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Feds want Lake County YMCA to pay back almost $1 million in Head Start money

Updated: July 30, 2012 7:40PM

The Lake County YMCA is being asked to pay back more than $975,000 it made in “unallowable” Early Head Start Grant expenditures.

In a report issued Monday by the U.S. Health and Human Services’ Office of Inspector General, the YMCA claimed that the money was used for Early Head Start regular operations, expansion and cost-of-living adjustments, and quality improvement between 2009 and 2010.

But the YMCA “did not maintain adequate financial records” to meet the program’s standards, the report said.

As a result, the Inspector General office recommends that the $975,431 be returned to Health and Human Services.

The YMCA has been part of Early Head Start for a decade, providing care to infants, toddler and pregnant women. But the agency in April said it would no longer take part in the program because it could not afford to — not because of the federal scrutiny. It will cease to offer the program as of Wednesday.

In the report appendix, Lynda Chott, CEO of Lake County Family YMCA, said the YMCA didn’t disagree with the findings, but “does not wish to or intend to forfeit the $975,431.”

Instead, Chott said that YMCA has agreed to work with the federal government to resolve the lack of adequate recordkeeping.

Chott said the problem stemmed from downsizing the YMCA, which included the business office. The YMCA has since made changes to improve its financial documentation.

“Much of the knowledge concerning fiscal administration of the grant was lost when the [chief financial officer] left,” Chott wrote in an April 18 letter.

The YMCA’s Finance Director Jim Malecha declined to speculate on what would be the impact if the agency is forced to pay the money back.

The audit of the YMCA was done at the request of the Administration for Children and Families (ACF), which is also a part of Health and Human Services.

But while ACF agreed with the report’s findings, it said requiring the YMCA to return $975,431 was “too severe a remedy and does not consider the benefits the program afforded the community.”

A final decision on the will be made in a month.

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