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Buffalo Urban League overbilled county, may have committed fraud, report concludes

Susan Looby had worked in human services for more than 15 years before coming to the Buffalo Urban League in January 2014. She couldn’t believe the loose practices and lack of training at the agency, she said, and the repeated willingness of high ranking administrators to overlook it all.

“In my head it was like, ‘Oh my gosh, how are they getting away with this?’” Looby said.

So when Erie County Comptroller Stefan Mychajliw released a harsh audit of the community agency on Thursday, she felt vindicated.

The Buffalo Urban League overbilled Erie County by tens of thousands of dollars last year, according to the comptroller’s review of the organization’s $1 million contract with the county. The community organization also failed to properly train its staff, protect children’s privacy, or honor its reporting requirements with the Department of Social Services, the audit found.

“At best, it’s gross mismanagement,” Mychajliw said. “At worst, it’s outright fraud.”

He followed up on a whistleblower letter from November 2014 that was signed by seven Urban League employees – none of whom still remain at the agency. The review found the organization engaged in double bookkeeping, reported different time sheet numbers for employees in different systems, and billed the county for hours employees could not possibly have worked.

Erie County contracts with the Buffalo Urban League to provide child welfare and preventative services, with the goal of keeping families together.

“They did not protect children the way they are legally obligated to, and most importantly, the way they are morally obligated to,” Mychajliw said.

Mychajliw also criticized the Buffalo Urban League for stonewalling his staff’s attempts to get information to the point that he said he considered legal subpoenas.

“The management of the Buffalo Urban League put up numerous roadblocks,” he said. “They did everything in their power to, basically, not give us information.”

Buffalo Urban League leaders disagree with the audit findings, calling the report “inaccurate and unwarranted” and out of keeping with any acceptable review standard. The agency submitted an 18-page response to the comptroller’s findings, but the final report only summarized the detailed response as a 4½-page appendix.

“This is totally unfair,” said Brenda McDuffie, the Buffalo Urban League’s president. “As a community, we should question how the comptroller would use his office to provide a report that is biased, irresponsible, inaccurate and flawed.”

‘Very concerning’

Among the findings that Mychajliw called the most “outrageous,” the Urban League:

• Claimed three employees worked a total of 480 hours in one day, crediting the workers for 180 hours, 170 hours and 130 hours, respectively.

• Billed five hours for work for a supervisor’s review a case file that took only 15 minutes and consisted of leaving voice mail messages.

• Used two different systems to keep track of employee work hours and billable time, with the billing system indicating more hours worked.

• Used a non-secure system for client case data, in violation of privacy laws.

• Did not provide quarterly reports to the Department of Social Services when due, as required under contract.

The Buffalo Urban League holds at least seven contracts with Erie County. The Comptroller’s Office audited only one of them – a $1 million contract to provide preventative services in 2014. The remaining contracts the county has with the Urban League are worth more than $200,000.

The agency reported $3.9 million in revenue in its 2013 report to the IRS, about three-fourths of which comes from contracts like those it has with Erie County.

The review concluded the agency overcharged the county roughly $40,000. The comptroller submitted the findings to the Erie County Legislature Wednesday. Legislature Majority Leader Joseph Lorigo said the Legislature will likely hold a hearing on it in January.

“The findings are very, very concerning,” he said.

‘Human errors’

McDuffie said the comptroller’s investigation was sparked by disgruntled employees who have filed other claims against the organization that have been dismissed as unfounded. She also said the Urban League made no attempt to obstruct auditors, but since the organization handles a great deal of private information, separating that out from the requested data was a time consuming process.

She also said the overbilling accusation occurred because supervisors wrongly logged in all their work for the past month on a single day at the end of the month instead of inputting the billable work hours on a daily basis. But the hours of work claimed were real.

McDuffie said shortly after the comptroller began making inquiries, she began her own internal investigation, and in collaboration with the Department of Social Services, determined that a failure to follow procedures in some areas warranted a $30,576 refund, which was made.

Two programs

The Urban League keeps two sets of programs, one a state-approved case management system and the other a billing system. McDuffie said both systems require employees to agree to confidentiality terms.

While quarterly program reports were filed with the county, as the contract requires, three out of four quarterly financial reports were not, McDuffie acknowledged. But she pointed out that a fourth quarter financial report was submitted, and it broke out fiscal information for the first three quarters.

Finally, McDuffie asserted that the errors raised by the Comptroller’s Office and found through her internal review would eventually have been caught through the agency’s annual reconciliation process. She said it was unfair of the comptroller to issue his findings when repayment to the county was already made.

“Are there going to be human errors? Are there going to be mistakes that are made? Absolutely,” she said. “That’s why we conduct a reconciliation.”

Tightening up

Investigative Post, a nonprofit investigative reporting center in Buffalo, first reported over a year ago that the seven social workers, then employed by the Buffalo Urban League, sent a letter to the Erie County Comptroller’s office expressing “extreme concern” about how they believed their organization was failing to live up to the county contract.

Their letter cited short staffing, inflated billing and a failure to store client information securely or train staff to standards outlined in the contract. The letter prompted Mychajliw to launch the audit.

Social Services Commissioner Al Dirschberger said that while the comptroller’s report shows mistakes were made, he doesn’t believe the Buffalo Urban League is guilty of willfully deceiving the county. He pointed out that the $40,000 discrepancy is small out of a $1 million contract. He also said it’s important to distinguish between the strong programs the agency provides, and the contract monitoring process, which is being tightened up on both sides.


Looby, one of the seven whistleblowers, said she believes the Urban League is still trying to avoid responsibility. She said the Department of Social Services should take a much more critical look at the agency. She said 13 of 16 employees have left the agency’s Preventative Services program from November 2014 to this past August.

She strongly disagreed with McDuffie’s assertion that none of the whistleblowers brought matters to her attention, saying that many employees repeatedly raised concerns with her and with other supervisors. And she disagreed that the billing system is a safe and secure way to store sensitive case information.

“To me, it seems like they’re still not accepting any accountability for anything,” she said. “This is a nonprofit that we give a lot of money and grants to. They should be completely transparent, and they’re not.”