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May 6, 2016; New York Times

We reserve judgment on this particular situation, but Ken Berger, former head of Charity Navigator, has been hired to save a city-funded arts nonprofit mired in financial and legal trouble that goes back years but has recently come to a head with a devastating attack on an executive attempting to expose financial irregularities.

With a name like Healing Arts Initiative and a mission of “making the arts accessible to all New Yorkers, especially individuals who are isolated and marginalized due to institutionalization, hospitalization, disability and illness, as well as at-risk youth in low-income neighborhoods,” one might imagine scenes very different from the strife both having been and currently being experienced by the charity’s staff and board.

Healing Arts recently fired its executive director, D. Alexandra Dyer, and its CFO, Frank Williams, for what the board alleges is withholding “critical financial and other information” from the board.  However, the real motivation is far different, according to Dyer and Williams who see themselves as whistleblowers.

Shortly after Dyer was hired last summer, she asked a staff accountant about a history of financial irregularities at the charity. Two days later, Dyer was assaulted with “a chemical drain cleaner containing lye.” The staff accountant, Kim Williams (no relation to the organization’s CFO) has been indicted for stealing more than $750,000 from Healing Arts, and two other people have been charged—one with conspiring with Ms. Williams and another for the lye attack on Dyer. Dyer was hospitalized for several months and returned to work in January, permanently disfigured.

Where was the board? Dyer and Williams allege the board was failing in its fiduciary duty and had even sued the board on behalf of the charity last month, seeking the board’s ouster. A former board member alleges she was unsuccessful in her attempts to investigate and strengthen financial controls after a 2011 theft involving duplicate payroll checks by a former employee—reminiscent of the current allegations against Kim Williams. In the wake of being fired, Dyer is considering filing a whistleblower lawsuit against Healing Arts Initiative.

The charity’s next Form 990 filing is due next week, and both city and state officials are among those eagerly awaiting the information contained in the return. Berger’s new role involves satisfying regulators, assuring continued city support for a $5 million arts organization, implementing appropriate policies, procedures, and financial controls, monitoring multiple lawsuits, and dealing with Healing Arts Initiative’s apparent board issues. Berger implored the staff to work with him through the crisis because it’s “[t]he only way to save this place.”—Michael Wyland