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Concerns for NETO grow as investigations continue

Concerns continue to grow over possible fraud and operation of the Northeast Texas Opportunities, Inc. (NETO). The concern was so great that two NETO board members resigned at last Wednesday’s meeting.

According to The Daily Tribune in Mount Pleasant, “an audit released in 2014 revealed that nearly three-quarters of a million dollars had been embezzled by former employees.” This is all still under investigation by both the local law enforcement and the Federal Bureau of Investigation.

Resigning by letter was low-income sector board member Gene Stump, and Franklin County Commissioner Larkin Jumper, who was appointed to the public sector of the board just two months ago, resigned his position at the end of the meeting.

“Jumper stated in his resignation that he believes the NETO board of directors is in violation of its bylaws and possibly in violation of the Open Meetings Act. Jumper said he was referring to decisions being made by an executive committee and not being brought back to the full board for ratification,” stated the Tribune. It was stated Commissioner Jumper will be forwarding any further concerns to the appropriate agencies for investigation. He was particularly perplexed on how the debt seemed to be increasing each time NETO Executive Director Beverly Logan reported it. She replied penalties and interest are still accruing on the debt.

Logan said, after the meeting, that the original figures reported in the 2013 audit were incorrect, and that corrected figures would be available in the 2014 forensic audit, which will be released June 10.

“I just can’t see how three auditors could miss so much money,” said NETO low-income sector Peggy Durham, following the meeting. “There will be lots of changes. I’m not sure how it will all work out. I go to bed wondering how all this can be solved. It has caused a ripple-effect.”

Jumper questioned the Board’s authority to approve the loan from First National Bank in Mount Vernon that was taken to make the initial payment to the IRS. He said that he does not see how the board could have procured a loan using the NETO Head Start properties in both Mount Vernon and Emory as collateral, when the property in Mount Vernon belongs to Mount Vernon ISD.

Logan said that the Mount Vernon property, 826 Miller St., is owned by Mount Vernon ISD, but is leased to NETO on a 99-year lease. She said it is very common for banks to use these “lifetime leases” as collateral. She also said that the bank did contact the school district and that the loan was made with the full approval of Mount Vernon ISD.

John Kaufman, superintendent of Mount Vernon ISD, who was traveling Wednesday, responded by email. He said no one had reached out to the district, and that he was disturbed the agency would take the action without consulting him.

Hopkins County Judge Robert Newsom requested to be on the NETO Board. Logan told Judge Newsom that in order to be on the board, the directors would have to appoint and approve him to the position. Board President Morris Harville also appointed a board finance committee consisting of three board members: Ted Carrington, Rains County Commissioner Mike Willis, and Don Patterson. Patterson declined a position on the committee.

The board then called an executive session to discuss and consider possible action on a transportation agreement between the Ark-Tex Council of Governments (ATCOG) and NETO.

“This was strictly a settlement agreement to which we opted to just call it even,” said Ark-Tex Council of Governments Executive Director Chris Brown on the $1,000 owed to them from NETO. He noted ATCOG parted ties with NETO last June when his agency took over the TRAX transportation and meals.

In another matter Logan explained a bill, just over $43,000, is being handled is one of several that allegedly had a signed personal guarantee by her. She said not only was her signature forged, but her personal information had been used. NETO and Logan are currently named in a lawsuit by Kwik Check Food Stores, Inc. Logan said this is the lawsuit for the unpaid gas and fuel bill.

Brenda Fountain, the program director for the utilities assistance program, said there are currently six households being served in Hopkins County, but that she expected that number to increase as utility bill costs increased. Denise Trantham, the nutrition program director, responded that 1,740 meals had been served in Hopkins County in the month of April.

Overall, the nutrition program delivered 7,941 meals in six counties last month, including 572 in Delta County, 622 in Franklin County, 305 in Rains County, 3,215 in Red River County and 1,487 in Titus County.  NETO, Inc. serves Delta, Franklin, Hopkins, Lamar, Morris, Rains, Red River and Titus. The 501(c) (3) non-profit Community Action Agency serves the needs of the elderly, low income, and handicapped in the eight county regions as well as Head Start program funding.

Annette White, staff writer for The Daily Tribune of Mount Pleasant contributed to the article.

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