LITTLE ROCK — State and federal agencies have been asked to investigate a troubled Russellville child care operation, officials said Friday, a day after the nonprofit's governing board informed workers there was no money to cover their paychecks.
LITTLE ROCK — State and federal agencies have been asked to investigate a troubled Russellville child care operation, officials said Friday, a day after the nonprofit’s governing board informed workers there was no money to cover their paychecks.
In an email Thursday night, the governing board for Child Development Inc. of Russellville informed employees that funds that had been deposited into their checking accounts to cover paychecks for work done between Feb. 6 and Feb. 10 had been withdrawn because of insufficient funds.
Rep. Andrea Lea, R-Russellville, said Friday that she has requested a state audit of CDI and expects the Legislative Joint Auditing Committee to consider the request next month. Lea said she made the request at the urging of Pope County Judge Jim Ed Gibson, who is a member of CDI’s governing board,
In a statement later Friday, the office of federal Head Start Director Yvette Sanchez Fuentes said CDI’s actions were “unacceptable, as it has caused an unnecessary hardship for their former employees.”
Fuentes said the “teachers and staff have remained committed to the children and families in their community despite the personal hardship this has created.”
She also said CDI was asked to submit detailed documentation of payroll costs for the first 10 days of the month, but failed to do so.
Kenneth Wolfe, a spokesman for the federal Department of Health and Human Services, said the agency’s Office of Inspector General has been asked to investigate.
CDI, which provided child care services to more than 2,300 children at 30 centers in 12 counties, closed its doors Jan. 31, the last day of the fiscal year for the federally funded Head Start program. It reopened the next day but eventually relinquished the federal and state grant funding it received to run the centers.
Denver-based Community Development Institute took over both preschool programs Feb. 13.
Amy Webb, spokeswoman for the state Department of Human Services, said Friday that the department’s quality assurance office is investigating the non-profit.
Webb said state officials were concerned because the Russellville firm received its grant funding earlier this month so its employees could be paid for work done between Feb. 6 and Feb. 10.
Gibson, Bettye Williamson, chairman of the board, and other members of Child Development’s governing board have not returned repeated telephone calls seeking comment. Last month, Child Development used its Russellville headquarters as collateral to receive a $400,000 loan to make its employee payroll.
Employees learned recently that the nonprofit had not paid their health insurance coverage since the first of the year, even though their employee contributions had been deducted from their paychecks.
Lori Kamerling, CDI’s community specialist at the time the firm paid Blue Cross Blue Shield of Arkansas for its January employee insurance bill on Feb. 9.
Kamerling and several other employees at CDI’s headquarters were recently fired because of Childcare Development’s financial problems.
Kamerling declined comment Friday.