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Accounting, legal bills nearly max out SAAA budget

Almost 89 percent of allocated amount spent just three months into fiscal year

By Joe Beck -- jbeck@nvdaily.com

FRONT ROYAL -- Mounting bills for lawyers and accountants are threatening to swamp the Shenandoah Area Agency on Aging's budgeted amount of $100,000 for such expenses, according to figures released by agency officials Thursday.

With almost nine months remaining until the end of the agency's fiscal year on Sept. 30, SAAA owes legal and accounting firms $88,827, leaving less than $12,000 of its budgeted amount.

In an interview after a board of directors meeting Wednesday, Chairman John Hudson spoke anxiously about the effect of the expenses on the ability of the agency to continue delivering services to its elderly clients in five counties and Winchester. Almost all of the expenses are related to a lawsuit and a forensic audit that was initiated partly to determine whether any crimes had been committed in the management of the agency's finances.

"Basic services are being paid for, but there is a money crunch complicated by legal fees and accounting fees," Hudson said. "It's stretching the agency extremely thin."

The bills are coming from the law firms of Lenhart Obenshain in Harrisonburg, McKee & Butler in Winchester and Williams Mullen in Richmond. The accounting firm hired to conduct the audit is Hyde, Young & Barbour of Winchester.

Jonathan Price, the agency's director of housing development, said in an email message Thursday that the more than $5,000 owed to Williams Mullen is for the firm's expertise in labor law issues unrelated to lawsuits filed by two former top executives at the agency.

Price also said the roughly $45,000 owed by the agency to Hyde, Yount & Barbour represents only invoices, some of which have yet to be paid.

Former executive director Helen Cockrell and former director of development Ann T. McIntyre have filed suits challenging the decisions and actions made by agency officials when they were dismissed in early September.

The agency's legal struggle with McIntyre has intensified with her filing of an amended complaint that adds four people to the suit as defendants. They are: Cynthia Palmer, acting president/CEO of SAAA; Hudson; Roberta Lauder, director of resource development at SAAA; and Benjamin Butler, one of the agency's outside attorneys.

The agency, through Mandi Montgomery Smith, a Staunton attorney appointed by the state, filed a reply to the amended complaint earlier this week, arguing the accusations contained in McIntyre's new complaint "do not support" a legal claim against SAAA.

The board huddled with legal advisers in closed session for more than an hour during Wednesday's meeting.

After the meeting, Hudson reiterated comments he made last month that the agency is soliciting money from the five counties in its service area -- Warren, Page, Frederick, Shenandoah and Clarke -- and Winchester to help pay its legal and auditing costs.

Two officials from Warren County and Winchester reacted to Hudson's comments Thursday.

"I can tell you there's a very, very strong interest on the city council that contributions to SAAA go to support services to our senior citizens," said Craig Gerhart, Winchester's interim city manager.

Asked whether that meant the council did not consider legal and auditing expenses to be services helpful to seniors, Gerhart replied, "I think that's fair."

Warren County Administrator Douglas P. Stanley issued an email statement:

"I have confidence in the current SAAA leadership in the approach to addressing the issues they are facing," Stanley said. "Chairman Hudson has been keeping me, along with the other county administrators, updated on the status of these efforts.
"We have not had any further discussions on Warren County contributing to SAAA's legal defense."

Phone messages left for officials in Page, Frederick, Shenandoah and Clarke counties were not returned.

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