Citing a history of alleged fiscal mismanagement within the operations of Indian Centers Inc., state education officials have decided not to renew $373,000 in annual contracts to the firm's preschool in Maywood and day-care program in Bell Gardens.
In an April 25 letter to Indian Centers Executive Director Lyman F. Pierce, state officials complained that the social services firm has "failed to maintain accurate accounting records" and "has not adhered" to an agreement to return money that was overpaid in prior years.
Pierce reacted to the decision, however, as if it were just as well. "I was going to terminate (the contracts) anyway," he said in an interview last week.
Considering "the horrendous amount of bookkeeping and paper work that has to be done" for an amount of money he regards as "Mickey Mouse," Pierce said the state contracts were more trouble than they were worth. "You've got a noose around your neck in starting these contracts. . . . They're just management nightmares."
Pierce also said Indian Centers had difficulty getting insurance to protect its employees from "child-care problems" such as molestation claims. "If we get hit with one accusation we'd get wiped out."
'I Just Want to Get Out'
"I just want to get out of the thing, the sooner the better," Pierce said. "I hope the people who pick up these contracts have better luck."
The state action is not expected to affect the roughly 140 predominantly low-income children enrolled in the programs in Maywood and Bell Gardens, which education officials otherwise rate as "pretty good," according to Janet Poole, assistant director of child development for the Department of Education. Poole said other firms are already competing for the state funds so they can step in when the Indian Centers contracts expire June 30.
"We're making every effort that there not be a disruption of service," she said.
Poole acknowledged that the decision to halt the contracts also came in part because of a U. S. Department of Labor audit being conducted at the Indian Centers.
"We received a preliminary report (from federal auditors) which questioned various expenditures," Poole explained. "But we have not received the final audit." She said auditors have apparently "asked for backup documentation for various things and they have not received them."
About $3 Million in Aid
As a private, nonprofit corporation, Indian Centers receives federal funds to operate four job-training and placement facilities in Los Angeles County in addition to the Maywood and Bell Gardens programs, which have been in business since about 1980, Pierce said. In all, he said, the firm gets about $3 million in city, county, state and federal assistance.
A spokesman for the Department of Labor inspector general's regional headquarters in San Francisco declined to comment beyond confirming that an audit was in progress. The examination is being conducted through the private Los Angeles accounting firm of Gilbert Vasquez & Co.
Poole said state officials don't have sufficient information from federal auditors to judge the extent or nature of the suspect expenditures. But she said state officials expect the auditors to determine if the firm was "using child-care money for inappropriate purposes."
Indian Centers "has a history of problems in terms of fiscal mismanagement," Poole said. "We were sufficiently concerned not to offer them a contract next year."
In a separate interview, state child development director Robert A. Cervantes explained that the Indian Centers has been under scrutiny for at least the past two years because "we found out they did not provide the level of service for which they were contracted, and so we asked for some money back. . . . They'd been delinquent in doing that."
$5,418 Still Owed
Poole said the firm still owes $5,418 from at least $25,000 in overpayments that occurred as far back as 1981 when attendance at the preschool and day-care facility turned out to be less than expected.
Pierce said he has not seen the audit results and isn't aware of any mismanagement, although he conceded that the firm has had some problems filing timely financial reports. He acknowledged that the Indian Centers is "probably about a month late" in repaying some state money.
In response to the allegation that the Indian Centers has mismanaged funds, Pierce said: "I don't think that's very correct. You're always having some adjustment in the way your program is run. The state wants everything like a corporation."
The 51-year-old Pierce, an Onondaga Indian, said the Maywood and Bell Gardens programs never served as many American Indians as he would have liked. Only 10% of the children enrolled are Indians--the rest are Latino, he said. Now that the firm is being released from its state contract, he said, Indian Centers will probably stick to running its job-training facilities.
Times staff writer Scott Harris contributed to this report.