The Providence Plan

“On july 26, 2016, the providence plan learned that it had suffered a fraudulent conversion of funds by the individual who served as the providence plan's director of finance and administration from 2009 to july 26, 2016. The total amount of funds fraudulently converted from the providence plan to the former director of finance and administration's personal use between september 22, 2009, and july 15, 2016, was $741,100, resulting in a significant diversion of the providence plan's assets. As a result of learning this information, several corrective action steps were taken by providence plan management and the board. The former director of finance and administration was let go immediately, a forensic audit was commissioned immediately, and a review of all internal controls was commenced with corrective actions taken as issues were identified. The organization quantified and reported the loss incurred during fiscal year ended june 30, 2016 as a result of a forensic audit. The loss on embezzlement for the fiscal year ended june 30, 2016, was $327,407,and was reported in part ix, line 24a of the 2015 form 990. In addition, accrued expenses include the amount due back to donors and grantors of $194,343 were reported in part x, line 17 of the 2015 form 990. The loss on embezzlement for the fiscal year ended june 30, 2017, is 17,848, and is included on part ix, line 24e of the 2016 form 990. In addition, accrued expenses, part x, line 17, include the amount due back to donors and grantors of $139,816.”

“The form 990 is prepared by the external accountants and reviewed by managment. Once all are satisfied with the form, it is finalized and a copy is sent to all board members at the subsequent board meeting. The board is asked if they have any questions or comments and a general review of the form is conducted by management. Revisions, corrections, etc are made as necessary. Subsequent to this meeting, the form is submitted to the irs.”

“Each year the organizations conflict of interest policy is provided to all officers, directors and key employees. These people are asked to review the policy and sign a statement indicating that they understand the policy and have reported all potential conflicts during the past year in accordance with the policy and will report all potential conflicts the coming year. All potential conflicts are evaluated by the board to determine if a conflict actually exists. In those instances where the potential transaction is a conflict, the board examines the transaction and a vote is taken (with those involved recusing themselves) as to whether the organization will enter into the transaction.”

“Starting in september 2016, providence plan's board of directors entered into a series of short term (3-4 month) contracts with an executive director to guide the transition of programs and services to new organizational homes, ensure full compliance with all funder requirements, and assist with the wind down of the organization. The board approved these contracts, based on performance and results, in executive sessions of board meetings. As such, while no performance appraisal was completed during fy17, the de facto appraisal was the determination to renew the contract with the executive director at the time of the expiration of each agreement.”

“The organization makes it governing documents (articles of incorporation and by-laws), its conflict of interest policy and financial statements available upon request. The organization will mail copies upon request or provide copies to those who come to the administration offices during normal business hours. The organization charges for the copies in accordance with irs regulations.”

“During the fiscal year, providence plan ceased conducting program services. Two of its four programs became independent nonprofit organizations and the remaining programs became programs of institutions of higher education. In all cases, the program assets were transferred in accordance with legal agreements and each of the program's services and missions did not change. Youthbuild providence and building futures each formed their own separate nonprofit organizations. Providence talks and ready to learn providence became part of roger williams university and dataspark joined the university of rhode island.”

“Consultants: program service expenses 1,469,443. Management and general expenses 18,194. Fundraising expenses 0. Total expenses 1,487,637. Subcontractors: program service expenses 140,601. Management and general expenses 25,069. Fundraising expenses 0. Total expenses 165,670. Other : program service expenses 16,300. Management and general expenses 0. Fundraising expenses 0. Total expenses 16,300.”

“The board of directors decided to forgo an audit the organization's financial statements for the year ended 6/30/17 because substantially all of its programs were transferred to other organizations during the year ended 6/30/17.”

“The organization did not undergo an audit of expenditures of federal awards because all programs with such expenditures were transferred to other organizations.”

“As disclosed in response to form 990 part vi, question #5, on july 26, 2016, the providence plan learned that it had suffered a fraudulent conversion of funds by the individual who served as the providence plan's director of finance and administration from 2009 to july 26, 2016. The loss on embezzlement for the fiscal year ended june 30, 2017, is $17,848, and is included on part ix, line 24e of the 2016 form 990. In addition, accrued expenses include the amount due back to donors and grantors of $139,816.”