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To all CAO employees, Since our local newspaper continues to publish stories and editorials about the CAO, I decided it was time to again reach out to you and communicate about what’s really been happening, and how we feel about it. Foremost, no one at any federal or state agency has contacted anyone at CAO about “investigating” the agency. The reporters involved, in an effort to boast their relevance, continue to say otherwise. We say we will of course cooperate with any legitimate inquiry, we’ve done nothing wrong. To that point, our last HHS/Head Start review was conducted in February, 2019. This is the finding of the agency that funds the Head Start program for the most recent period. There were no financial findings of any kind in the review. Attached is the summary of the review, which states “based on the information gathered during our review, we have closed previously identified findings. Accordingly, no corrective action is required at this time.” If the CAO is so “under investigation,” why won’t the Buffalo News print this? It is an inconvenient truth and they don’t care about the truth. They cling to their fake narrative despite every fact contradicting it we show them. We plan to share this news with all other media, and hopefully they will report it. The reporters make up facts and recharacterizations as they go and pay scant attention to the detailed, fact-based rebuttals we give them, the latest of which is included in this letter. You may draw your own conclusions about their motivations. If you have not, please read the three stories in The Challenger posted on our web site. But as an example of how shifty the newspaper is, please recall that the first story said board members were removed to block a contracted forensic audit. The latest story, after we’ve told them for six weeks no forensic audit ever started and therefore none stopped – along with giving them a letter saying the same thing from the accounting firm’s partner – says, oops, a “review” of one part of one federal program was the target, after an illegally signed “engagement” letter. Now, HHS itself finished its own review of our Head Start and we graded well. This sort of thing is never going to stop, and we don’t seem to have a way to get truth in front of the same audience the reporters keep lying to. In Thursday’s editorial titled, “Do the audit,” the assertion is that the CAO and I are refusing to do an independent audit of the agency’s Head Start and other programs. The News seems incapable of understanding that the CAO board had already hired an independent auditor whose work was presented to the board on Jan. 25th, accepted by the board, filed with all of the responsible authorities and published on our website in March.


The News seems incapable of comprehending that an audit for the most recent fiscal year is already underway, authorized by the same board that existed in October 2018, after the appropriate RFP process. No RFP process was included in the effort to hire the second accounting firm, another fact the newspaper either buries in the 30th paragraph or doesn’t mention at all. Why would the same board hire another auditor to do what it already hired an independent auditor to do – at double the cost? The assertion by the News that an engagement letter was sent by another audit firm merely shows the depth of the conniving being undertaken by two former board members. The CAO provided the News with all of the board meeting minutes from every regular meeting. Clearly, if the board had authorized the hiring of a second independent auditing firm, there would have been discussion of it in board or finance committee meeting minutes during the period between September and January. But, the factual record demonstrates that there had been no board discussion about financial improprieties, nor poor performance by the CEO, nor hiring a second independent auditor. The News refuses to explain why the expressed will of the entire board does not count, but the will of a couple of board members acting in secret, and in an obvious violation of the bylaws and the rights of every other board member, does. The News and its surrogates continue to imply that I knew of the contract to hire a second auditor at the time Jenine Dunn and Jennifer Shank deceived the second audit firm, CTBK, into thinking they had a valid contract with the CAO. In fact, I learned of this contract from the Buffalo News. Our attorneys investigated and discovered what Dunn and Shank had attempted, and CTBK apologized for being duped by them. Just as they used illegal secret meetings, deliberate manipulation of the board roster through illegal terminations of board members, and dishonest back-door tactics to attempt to terminate my employment and take over the agency, they used similar immoral, unethical, and illegal tactics to try to appoint a second independent auditor to do what was already being done. They are now the News’ primary sources. No consultation or permission of other board members, no clearance by management that funds were available, and in a direct violation of their duties to the CAO and its governing board. And, all of the above happened without reporting anything to DOS or HHS. In fact, they intentionally excluded DOS from the secret illegal meetings and then Dunn lied to fellow board members, saying a DOS official directed her illegal action. The News refuses to see its biases or admit its errors, even after receiving on March 26 a letter from the CTBK partner in charge at the second auditing firm stating that no forensic audit of CAO finances and operations was started, so none was halted by removing the board members who had acted illegally. Please see our rebuttal points on this.


The CAO does not hire its friends to do its annual independent audit. It publishes an RFP, accepts bids, and chooses the most responsible low bidder. It then submits all finance materials, provides office space for conducting the audit work and responds to any query made by the independent auditors. This is an open process approved by the board. It’s not done by the underhanded trickery Dunn and Shank perpetrated on everyone. As to any “chaos” at the CAO, such that it exists, it is being deliberately caused by the Buffalo News and its surrogates for reasons clearly unrelated to telling the truth. The Department of Health and Human Services, which funds our Head Start program, conducts reviews of our fiscal and programmatic operations routinely. The Department of State has been kept apprised every step of the way on what transpired at the CAO, as it has for years. It has been since late-October when management and other board members stopped the secret illegal meetings orchestrated by Dunn and Shank, stopped the illegal termination and disenfranchisement of board members Dunn falsely claimed she was ordered to do by DOS, and the other illegal and incompetent behavior she was engaging in. Prior to that, the deliberate concealment and illegal acts by Dunn and Shank and their running the board into a non-functional mess threatened the agency. Management, according to all objective data and reports by the auditor hired by the board, the DOS, HHS, and every other source, was doing fine. Clearly, that’s a story the Buffalo News refuses to tell because they are too busy printing everything they are told by Dunn and Shank without any interest in the facts. The Buffalo News must cease its campaign of malicious and potentially libelous smearing of the CAO. Now the reporters are asking questions of the state comptroller’s office, because one of our board members happens to work there. Of course he had appropriate permission to serve as a volunteer, community-based CAO board member. These reporters are seeking to interview former employees, some of whom have personal axes to grind against the CAO. And, the reporters have told us they plan to, and I quote, “publish a number of stories about CAO matters over the coming days, weeks and months.” I suppose this is supposed to threaten or scare us? The communities the CAO serve know the depth of our commitment and strength of our services. They are watching too, as I know all of you are, as well. If you have concerns or questions, please contact me. Thanks, Nate


Attachment


Mr. Spina and Ms. Pasciak, We seem to at least be getting some of our facts into your stories, although you keep trying to "never mind" them away. You continue to confer credibility on people who tried to hijack the CAO. You also continue to manipulate our facts to force your narrative. It remains unethical. I will try to be brief. 1. You again mix facts to enforce your conclusions. A review -- the engagement letter never calls it an audit -- of small aspects of one CAO program might indeed have cost $10,000. But that's not what you have called it all along. You wrote multiple times, starting Feb. 17, that a full forensic audit of finances and operations was started and halted. A full-on, complete audit of all finances and operations, as you characterized it, at an agency as large as the CAO, would absolutely cost in the six figures. Ask any accounting firm in town. You are either ignorant of what you assert, or willfully manipulative of the facts to bolster your shaky grasp of them. But more damning is that without any notice to readers, you've now switched your narrative, which for weeks claimed a full forensic audit was stopped, to saying a review of just one part of one program was stopped. Yet you make no note of this critical shift of fact. It amounts to a vast rolling back of your own assertions. 2. Further, how can you say in your first paragraph that a "special" accounting firm "halted work?" What's special about it? And, in the same story, you have the partner in charge telling the public that no audit started so none was stopped, and you don't see how that undermines your whole narrative? Kelly Besaw's letter does not "echo" my version of events, it proves them to be true, and fully contradicts your sources' desperate pleadings. The CAO says no forensic audit was authorized; the partner at CTBK says none was authorized; the News is the only one left arguing otherwise. 3. How can you confer credibility on a junior accountant and call his firm "special" and then all but dismiss what the named managing partner says is true? For the sake of illustration, if Besaw's letter said, "we were knee-deep in our CAO audit when we were prevented from doing the work," that would be in your first paragraph screaming out an authoritative executive endorsement of your narrative. Why then, when he endorses our facts, is it relegated to the 27th paragraph? I believe that's called "an inconvenient truth." Unethical. 4. Your own accounts show that the Board of Directors of the CAO never voted on or even discussed any additional or second review of the CAO’s financial records and procedures since an independent audit was already underway, by, readers are to assume, a "not special" accounting firm? Yet you cling to the reverse. 5. You write a long convoluted, nonsense article, trying to establish the legitimacy of this Head Start review Dunn and Shank tried to get started without board authorization. If you had any integrity, your story would have been about two board members attempting to create a contract obligating the CAO without the CAO’s authorization. Just because Dunn and Shank were on the board, does not give them the right to create obligations to be paid by the agency. Mr. Spina, please go out and buy a new $41,000 car and charge it to the News. I'm sure you'll be reimbursed. And, in another Shank/Dunn misrepresentation to you, that you swallowed without fact checking, the net for the fundraising luncheon was a little more than $12,000, not the $41,000 they claimed. That was the gross. Worried about your sources trustworthiness at all? 6. The assertion that they intended for the obligation to be paid out of the funds raised from our annual luncheon, or unrestricted non-federal funds, is ridiculous. Whatever they imagined their intended source of payment was, it would still have to be authorized by the board, not by two members or some minority faction of the board. And, again this is why your story is so much claptrap. Why did you not ask me in your questions Tuesday if such a payment option was even


7.

8.

9.

10.

possible? You know why. Because I would have shot it down in a New York minute and you would have lost the purported justification for how Dunn and Shank said they could have paid for a forensic audit. Again, unethical journalism. Knowing -- or it was at least incumbent upon you to have known it -- the rationale was ridiculous, you didn't give me a chance to say so. You pulled a rabbit out of your hat and didn't let me say that everyone can see it's a chicken. Your attempt to assert an audit was underway because someone working for CTBK started trying to assemble some financial data is more of your deliberate deceit. Since the “engagement” of CTBK was not authorized by the board, no action taken by CTBK, if any, has any effect. The CAO would never interact with CTBK without a legal agreement, which CTBK stated to you outright never existed. Our finance department never spoke to anyone from CTBK. Wasn't started. Wasn't stopped. And, we can now add, based on your subtle, hidden correction, wasn't a forensic audit after all. Perhaps if you had the integrity that CTBK has shown in admitting the facts of its junior account's missteps, you would not continue writing such spurious nonsense. Read the minutes attached of the Sept. 10, 2018 board meeting. There is nothing there reflecting any discussion about a second audit, or of any finance concerns at all. Attached also is the Nov. 5 board meeting minutes. If the “board” had voted in October to create a second audit or to agree to any additional accounting services at all, there would be some reference to it in the minutes of that regularly scheduled meeting. Despite your desperate desire to shore up the lies of your main sources, Dunn and Shank are not "the board" of the CAO and never were. They cannot speak for the board without the board’s authorization, and they cannot obligate the funds of the CAO without the board’s authorization. You must see that these are basic rules of non-profit operations, yet you consistently turn your back on those realities. The CAO Bylaws are typical and were blatantly violated by Dunn and Shank on this issue and many others we have repeatedly pointed out to you which you continue to ignore: “No officers, agents or employees of the Corporation, alone or with others, have the power to make any checks, notes, drafts or other negotiable instruments in the name of the Corporation or to bind the Corporation thereby . . . .” Article VII, Section 1. Holding secret meetings among themselves, with no notice to the board, and no record of the meeting or what took place, intentionally excluding DOS regulators, and the other things we have repeatedly detailed demonstrates the unworthiness of their conduct, their credibility and yours. There was no legal meeting of the board on Oct. 4, 2018 (or at any other times in October before Oct. 19). Dunn, even as a board chairperson, one cannot call a meeting of the board without notice to all board members – and for CAO, with notice to the DOS. If such a meeting were held on Oct. 4, it excluded several board members, and, suffered from that fatal deficiency and many others as we have pointed out to you. There is not even evidence of a quorum being present. There are also no minutes of such a meeting, which would have to have been voted on by the board, confirming such a meeting took place and what occurred at such a meeting. Why don't you ask your sources why not? Ask them to produce the meeting minutes, meeting notices, or any of the other required evidence of a legitimate meeting. They cannot, yet you would never report that.

You have written yourselves into a rabbit hole. You have alienated large sections of the Buffalo community with your unethical antics. Your stubbornness in the face of facts is not becoming. And, surely you see that other than a handful of people, like us, no one can follow this twisted narrative you've woven, altered, confused, backtracked upon, corrected and revised at the behest of two snake oil salespeople. Is it a forensic audit of the CAO, or, oops, never mind what we wrote for six weeks, just a review of one part of one of its programs? Is a junior accountant more credible than the partner in


charge whose name is on the door of the "special" accounting firm? You keep trying to have things both ways and you are embarrassing yourselves. As for your knee-jerk editorial this morning, please have someone on the editorial board read the legitimate, board-authorized, RFP'd Szymkowiak audit posted on the CAO web site since March 11. https://caowny.org/cao-releases-latest-outside-independentaudit/ You could have saved a lot of time, effort and space. L. Nathan Hare CEO

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Letter to CAO Employees – HHS Review and News Rebuttal 4-15-19  

Letter to CAO Employees – HHS Review and News Rebuttal 4-15-19  

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