Over the last four years and without the city's knowledge, the Somerville Council on Aging deposited and administered more than $677,000 paid by senior citizens for city-sponsored trips, programs, and services into the bank account of a private nonprofit, bypassing city oversight and accounting, according to an independent audit. (See copy here.)
The nonprofit, called Future Friends of the Somerville Council on Aging, was established in December 2006, and since had acted as an unsupervised revolving fund used to pay for a "significant" portion of the council's programming, according to the audit, completed in April, a copy of which was released this week.
The council's executive director, Cindy L. Hickey, was largely responsible for writing hundreds of deposits and payments out of the Future Friends account, in a "repetitive and deliberate circumvention" of city accounting policy and state municipal finance law, according to the report.
"The money should have flowed through the city's treasury department," said City Solicitor Francis X. Wright Jr. in a phone interview.
The auditors, who interviewed more than a dozen staffers at the Council on Aging, including Hickey, and directors of the Future Friends group, found that Hickey used the nonprofit to expedite the receipt and payment process for organizing trips and parties for Somerville seniors, according to Wright, who echoing the report's findings.
"In an effort to better serve the seniors," Wright said, "there was a decision made, unbeknownst to myself or the mayor or anyone at City Hall that I'm aware of, that it would be more efficient that money would flow through this Future Friends account."
Hickey, who was placed on paid administrative leave by Mayor Joseph A. Curtatone in January when the city was notified of the situation by someone at the Future Friends group, did not personally enrich herself, the audit found.
Hickey returned to work Aug. 1, said Jackie Rossetti, city spokeswoman. Wright said officials have excluded the Future Friends from dealing with the Council on Aging or from holding senior citizen cash.
Other questionable practices were cited in the four-page report, including:
+The "common practice" of retaining cash collected for Council events for use later to pay for goods, services, and expenses.
+Daily collection by Hickey of cash revenue earned at a food cart installed at the Holland Street Senior Center in 2010.
+Reimbursements paid in cash for programs and services from funds collected by seniors, the total amount of which "could not be quantified."
+Missing documentation for $66,402.96 worth of checks paid to frequent vendors used by the Council on Aging, including cruise lines, hotels, restaurants, and tour companies.
+54 checks, totaling $9,679.84, for reimbursement of Council on Aging expenses, to "family members, [Future Friends] board members, and Ms. Hickey." (Most were dually recorded as expenses and included invoices, the audit notes.)
+41 checks, totaling $9,215.33, that may not have been related to Council on Aging activities, including funeral arrangements, home care services, plants and flowers, gifts for volunteers, and a down payment for an apartment.
+Expenditures made unilaterally worth more than $5,000, which normally would fall under state law regulating how municipalities dole out contracts for exclusive work.
+The purchase of alcohol for a senior's New Year's Eve party and prom, in violation of a state law forbidding municipalities from buying liquor, wines, or cigars.
+Council on Aging program fees that exceeded the cost of the event, which "resulted in a significant amount of cash being on hand at any particular time," which was used to pay for other Council costs and activities.