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Cash flow woes persist for Shenandoah Area Agency on Aging

Staff paychecks delayed last week

By Joe Beck -- jbeck@nvdaily.com

FRONT ROYAL -- A severe cash flow problem forced the Shenandoah Area Agency on Aging to delay paying its employees last week, top agency officials disclosed Wednesday.

In a written statement, Roberta Lauder, the agency's director of resource development, said staff members are continuing to work and programs and services remain intact for now. Lauder also revealed that staff members have been "meeting and talking with the agency's vendors to make them aware of the serious cash flow issue."

Lauder said some of the vendors have written off their bills to the agency as donations while others are demanding immediate payment. "Most have indicated their continued patience and support," she said.

The agency is in the midst of an investigation into its finances. Three of its top officials, including president and CEO Helen Cockrell, were dismissed earlier this month.

John Hudson, chairman of the organization's board of directors, has said the dismissals were related to the financial turmoil besetting the agency.

The investigation was trigged by staff members' discovery of 25 to 30 unmailed checks up to six months old lying in the desk of another staff member. The checks, discovered about six weeks ago, were to be paid to vendors, but the Agency on Aging lacked the money to cover the checks' total amount.

The agency's money woes have also slowed the investigation into its finances.

Accountants from the Winchester firm of Yount, Hyde and Barbour arrived at the agency's offices Wednesday to begin their investigation, one week later than expected.

Hudson, chairman of the agency's board of directors, said the agency lacked the money to pay for the accountants. Under an agreement with the Virginia Department for the Aging, the state is paying for the accountants' investigation, and the local agency will reimburse the state at an undetermined time when its finances have stabilized.

Hudson said the agreement was reached on Monday, and the investigators began working Wednesday.

Hudson said he expected the investigation to be completed in 10 days to two weeks.

The investigation's purpose is to determine whether irregularities detected earlier in the agency's financial records require a more extensive investigation into the possibility of fraud.

Asked whether the agency's survival is in jeopardy, Hudson and Lauder both described its financial situation as serious and did not offer any promises for the future.

"It has taken us awhile to try to get our head around just how bad it is," Hudson said of the money troubles.

"We are open and providing services," he added. "I'm not aware of any discussion about eliminating or reducing services, But I can only speak day to day. This thing changes day to day."

The agency's list of services to older residents includes 38,182 Meals on Wheels and 6,000 rides through the WellTran program from Oct. 1, 2010, through Aug. 31.

The agency also recorded 6,483 hours of personal care and housekeeping assistance to homebound seniors during the same period.

Hudson described conversations with vendors who have not been paid as "a mixed success."

Lauder said most vendors told staff members they are willing to wait for payment but four or five have said, "you have to pay us by Sept. 30 or we'll cut services."

In a telephone interview, Lauder said the staff employees who are going without pay -- 67 out of the total work force of 77 -- will be paid "in a few days," thanks to money expected from the Department for the Aging.

The money normally received in early October is being sent in September to allow the agency to meet its payroll, Lauder said.

The board of directors, staff members, auditors and state officials are scheduled to meet today for further talks on the agency's financial troubles.

Cindy Palmer, interim president and CEO of the agency, said the staff members continue performing their normal jobs.

"I think the mood and morale is still up," she said. "We're still working together to provide services to our seniors."

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