CUDAHY — A city councilman said he will request a grand jury investigation into "the potential misuse of funds" by the Cudahy Social Service Agency, which distributes food and clothing to the needy.
Councilman John O. Robertson also said Tuesday that he will ask the city to select an organization to replace the Cudahy agency.
Robertson said he will submit his proposals Monday at the council meeting.
He said he would ask the grand jury to examine how the nonprofit agency spent city, county and federal funds.
Earlier this month, City Manager Gerald M. Caton suspended payments to the agency until a private audit is conducted. The city had authorized $50,000 in federal Community Development Block Grant money for the agency in the current fiscal year. The agency has received more than $130,000 in government money since fiscal year 1986-87, according to city officials.
Robertson said he will also ask the council to approve an outside audit of all agency funds, both private and public.
"We have no choice. We must act now. An earlier audit, which was only a review, showed that there was little or no control on expenditures of money," Robertson said in a letter that he plans to present to the council.
Robertson referred to a cursory audit by Diehl Evans & Co. of Santa Ana that stated the agency did not have "underlying documentation to support the cash receipts" and there seemed to be no "control or review process" for monitoring spending. The report was given to the city Aug. 31.
Robertson said he will ask the council to select one of two social service agencies that have submitted proposals to provide similar services to the city's needy at less cost.
The Cudahy agency's executive director, James Graham, said the financial records are in order. "I have no problem with (investigations). I expected as much," he said.
Graham said he was upset, however, that Robertson was asking for the agency to be replaced. "We are doing a good job," he said.
Proposals were submitted to the city earlier this month by the Human Services Assn. of Bell Gardens and the Welfare Action, Steelworkers Oldtimers Foundation in Bell. The Human Services contract would cost the city $22,600 and the Steelworkers contract asked for $24,000, according to city records.
"The required investigation, audits and self-examination could take months," Robertson said in the letter. "Unless we act quickly, with another agency, our people will not be provided with needed services."
Caton said the Steelworkers Foundation provided food for senior citizens in the Cudahy area before the Social Service Agency was set up last December. The Human Services organization provides low-cost hot meals for seniors in the city.
The other agencies' proposals were on the council agenda Sept. 6, but were not acted on because of a potential conflict of interest on the council, Caton said.
Robertson and Mayor Bill Colon were directors of the Social Service Agency, and had been told by the city attorney that they should not vote on agency matters. Robertson last week resigned as vice chairman and director of the agency. He said in a Sept. 19 letter of resignation that he was concerned with the direction the agency has been taking, but did not elaborate.
Graham said Robertson was resigning "so he could vote (against the agency). Somehow, he feels it discredits the agency."
Colon, a staunch supporter of the agency, could not be reached for comment. Councilmen Tom Thurman and Joe Graffio have stated in the past that they would support an audit of the agency. They could not be reached for comment on Robertson's other proposals.
Food for 950 Families
Besides operating a food and clothing distribution program, the Cudahy agency provides free space for other social service agencies. Graham said the agency provides free food to about 950 families and clothes to about 350 families monthly, as well as drug counseling and job-placement information. The agency operates in a building that the city Redevelopment Agency owns at Elizabeth Street and Otis Avenue.
The agency owes the Redevelopment Agency more than $6,000 in back rent. Recently, Southern California Edison Co. threatened to shut off electricity unless the agency paid a bill of $2,300.
Graham said half of the bill was paid Thursday with money from a private donor. He said he would not disclose the donor's name.
Graham said he would continue to try to raise funds through private donations to keep the organization open.