How the Sacramento NAACP spent the county’s COVID meals program money raises questions

Dual inquiries by national NAACP and Sacramento County officials following the suspected mismanagement of a county pandemic-era meals program by Greater Sacramento NAACP branch leaders are raising questions about whether county officials missed signs of potential self-dealing.

National NAACP officials are performing a forensic audit of its Greater Sacramento branch following allegations of financial misdeeds by chapter leaders; while county Department of Human Assistance officials have asked to see branch financial records related to the Dine-In 2 program which ended last June.

In a statement, national NAACP officials added that the organization “considers any allegations of financial impropriety to be of utmost importance.”

Suspended Greater Sacramento NAACP branch president Betty Williams and education chair Salena Pryor appear to have used their staffing and consulting firms to operate the Dine-In 2 program and paid themselves with county funds, records obtained by The Sacramento Bee show.

A forensic audit examines financial records for evidence of conflicts of interest or other malfeasance which can later be used in court or other legal proceedings. It is not known whether national NAACP officials plan to seek legal action.

Sacramento chapter treasurers Dafna Gauthier and Lorraine Moore, second vice president Velma Sykes and member Ken Nelson were also suspended in October for alleged financial misconduct after the officers were notified of “extensive” findings of potential impropriety stemming from the branch’s annual financial report in April.

“The NAACP will continue to ensure that all units are in compliance with the Association’s Bylaws and committed to advancing our mission,” officials at the civil rights organization’s Baltimore headquarters said in response to the revelations of financial mismanagement reported last week.

It was the officials’ first public comment since the local suspensions by NAACP president and CEO Derrick Johnson in October. A spokeswoman declined further comment and requests for an interview with organization officials.

Williams and Pryor did not respond to requests for comment.

County seeking branch contracts

The Dine-In 2 program, launched to get meals to the homes of struggling Sacramento County residents and support local restaurateurs during the height of the COVID crisis, ran from March 2022 through June 2023. The effort served nearly 58,000 meals as of April 2023, chapter officials said.

Sacramento County Department of Human Assistance officials in 2022 cited Greater Sacramento NAACP’s “specialized experience in providing outreach and education” as reason to award it the multi-million dollar program. But, branch contracts with the county and its Department of Human Assistance to run the food insecurity program had earlier been deemed “high risk,” county officials confirmed.

Officials at the county’s Department of Human Assistance notified Sacramento NAACP branch leaders in December that they want to see records related to the branch’s contracts for the program and outreach campaign, documents show.

The records outlined in the Dec. 18 letter include recent audited financial statements, invoice claims, transactions and other paperwork.

Conflict of interest provisions in the county’s contracts with the Greater Sacramento branch, signed by Williams, Department of Human Assistance director Ethan Dye and Sacramento County Counsel warn that a contractor’s “officers and employees shall not have a financial interest or acquire any financial interest, direct or indirect, in any business, property or source of income” that conflict with the contract, the documents state.

A county liaison who worked with the branch along with others at the county department were either unaware of or failed to flag the apparent conflicts of interest.

Williams’ and Pryor’s businesses were listed as executive officer and business compliance officer on invoices.

The businesses were not identified as being owned by either of the two branch officers, but Williams and Pryor’s names and telephone numbers were listed on accompanying documents.

County had concerns before program launch

Department of Human Assistance leaders were wary of potential hazards even before the program got off the ground, Dye said in a March 2022 report to the county’s Board of Supervisors two months after the board initially approved the project.

“DHA determined there would be significant challenges in allocating (American Rescue Plan Act) funds to restaurant meal services if the partners were unable to meet the ARPA compliance and reporting guidelines,” Dye said in the report.

Dye said department officials met with local NAACP and Family Meals Sacramento after county supervisors approved the funding in late January 2022 to review U.S. Treasury Department rules and regulations on how federal rescue act funds are spent.

The officials concluded the rules would be too onerous for the local NAACP and Family Meals Sacramento to follow. Training the two groups would be too costly and time-consuming, Department of Human Assistance officials concluded.

If the local NAACP and Family Meals Sacramento couldn’t comply, the food insecurity program would become an “administrative burden and create an audit risk, creating further hardship on restaurants, the community and the county,” Dye said in his report.

Despite the challenges, Sacramento County supervisors approved the program agreeing to tap millions from the county’s general fund.

The DHA used $3.5 million in county general fund dollars to pay for the program — $1 million went to Family Meals Sacramento for restaurant meals contracts and the $2.5 million to the Greater Sacramento NAACP to administer the program, distribute the meals and pay for outreach, plus another $250,000 to the chapter from another restaurant meals program pot. Yet more money to cover administrative costs pushed the program’s total to $4.1 million.

Sacramento County then backfilled the general fund cash out of the combined $300 million in federal American Rescue Plan Act funds awarded Sacramento County in 2021 and 2022.

The strategy, Dye told supervisors in 2022, would “allow for a more effective and streamlined approach” to getting the program up and running.

Department of Human Assistance officials declined comment. A message to Dye on Friday was not immediately returned.

Sacramento County Supervisor Phil Serna, whose District 1 provided a portion of the project’s funding, declined comment. A message to Board of Supervisors chair Patrick Kennedy’s office was not immediately returned.

Frustration, missed payments and non-disclosure agreements

Participating restaurant owners cooking the meals expressed frustration over how the program was being managed, according to documents, correspondence and interviews.

One restaurant owner who participated in the program pointed to late compensation payments and questioned where the money was going.

The restaurant owner who spoke with The Bee dipped into savings and scrambled to pay late bills while waiting for program payments. Another restaurant owner withdrew from the program after struggling to keep up with the program’s changing record keeping requirements.

Yet another participant who walked away from the program complained that payments were “consistently over 90 days late,” and that they were routinely discouraged from asking county officials about the delays, correspondence obtained by The Bee shows.

Concerns were also raised by restaurateurs over Williams’ insistence on non-disclosure agreements as a condition to participate in the program.

When asked about the agreements, Sacramento County attorneys said the county is “not privy to the terms and conditions that its contractors impose on its sub-recipients.”

“The County was unaware, and the NAACP was not required to disclose, that its restaurants were asked to execute NDA’s,” the Sacramento County Counsel’s office said in a statement.