September 16, 2015; 6News (Lawrence, KS)
Until recently, the 32-year-old mayor of Lawrence, Kansas, was also the executive director of Just Food, a local food bank. Then, in mid-August, he resigned both positions after it was revealed that the organization had not paid $60,000 in federal and state taxes. Now, it appears that Jeremy Farmer also took $50,000 in unauthorized compensation. During this period of time, Farmer had, without the board’s knowledge, dismissed the organization’s accountants; he then reportedly created fraudulent financials for the board.
A little more than a month after Farmer’s resignation, Nancy Thellman, Douglas County commissioner and a member of the Just Food board of directors, published a mea culpa in the local paper. She starts by saying that she counted Farmer not just as a colleague but a friend, but as regular readers know, fraud is often perpetrated by the least likely suspects.
We wanted to reprint part of the piece that Thellman wrote for the Lawrence Journal-World because it may help you remember to be more attentive as a board member, even when you would swear by the integrity of your executive.
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I know many in the community are sure a different board would have managed better, perhaps averted this disaster, and I am in no position to argue against that criticism credibly. But the truth is, when the executive director of an agency has made what appears to be a deliberate and determined effort to hide financial information and divert funds for their own personal gain, it is difficult for any board to succeed.
Regardless, our Just Food board owns this mess—the good, the bad, and the ugly—because Jeremy is gone. We are doing our level best to fix Just Food, meet our IRS tax obligation, and regain your trust. We will right-size the organization, find savings everywhere we can and, if the community will support us, Just Food will get past this crisis and continue to provide good food to thousands of residents in Douglas County who rely on us, in part, for their daily bread.
Among the steps that the board is now putting in place to stay afloat and out of bankruptcy are the following:
- While strong policies were already in place, it is clear they didn’t work. Even stronger policies will be adopted and married to a highly sensitized board demanding full accountability. You can be sure, now, that every donation lands where it belongs at Just Food and every dollar is accounted for. Period.
- We’re cleaning up the facility. On Monday, with the help of faithful volunteers and staff, we spent the entire day deep cleaning. Inside and out, we are making progress toward a fresh start.
- We will continue to work with the folks we’ve enlisted to help us through this tough time: our lawyers, Dan and Pat Watkins; our accountant, The McFadden Group; our auditor, Summers Spencer & Company; our non-profit board development consultant, Becky Price and, of course, our community partners. We are all working together to make sure the Just Food board takes the necessary legal, administrative and internal actions to become a better agency, accountable to our donors, for sure, and sustainable for the future. And for those who see dollar signs after every one of these consultants’ names, please know that an enormous amount of their time and service is provided to us pro bono or at greatly reduced cost. That’s a testament to the importance they place on the future of Just Food, and for their expertise and generosity in a time of need we are forever grateful.
This author has some knowledge of the environment for social services in Lawrence, Kansas, and though my experience was thirty-plus years ago, it also involved saving an agency that, in our case, had been precipitously defunded in the midst of a political attack on our work. That experience and others had while I worked at that agency convinced me of the will of the people of Lawrence and Douglas County to support the right response to crises such as this. I wish the very best to this board, but let it be a warning to others: An outside accounting firm that is, in the end, answerable to the board is worth its weight in gold.—Ruth McCambridge