Thousands Missing From Sandy Hook Charity Fund: Audit

NEWTOWN, CT —Questions remain after a state audit report found that a non-profit in charge of distributing funds from the Sandy Hook Workers Assistance Program couldn’t account for tens of thousands of dollars. Republican legislators said they would introduce legislation to tighten loopholes to prevent future problems.

The SHWAP fund is meant to help with mental health needs for educators, law enforcement and related personnel who were at or responded to the Sandy Hook Elementary School shooting in December 2012. Private donations were administered through the state Office of Victim Services through mid-2015 and the office was then tasked with distributing remaining money to charities who would oversee the program.

The United Labor Agency, the charitable arm of Connecticut AFL-CIO was chosen to oversee most and eventually all of the remaining funds.

ULA distributed $6,323 of the funds to five eligible recipients and charged $5,791 to cover administrative costs, according to the audit report. A balance of $103,713 should have been available for future distributions, however, the ULA’s net assets haved dipped over time from $188,420 in June 2014 to a deficit of nearly $21,000 in June 2018 and further deterioration into 2019.

Its cash balance as of Sept. 30, 2019 was $41,977.

“Based on these distributions, ULA should have $103,713 on hand and available for future distributions. However, ULA did not have these funds available,” auditors said in the report.

Auditors couldn’t conclude where the money ended up or what it was used for because SHWAP funds were commingled with other accounts.

“... it appears that as a result of financial difficulties, ULA may have used the SHWAP funds for other purposes,” auditors said.

The ULA has put together funds to make the SHWAP account whole again, said Sal Luciano, president of ULA, according to CT News Junkie. ULA has also committed to keeping the money in a separate account as suggested in the audit report.

ULA’s board also decided to hire an independent attorney to investigate how the money was used.

The audit report found that ULA paid out all claims that were made, but State Rep. Mitch Bolinsky (R-Newtown) said that wasn’t true and that they would ask the state audit office to dig deeper into the situation.

Republican legislators held a press conference Thursday, a day after they received the results of the report from the Auditors of Public Accounts. Bolinsky said he had received a communication in February 2019 from someone concerned that money from the account may be missing because two PTSD claims for first responders were denied. He and others reached out to the State Attorney General Office. The office concluded after seven months that the issue was resolved to their satisfaction, Bolinsky said.

Bolinsky and House Republican leader Themis Klarides weren’t satisfied with the answer and decided to approach the state audit office with a request for them to look into the situation.

“Long story short the Attorney General’s Office after seven months said this was resolved to their satisfaction that there was no wrongdoing here,” Klarides said, adding that was despite thousands of dollars being unaccounted.

State Attorney General William Tong said in a statement that a state trooper tried to apply for compensation and was denied because a memorandum of understanding between ULA and OVS stated funds were to be used exclusively for school personnel. Bolinsky contacted Tong's office about the matter. The Attorney General office then redrafted an MOU to reflect donor intent that restored police access to the fund.

The Attorney General's office first learned about commingled funds when the audit report was released Dec. 4 and is reviewing it for potential further action.

"The Auditor's report has revealed very serious problems that require thorough review and investigation," Tong said in a statement. "At a minimum, we need to understand how any comingled funds were spent, what procedures are in place now to ensure protection of the funds going forward, and whether it makes sense to designate a new entity to safely maintain these funds and provide much needed transparency."

"This is not a political issue. I will not allow this and the Sandy Hook community to be used mere days from the anniversary of the most horrific tragedy our state has endured in my lifetime," he said. "I look forward to working collaboratively towards a solution that protects both donor intent, and supports the ongoing needs of our courageous Sandy Hook educators and police officers."

State auditors recommend that going forward similar funds created by the state should have specific language about how funds are distributed and that excess funds should be prorated and returned to donors. They also recommended that future state legislation and contracts should offer a greater level of state oversight when money is transferred from a state fund into a non-profit.