Chief Financial Officer (CFO) reporting structure now includes a direct line to the chair of the finance committee
- The CEO and CFO meet quarterly to review the organization’s finances and accounting
- The Board of Directors must pre-approve executive expenses for training, conferences, and travel prior to the date of travel and payment
Moving forward:
The Jaunt Board of Directors is presently undergoing visioning work to further define the organization’s vision, mission, and direction, led by facilitators from Insight Strategies, Inc. In the coming months they will engage with an executive search firm as it looks for a new CEO.
Jaunt is firmly committed to operating from a place of honesty, openness, and transparency. We are creating a new role of ethics officer, who will have a direct line of communication to the Board president and the CEO. This will be an additional avenue of anonymous reporting for ethical concerns, ensuring that never again will there be any hierarchical barriers to integrity or whistleblowing at Jaunt. Additionally, business ethics education and training will be conducted at all levels of the organization to codify a culture of integrity and transparency. Training will include a review of revised policies and procedures such as employee reporting requirements for violations of Jaunt’s policies, as well as information about all available reporting resources.
In conclusion:
Jaunt has been a committed and steadfast pillar in our community for 45 years. We provide vital service to the most vulnerable and marginalized in our community, removing barriers to employment and job skills training; providing critical access to healthcare; and paving the path towards more socially connected, and thereby more mentally healthy, communities. We deeply regret the loss of confidence that these audit findings have created. We hope that the steps we have already taken, along with the future plans we have shared, will help restore community trust.
