The clock is ticking on United Neighbors, Inc.

From firings and board resignations to lawsuits, investigations and allegations of mismanagement of funds, the 37 year old organization was brought to its knees over the past year.

Now, with the Iowa Finance Authority demanding repayment of $235,600 in U.S. Department of Housing and Urban Development grant funding and its insurance carrier dropping future coverage for its Rental Assistance Program, board members and upper-level staff of the nonprofit are resigned to the idea the United Neighbors name no longer will exist once its legal matters are resolved.

Rather than fold, a familiar face from the organization's past is stepping up to re-establish the mission that served him as a child.

"It's not fair for adults to mess up what chance some kid may have to see outside of their neighborhood or environment," Board President Frank Berka said. "If United Neighbors leaves, who's going to do that, especially with all the cuts to social services?"

New leadership from the past

On a sunny Sunday afternoon, Berka took a seat on a park bench behind the Lindsay Park ball diamond in the Village of East Davenport.

With the exception of having to duck a few softballs that cleared the fence, Berka spent more than two hours detailing his time in early 1980s at United Neighbors.

Berka, who is Native American and black, was raised by a single mother who had been an orphan at the Annie Wittenmyer Home.

His mom was raising three children on her own and needed help. She found Ida Johnson, an outreach coordinator at the time, who took Berka into a United Neighbors youth group to join the other 20 to 30 youth in the program.

"She would make calls to other agencies that had funds," Berka said. "She was like that resource person."

He credits Johnson with organizing events for youth that kept them out of trouble, including the summer parks program.

"You have to remember, there weren't computers at the time, so a jam in the park was a big deal, especially for the kids," he said.

Even though they were just children, Berka said part of the United Neighbors' influence included an education in civics. The children sometimes attended city council meetings, and Berka recalled living three houses down from former Alderman Karl Rhomberg and speaking at the council podium when the city was grappling with the fate of the old Taylor School.

While Berka outgrew United Neighbors' programs, he never forgot the agency's influence on him. And that's why he couldn't say no when Johnson approached him about joining the board in 2014.

It's also the reason he continues to fight for the survival of the organization's mission.

Berka can't escape the irony that the lessons he learned going through the program may contribute to its demise. It was he who made the decision to contact authorities when an email to board members suggested something was seriously amiss.

"This kid you have influenced as a teen comes back, and he drives the ship and literally runs the bus right over you," Berka said. "I've never been a yes man."

Problems before the problems

While the Iowa Finance Authority made the decision to suspend the Rental Assistance Program in October 2016, problems within United Neighbors became apparent to Evelyn Nelson when she was hired as deputy director the previous June.

With a background in public-interest law, Nelson worked for the Legal Aid Society for a year before working in a non-profit administration training program in Ohio that focused on non-profit management.

She previously worked with United Neighbors as a consultant and once wrote an assessment of the organization that concluded it was "disorganized and in need of help." Board minutes reflect that lack of direction during the process of replacing Johnson, partly because she was non-committal about her departure.

In June last year, Nelson was chosen to replace Johnson as executive director.

Despite the issues in getting there, Nelson said she fell in love with United Neighbors' mission of helping others.

"Working with disadvantaged communities has always been my passion," she said. "I didn't necessarily want to litigate for high-profile clients. I feel that everyone is entitled to advocacy, and I want to help with that any way that I can."

She immediately set out to understand exactly how the organization operated. She asked a lot of questions and frequently encountered roadblocks.

"I wasn't able to look into the programs the way I wanted to," Nelson said.

Board minutes show that Nelson was pouring over receipts when she discovered a now-former employee had made unauthorized purchases of food and household items at Walmart, using United Neighbors' American Express Card.

There were concerns with the same former employee over the use of the agency's computer system. But those issues would pale in comparison to the storm to come.

"... records have been destroyed, computer codes were attempted to be changed, we can't get into the computers because an IT person says the computers have been tampered with by someone who came in here and was qualified to know how to do so," according to board minutes from September. "... wiping out the camera system caused us not being able to see who did this."

With Berka pushing for Johnson's retirement and the majority of board members in agreement, Nelson and three members of the board met with Johnson on Sept. 25 to present her with an early retirement offer. She refused it.

Johnson then was terminated, along with staffers Tonya Williams, Patricia Williams and Terry Fuller. All four women filed suit against Nelson and the United Neighbors board in the months that followed.

But once Johnson and the others were gone, Nelson and Berka notified authorities to their concerns.

On Oct. 5, an email from Nelson to the Iowa Finance Authority detailed compliance issues with the Rental Assistance Program. It was time to dig deeper.

Mismanagement of funds 

Nelson's email to the Finance Authority triggered an on-site monitoring visit from compliance officer Rita Eble on Oct. 21.

Three days after her visit to Davenport, Eble notified Nelson via email, "IFA will not pay any further TBRA (Tenant-Based Rental Assistance) funds out to clients until United Neighbors has completed their financial analysis."

Several members of the United Neighbors board then resigned and, when informed, Program Director Carolann Jensen wrote in an email to Eble, "Great (sic) were they all in on it?"

Replied Eble, "some were relatives and others looked the other way I think."

None of the former board members responded to requests for comment for this story.

In December, Eble sent another email to Jensen, estimating a required reimbursement to the state of $187,642. But United Neighbors' financials would be required for verification of the amount.

An attempt was made by United Neighbors to re-verify 21 of its 104 tenants. As part of the process, the Finance Authority randomly selected five and found more discrepancies. Officials from the Finance Authority on March 6 announced they would not provide any more rental-assistance funding under the grant, which would have disbursed a total $502,560 over its two-year cycle.

In its findings, the Finance Authority cited missing and incomplete information, including income qualifications, rent, occupancy, landlords, third-party verification, inspections, lead-based paint requirements and leases.

On March 16, Jensen was in contact through email and phone with Kris Kanakares, an agent from the U.S. Department of Housing and Urban Development Office of Inspector General, regarding United Neighbors' problems.

In her email to Kanakares, Jensen indicated that "IFA is working on the next steps, which, more than likely, will end in a suspension of the grant and a demand for all the HOME funds returned to IFA."

Less than a week later, the Finance Authority issued a notice of default and termination of the grant funding.

The notice of default demanded full repayment of funds, based upon general non-compliance, failing to provide certification of no lead-based paint for tenant properties, misspending, failure to provide enforcement and failure to comply with federal rules and regulations based upon the random review of the same five tenant files.

In an open records request to the Iowa Finance Authority pertaining to communications about United Neighbors, none of the draw sheets, which detail the recipients and amount of grant dollars requested, submitted by the organization over the course of the grant contained requests for inspection costs or income determination.

Before the extent of United Neighbors problems were known, this red flag came up once in a March 2016 email between Eble and United Neighbors, where Eble alerted Tonya Williams and Johnson that these costs were missing.

The Finance Authority took this into consideration before making its decision on the grant.

"They did not make a request for reimbursement for these costs, which is one of the reasons the grant was terminated," Communications Director Ashley Jared said.

United Neighbors filed its written appeal April 6, arguing that "to terminate the contract and require a full refund at this point penalizes UNI for its proactive efforts in notifying IFA of the issues and seeking to cure the deficiencies with the grant where possible."

The organization contended that "the default and termination notice is unreasonable because it is based on only five files and does not take into account the grant funds that were provide to qualified TBRA (Tenant-Based Rental Assistance) recipients and used for their intended purpose."

While acknowledging fault in overpaying some of the clients, United Neighbors asserted that it was not to the extent the Finance Authority contended. The appeal was supposed to be heard by Finance Authority Director Dave Jamison, but the review has been delayed as talks continue between attorneys representing both parties.

"Our attorney is in contact with their attorney to negotiate a settlement," the IFA spokeswoman confirmed. "An appeal hearing is currently on hold."

CDBG funding at risk

While the city of Davenport's Citizens Advisory Committee has recommended providing $78,898 in Community Development Block Grant funding for United Neighbors Summer Parks and DREAM Home Buyers programs for the next fiscal year, those funds have not been committed.

The funding initially was set aside, pending completion of a forensic audit and submission of required application items by June 1.

Those documents have yet to be provided, but once they are, Community Planning and Economic Development Director Bruce Berger said that Citizen's Advisory Council will review them and make a recommendation at its June meeting.

The city of Davenport also has requested documentation and verification for United Neighbor's existing CDBG contract for its Summer Youth program.

An initial deadline of May 9 was given to submit the required documents, but was extended.

"While some of the required information was submitted, they are still working on several items," Berger wrote. "Staff met with United Neighbors to clarify what is needed and set a May 19 deadline, after which staff will review and make a determination regarding compliance.

What's next

Despite the turmoil, those remaining at United Neighbors are adamant they are here to stay.

"I never felt like I need to leave now," Nelson said. "I thought it could be fixed and even when Ida was still here, I tried to revamp the after-school programs. I didn't think (leaving) was the right thing to do."

The ongoing lawsuits by Johnson and the other three former employees have meanwhile created a potentially long wait.

The recovery of personal property is one in a combination of six claims filed by Johnson, Tonya Williams and Fuller, along with breach of contract, interference with contract, an Iowa wage claim, negligence and defamation.

Patricia Williams' lawsuit contains an Iowa wage claim, defamation and negligence complaints.

The litigation prevents the organization from rolling over its assets into a new non-profit, but the goal is clear: Get back to the roots of the mission.

"There's a lot of people rooting for United Neighbors, but we just need to get over this hump," Berka said. "I could easily just say I wash my hands of it and want no part, but it affects me, because, if I did, it just tells me I'm selfish and wouldn't sacrifice for a kid out there."

As Berka sat on the park bench and watched children ride up and down the bike path, he clicked on an old photo on his phone of his classmates, many of whom participated in programs at United Neighbors and the Friendly House, from what he referred to as "the good times." 

The United Neighbors name may be tarnished, he said, but its mission and the impact it had on children like him don't have to be.

"It has a spot in my heart, because it really sent me on the path," Berka said. "That's why I'm so passionate about United Neighbors. It holds a special place in my development, and Ida was a big part of that."