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Urban League Of Denver Under Federal Scrutiny

Charity Closes Its Doors As CALL7 Investigates

POSTED: 5:16 pm MST November 18, 2008
UPDATED: 3:12 pm MST November 19, 2008

The Urban League of Metro Denver has been around for more than 60 years and has received millions in donations and federal aid. Now, its doors are closed, the building abandoned, and federal auditors as well as CALL7 Investigator John Ferrugia are asking, "Where is the money?"

In 2005, The Urban League received a $347,000 grant from the U.S. Department of Education.

The spending of that money is now under scrutiny by auditors with the federal Office of Inspector General.

The grant money was specifically earmarked for after-school programs including the Academic Enhancement Center and Urban Adventures.

The programs were designed to help children and low-income families.

Some funding for Urban Adventures was provided by Mile High United Way, however, money for the Academic Enhancement Center was directly from the grant.

"Because of the Urban League's stature, or what the stature should be, a lot of people just don't want to consider that maybe something was done that should not have been done," said Patricia Houston.

Houston, and her husband, Herman were hired by the Urban League and helped to write the grant proposal.

"We put together a budget and for the program and specifically for the Academic Enhancement Center," said Herman Houston.

The couple worked alongside with the head of the Urban League, Sharon Alexander-Holt.

In 2005, when the grant was approved, Holt was drawing a salary of $106,000 annually while applying for government funding to continue some programs and keep her job.

In the grant application, the Academic Enhancement Center was to be set up at the Urban League office building and would provide disadvantaged students with:

-Individual tutoring and homework help -Preparation for ACT and SAT tests -Help writing college essays

There would also be computer classes that included Web page design and some students would be paid mentors and peer counselors.

Herman Houston told Ferrugia, "It was an enrichment program that not only addressed some of the risk problems in the community, but also to elevate and give them a horizon that they may not have seen."

He continued, "The grant monies arrived, probably the last day of September, but two weeks before that they just cancelled the Academic Enhancement Center."

Patricia Houston said, "What they actually did was just tell us we were terminated."

She also said, "The students that were going to be part of the program were left high and dry."

Ferrugia asked, "If the [grant] money was for the Academic Enhancement Center and the AEC doesn't exist, where's the money?"

Patricia Houston replied, "I think that's a really good question."

Around the time 7NEWS started asking questions about the Urban League's use of the grant money, the charity's board of directors fired Holt and the organization's chief financial officer.

Board president Jerome Whitney told 7NEWS the board had discovered "disturbing information" and "the two were released for mismanagement."

"We don't know what has gone on with accounting," Whitney continued.

Herman Houston said, "It was a first class program that was funded for and it's not fair to say that kids fell by the wayside because there's no funding. There has to be some accountability."

Holt claims the board never told her she had been fired for mismanagement of funds or lack of integrity.

She insists no money has ever been misappropriated and said she was fired because the Urban League was no longer viable.

One source close to the organization, who did not want to be named, told 7NEWS,"There is concern about financials and programs. Where is the money going? Why were bills not being paid?"

7NEWS has learned that some members of the board asked for an internal audit to determine if money is missing or where it was spent.

The National Urban League officials from New York visited the Denver office in the past few weeks and recommended an audit, but so far that has not happened.

National Urban League officials are expected back in Denver within in a month and if their recommendations are not followed, they could pull Denver's affiliation.

Several Denver Urban League board members have recently resigned.

Herman and Patricia Houston are suing the Urban League over their contracts.

After learning that the Urban League had closed its doors and fired its CEO and CFO, Dana Smith with Mile High United Way told Ferrugia, "Anytime a board chair calls and says the CEO is being asked to step down we have concerns about what is going on, but mainly our concern is for the kids."

According to Smith, at its peak Urban League programs had nearly 300 kids in the after-school program and that was critical because it is often those hours after-school when kids get into trouble, contributing to high dropout rates.

"Providing them with a high quality after-school program where they can have enriching programs of activities, sports, and cultural opportunities is a very effectve strategy for helping them stay engaged in school and ultimately graduate and lead successful lives," said Smith.
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