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State auditors are probing the financial records of Wyndham Lawn Home for Children after two employees were fired recently for alleged misuse of funds.

Officials would not reveal the amount of money involved. Wyndham Lawn executives declined to release the names of the two employees.

Lockport attorney Robert S. Roberson, president of the board of the home's parent agency, confirmed the firings. "I know a couple of employees were dismissed because of some irregularities with handling funds," he said.

No criminal investigation is under way so far, District Attorney Matthew J. Murphy III said. "If there was wrongdoing, we'd be interested in it," he said.

James W. Coder, chief executive officer of New Directions Youth and Family Services, the parent agency, said he could not discuss specific personnel.

Roberson said Coder told him about the episode. "They had done what seemed to be appropriate under the circumstances," Roberson said, referring to the home's management.

He said the matter was not brought before the board. "The board doesn't get involved in the day-to-day affairs of the administration," Roberson said.

Wyndham Lawn, located on Old Niagara Road at the border of the town and city of Lockport, was founded as an orphanage in 1871. It now operates a school for troubled children and adolescents, housing for foster children and a wide range of programs, primarily funded through governmental social services agencies.

The problem seems to have arisen in the intensive-case management program at Wyndham Lawn, a program that offers small-group services to emotionally disturbed children.

It is the only program at Wyndham Lawn funded through the Niagara County Office of Mental Health Services. It passes state aid for the program along to Wyndham Lawn under a contract with the county.

County Auditor Keith A. Lasher said the intensive-case management contract with Wyndham Lawn was worth $42,402 for 1999, of which $38,162 had been paid as of this week.

The county mental health office asked the state to conduct an investigation into misuse of funds, according to Michael Weiner, director of the Western New York field office for the state Office of Mental Health.

The request came Dec. 9. Weiner said the state agency's Bureau of Inspection and Audit will look into the matter.

"We are now setting up a plan to do that. I would have to think, given the nature of the allegations, it would be given a high priority," Weiner said.

County Deputy Mental Health Director Michael A. White referred comment on the matter to Assistant County Attorney J. Michael Fitzgerald.

Fitzgerald said that as a contract agency, Wyndham Lawn has to report to the county and state mental health offices.

"We had initially thought that the monies had been taken care of and were coming back into the system," Fitzgerald said, referring to restitution apparently made by the two employees.

"It appears there may have been something more here, which is why we requested the audit," Fitzgerald said.

Wyndham Lawn, which was merged with Randolph Children's Home in Cattaraugus County to form New Directions last year, employs about 110. The entire agency has about 450 workers on its payroll.

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