Warning: don't let any of the following happen to your nonprofit!
The amount of nonprofit drama described in this Rio Grande Sun article was too good for me to pass-up. The Northern New Mexico Regional Arts Center's acting exec and current board president (yup, board pres. is filling-in) has reported to the local law enforcement agency that the agency is missing $100,000. So far all signs point to the former exec. (so much for checks-and-balances).
But wait, the story does not end with a simple embezzlement and a board not knowing what was going on. No, there are actually two boards claiming authority. As I understand the story, the now fired exec managed the board elections (hm - no governance committee to do this?) and didn't like the results so nulled the first election and made some former officers the board. This is clearly a board out-of-control and not even knowing who is in-charge. But don't worry, someone has taken charge and locked the office until an audit takes place. Of course it won't take an audit to figure out that the money is gone but it certainly will make it official and perhaps find who, besides the former exec. is culpable, besides the board that is. Again, talk about board dysfunction! Here's the story.
Ex-Director Accused Of Embezzlement
Española Police Officer Idalee Lopez is looking into accusations that John Werenko, the Center’s former executive director, embezzled $100,000 from the organization, Española Police Department Public Information Officer Jeremy Apodaca said in a Monday telephone interview.
Gabriela Silva, acting executive director of the nonprofit and president of the Board of Directors, first reported the alleged embezzlement to the Española Police Department on Nov. 17, according to E-911 Dispatch Center logs.
The logs state Silva reported that Werenko forged checks and drained the Center’s bank account of approximately $47,000 — less than half the amount that Apodaca said was taken.
The alleged embezzlement occurred at the city-owned building at 702 E. Bond St., the logs state. Center officials lease the building from city officials and conduct free arts classes there.
Werenko’s former office at the Misión y Convento, on the Plaza de Española, contains numerous files documenting the Center’s finances over the years.
Board members changed the locks in August and agreed to leave everything inside untouched, until there is a formal audit of the Center’s finances.
The original Board has hired former district court judge Margaret Kegel, of Santa Fe, to gain access to the Center’s bank accounts, including two savings accounts, a checking account and an investment account.
Lopez is conducting interviews and gathering documents to write a report, Apodaca said, and they’re expected to be complete by Friday.
“She’s trying to take great care that all the bases are covered with this investigation, that way everything is handled properly,” he said.
Española Police Chief Raymond Romero said Lopez can discuss the investigation publicly, but she declined to do so, when reached for comment on Nov. 22.
An Inspection of Public Records Act request for the report has been pending since Nov. 22.
Depending on what conclusions Lopez draws, she will pass the investigation to one of the detectives in the city’s Criminal Investigations Division or the District Attorney’s office, Apodaca said.
The investigation comes two months after Silva and the Board fired Werenko for alleged insubordination and unanswered questions about the organization’s finances.
There are currently two Boards who question each other’s legal authority to represent the organization: one led by the original executive officers, Silva and Vice President Gregg Ferran, the other by Werenko and David Piñeda, who served on the original Board.
Even though Werenko confirmed in a June 26 email, that each original Board member won re-election, three weeks later, he reneged and threw out the results.
He called for a new vote and barred Silva and Ferran from reapplying. Piñeda alleged that they spoiled the vote.
The original Board members said Werenko overstepped his authority and planned to get rid of them at least six months before the June elections occurred, some time after a regular meeting in December 2016, when they voted out former treasurer Yvonne Velazco.
Werenko prohibited Silva and Treasurer Kathy Madrid from being the main signatories on the Center’s bank accounts and Velazco took their place.
Piñeda oversaw the election of a new Board in September. Members of the original Board alleged, in a complaint to the Charities Unit of the Consumer Protection Bureau, the new one is illegitimate.
The Bureau is a division of the New Mexico Office of the Attorney General.
“The executive director, John D. Werenko, utilized an opportune time in the nonprofit’s fiscal year end to declare himself as legally having complete authority over all agency actions and functions,” the complaint states. “He further declared a duly elected Board of Trustees as ‘invalid’ and subsequently created a Board of Trustees more sympathetic to his personal control.”
Werenko and his “alternative Board of Trustees” maintained control of all the Center’s bank accounts at the Los Alamos National Bank branch in Los Alamos, the complaint states.