Shakeup At Casa Otonal

After a federal audit found Casa Otonal had misused $250,000, the Latino senior center fired its longtime director. On Monday, a Boston-based management firm will step in to run the organization.

Seniors living at the 104-unit housing complex on Sylvan Avenue in the Hill learned the news Wednesday.

The organization was founded three decades ago in part by Pat McCann-Viseppo, who has served for 17 years as the director.

Then, two weeks ago, McCann-Viseppo was told she had just one month left as head of Casa Otonal. The Board of Directors has hired WinnCompanies, a management firm in Boston, to step in and take over running Casa.

Ricardo Sandoval, a member of Casa’s board of directors, said a manager from Winn will start on Monday. Outside management was necessary to improve the logistics of the organization and ensure all federal Department of Housing and Urban Development (HUD) regulations are met, Sandoval said.

All of the irregularities found by HUD audit were unintentional errors, Sandoval said. The audit report reflects that, he said. There is no suggestion that McCann-Viseppo or anyone else acted unethically or were engaged in any kind of legal wrongdoing.

Read the report here.

McCann-Viseppo (at right in above photo) declined to comment for this story. She has struggled with health problems over the past year that have interfered with her ability to work.

Casa board member Sandoval said on Thursday that McCann-Viseppo will be with Casa Otonal for two more weeks. He declined to comment on what her role will be after that point.

Winn will manage ​“all the logistical details” including accounting, rents, and paying the staff.

“It’s like getting an accountant to do your taxes,” he said.

The new manager ​“has a lot of expertise with the technical side,” Sandoval said. An assistant manager will be hired in the near future, he said.

Current staff members will be given the option to stay on, Sandoval said. ​“Everything should continue as normal.”

HUD has been working closely on the transition with Casa Otonal, he said. He declined to say if HUD had recommended hiring an management company. ​“They thought things could be done better,” he said.

Sandoval would not comment on why specifically the board had decided to fire McCann-Viseppo.

“Our main focus is to provide services for the Hill neighborhood,” Sandoval said. Bringing in Winn will ensure logistics are taken care of and the quality of services remains the same. ​“We’re very excited about that,” he said.

HUD Report

Casa Otonal comprises several components. The main one is the residential housing unit at 135 Sylvan Ave. This project receives funding from HUD. Services there are provided by an organization called Casa Otonal, Inc., which also runs programs for seniors and kids. Both of these bodies are overseen by the non-profit Casa Otonal Housing Corporation, which shares the same board of directors as Casa Otonal, Inc.

On Aug 4., 2009, HUD issued a report of its audit of Casa Otonal Multifamily Housing Project, the building at 135 Sylvan Ave. The report found that the the project ​“was not properly managed in accordance with HUD regulations.” HUD found ​“questioned costs totaling $265,350.”

The report states that the Casa housing project transferred HUD funds — against regulations — to Casa Otonal, Inc. The report states, ​“Specifically, the owner made $236,439 in unauthorized loans/distributions to an affiliate, Casa Otonal, Inc.”

HUD further found a lack of proper record keeping, as well as other ​“ineligible,” ​“unsupported,” and ​“unreasonable” costs.” HUD found ​“a lack of written policies and procedures and the absence of a contract log, contracts, purchase orders, or related bidding or source selection evaluation documents. Later the project incurred $18,031 in ineligible costs, $8,748 in unsupported costs, and $2,132 in unreasonable costs.” 

The $2,132 in ​“unreasonable costs” was for ​“excessive cell phone charges related to minute overages and text messaging.”

The report says that between July 2005 and May 2009, Casa Otonal the housing project loaned a total of $376,846 to Casa Otonal, Inc. Most of the money was used to pay health insurance costs. During that same five-year stretch, Casa paid back $140,407 of the money, leaving $236,439 still owed.

“These costs were not eligible project costs and must be repaid to the project because the owner’s regulatory agreement with HUD clearly restricts the use of project funds to only project-related purposes,” the report states.

According to the report, the unauthorized payments continued even after HUD notified McCann-Viseppo about the practice. ​“The executive director did not explain why the project continued to pay for costs of the corporation and offered no plan for eliminating future unauthorized distributions other than to say that she would need to think about it and that the corporation might need to take out a line of credit.”

The HUD report states that Casa Otonal was not following proper bidding procedures when hiring contractors for goods and services. According to the report, McCann-Viseppo expressed ​“professional skepticism” about the bidding process. It was too expensive, she reportedly said. McCann preferred to do ​“what she referred to as ​‘comparison shopping,’” the report states.

Casa Otonal was not properly keeping track of hours spent by staff on HUD-related work, the report states. That was despite being told by an accounting firm that such tracking was necessary.

Board Response

In a letter dated July 29, 2009, Alicia Caraballo (at left in top photo), president of Casa’s board of directors, responded to the HUD audit report.

She said the director had been ordered to cease any ​“inter-company loans or disbursements.”

“Nevertheless, we wish to note that any and all loans and disbursements were used to operate programs and provide services that benefit that neighborhood in which we are located,” Caraballo wrote. ​“We feel that it is important to note that all the loans and/or disbursements were aimed at building a better community.”

Upon being informed by the HUD auditor, McCann-Viseppo did order that all disbursements stop, Caraballo wrote. ​“Shortly thereafter, Ms. McCann began to have a serious family problem that culminated in her having to take a five (5) week family leave starting in February, 2009 through early March, 2009, this unfortunately delayed her giving the business manager written instructions and resulted in her not providing sufficient oversight,” she wrote.

Caraballo agreed with the majority of HUD’s recommendations and promised to implement systems and oversight to address the problems.