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32963 Investigation: Questions raised about how Food Bank spent donor dollars

Photo: Food Bank CEO Judy Cruz (center) accepting the second of two $50,000 checks; the used truck purchased with new truck money.

Management of the Treasure Coast Food Bank, a nonprofit founded a quarter of a century ago to alleviate hunger in Indian River County and three neighboring counties, has engaged in a variety of questionable dealings that are jeopardizing the organization’s mission, according to present and former employees as well as donors.

Vero Beach 32963 began looking into allegations about financial mismanagement at the Food Bank at the request of island donors Cindy and Joe Scherpf, who feared that thousands of dollars they had given to the Food Bank had not gone for the agreed-upon purpose.

In the course of a nine-month investigation by 32963, documents and information were provided by eight current and former Food Bank administrators and staffers as well as other donors and government agencies.

Beyond the Scherpfs’ concerns, the inquiry found a number of instances where Treasure Coast Food Bank management, under CEO Judy Cruz, accounted incorrectly for how donors’ dollars were spent and misstated the Food Bank’s own spending.

For example:

• In November 2015, according to press releases and newspaper accounts, Publix gave the Treasure Coast Food Bank $120,000 to buy a new refrigerated truck for food transport. But purchase records and photographs obtained by 32963 show the Food Bank spent only $55,000 of the $120,000 on a 2012 truck cab and 2008 trailer with a broken refrigeration unit and over 400,000 miles on it. A Publix spokesman said Monday that Publix was unaware that the $120,000 donation had not been used to purchase a new truck, and was looking into it.

• In the summer of 2015, the Food Bank justified the partial spending of donations and state reimbursement funds for its Summer Feeding Program by showing inflated hourly amounts paid to drivers, totalling thousands of dollars over what was actually paid.

• The budget for the 2016 Summer Feeding Program, which recently concluded, falsely showed thousands of dollars in salary paid to a volunteer who worked for free.

• Charitable organizations distributing diapers received from the Food Bank were charged about $12,000 in 2015 and 2016 by the Food Bank for Huggies diapers that had been donated by The National Diaper Bank Network. The Diaper Bank contract says that charging for the diapers is not allowed.

In response to allegations that Treasure Coast Food Bank CEO Judy Cruz misrepresented how certain donations were spent, exaggerated spending to justify where money went and charged for donated goods in violation of contracts, Cruz and Food Bank board chairman Miguel Cody responded with the following written statement:

“Treasure Coast Food Bank staff, under the leadership and guidance of its board of directors, has significantly expanded its services and program offerings since 2009 in order to meet the demand for emergency food and other vital resources that emerged abruptly in late 2008 and has remained in place as the region struggles to fully recover from the economic downturn.

“While performing this role, we have done so in an entirely transparent manner.  Each and every year, since 2009, all aspects of our organization, including financials, have been successfully audited by multiple, independent entities.”

But while the Food Bank financials have been audited yearly to show the overall financial position of the Food Bank, which includes its assets, investments and liabilities, the audits do not look at whether performance is in compliance with contracts.

The audits do not break down and track individual contributions to determine how money is spent, or whether it is spent according to its stipulated purpose.

Orchid Island residents Cindy and Joe Scherpf began questioning financial activities at Treasure Coast Food Bank after becoming substantial donors. In 2013 and 2014, they joined with the Grand Harbor Community Outreach Program, which offered to match their donations of $25,000 a year to the Food Bank, for a total contribution of $100,000 for two years – $50,000 of it from the Scherpfs.

A contract that accompanied the donation said the money was to provide “nutritious food to the food insecure children of Indian River County.”

The contract also said that if the use of the funds was misrepresented, the money was misappropriated or the recipient did anything inconsistent with the stated purpose of the grant, the donation would be returned.

In 2013, Joe Scherpf, a retired CPA and auditor for Deloitte & Touche who was on the Food Bank board, began asking Food Bank CEO Cruz questions about how money was being spent; the questions were obviously unwelcome, and his inquiries resulted in Scherph being ousted from the board.

Then Cindy Scherpf started getting email complaints from elementary school nutritionists who were charged with sending nutritious food from the Food Bank home with hungry school kids for the weekend, as part of a backpack program funded by the Scherpfs and Grand Harbor.

In April 2014, elementary school nutritionist Susan Brenton wrote Cindy Scherpf: “We have had to find other sources to help feed our 46 families because we have had repeated problems with the [Treasure Coast Food Bank], including rodent droppings on the food. We receive shortages each month when we do get the food. Other schools have complained as well.”

Several months after her email about the rodent droppings and shortages, Brenton emailed Cruz at Treasure Coast Food Bank, copying the Scherpfs: “The order we placed on October 16th was completely different from what we actually received . . . which included canned octopus, anchovy paste, two glass jars of spaghetti sauce and one gallon of apple juice . . . I don’t understand why we are getting boxes of questionable food for children . . . I thought your organization received $50,000 dollars for the Backpack Program from the Scherpfs.”

Cruz replied: “As for you continually needing to copy others who have absolutely nothing to do with Treasure Coast Food Bank, I’m not understanding why. The Scherpfs have never given Treasure Coast Food Bank $50,000 . . . If you have a problem with the Food Bank, deal directly with us.”

There is no question the Scherpfs gave $50,000 over two years to the Food Bank through the Grand Harbor foundation, which matched the money. Canceled checks prove it, as well as photos of the Scherpfs, Grand Harbor foundation leaders and a smiling Judy Cruz accepting the over-sized checks. 

In response, Cindy Scherpf emailed Cruz to express concern over “the disconnect which goes on in your organization.” Scherpf told Cruz that she was worried that the majority of the Food Bank’s expenses are “related to overhead and not to the acquisition and distribution of food to food insecure children” – a use that was stipulated in the grant agreement.

Then, a few months later, in February 2015, Beachland Elementary nutritionist Cindy Aspromonte emailed the Food Bank about problems with the food her school received: “The Food Bank sent me expired cereal . . . This needs to be replaced . . . The first delivery and every delivery since has expired product. The [children’s] immune system is not fully developed and this could possibly cause harm to them . . . This has been a continuous problem between the Food Bank and Beachland.”

Meanwhile, the Scherpfs, uncomfortable over what the nutritionists said and Cruz’s disavowal of their contribution, began looking at Food Bank expenditures and noting growing evidence that donations from other sources were being wrongly used to explain where their money went. They asked Grand Harbor to get $18,000 of their grant money for 2014 returned so that they and Grand Harbor could use it to make sure that the money was being used to provide nutritious food for hungry kids.

In response Grand Harbor foundation directors promised to investigate and went to Treasure Coast Food Bank to look at some of the food. What they saw looked fine, they said. They also visited several more times and looked at numbers presented by the Food Bank that showed more than $50,000 of the money in question spent on food, according, they said, to the terms of the grant contract.

Further, Grand Harbor Community Outreach leaders Doug and Susanne Sweeny pointed to an investigation undertaken by The Florida Department of Agriculture and Consumer Services – requested by the Scherpfs – which concluded that Treasure Coast Food Bank had satisfactorily shown where the Scherpf money had gone. This finding, they said, explained why they would not support the Scherpfs in their contention that $18,000 had been misspent and should be returned.

But the investigator for the state agency wrote the Scherpfs a more detailed explanation of why the state had closed the investigation, saying that it was not the job of Agriculture and Consumer Services to complete an in-depth investigation, matching contract stipulations with spending, because “the issue is outside the purview of the Department.” If the Scherpfs wanted that, wrote the investigator, they needed to “pursue [it] in civil court.”

The Scherpfs, however, declined to file a lawsuit, calculating that it would cost a lot more than the missing $18,000, which they still hoped would go to feed hungry children.

Instead, the couple asked 32963 to look into what was happening at the Food Bank. 

Based on numerous Food Bank documents obtained by 32963, as well as accounts from former and current Food Bank administrators and staffers, it appears the Scherpfs are correct in their allegation that a portion of their money was not spent according to the terms of their contract. Further, it appears that what happened to the Scherpfs has also happened to other donors, whose contributions were only partially spent in the way they were told.

“How Treasure Coast Food Bank handles its donations reminds me of a shell game or Three-Card Monte,” said Joe Scherpf.

A former Food Bank administrator, who asked not to be named, said this: “I was involved when the Scherpfs asked for their money back. Judy [Cruz] backed into the numbers to explain how their money was spent, showing them food from other donors to justify their spending. She was lying and she knew it.”

Said another administrator, who also asked not to be named: “We are told to falsify documents and fill in the gaps. It is a job requirement, along with ignoring those numbers that you know are falsified.”

Paperwork shows the Food Bank claimed to have spent a portion of the Scherpfs donation to purchase food for the Mobile Pantries program. But all of the Mobile Pantries food was donated by organizations such as Publix and Winn Dixie and did not require spending the Scherpfs’ money.

In addition, the nonprofits that distributed the donated Mobile Pantries food paid $500 each to cover employees’ salaries and gas for distribution, so no aspect of the Mobile Pantries program required spending the Scherpfs’ donation.

The Food Bank also said that a percentage of the Scherpfs’ grant money went to stock school pantries. But the great majority of food in the school pantries also was donated by other sources, coming to the Food Bank free of charge.

The Scherpfs further questioned whether Treasure Coast Food Bank could justify spending part of their money for food at the local Boys and Girls Club, which – while a well-respected organization – is not in the business of providing nutritious food to food-insecure children.

In fact, records show that thousands of dollars went to purchase goldfish crackers and animal crackers – with questionable nutritious value – for children in the Boys and Girls Club after-school program, where about 20 percent of the kids are not “food insecure.”

Further, at least five percent of the food provided to hungry school children by the Food Bank with the Scherpfs’ money had expired and had to be thrown away.

Former and current employees of the Food Bank are quick to say that the Food Bank does great work, but they are also quick to say that they detest the questionable dealings that have become business as usual with the CEO.

CEO Cruz’s public relations consultant Angie Francalancia emailed a statement in response: “Unfortunately, these unfounded allegations continue to distract Treasure Coast Food Bank from fulfilling our mission and a 27-year commitment to ending hunger in Indian River County and throughout the Treasure Coast.”

Despite the Food Bank’s insistence that the Scherpfs are wrong to accuse them of any wrongdoing, Cindy and Joe Scherpf remain steadfast in their position that the Food Bank has not accounted for $18,000 of their 2014 donation, violating the terms of the grant contract. And, they continue to question whether such dealings were more widespread: “Is what happened to us happening to other donors and still going on today?” asked Joe Scherpf.

Certainly, the Food Bank’s violation of the contract with the diaper network in order to make thousands of dollars, the missing $65,000 from the Publix truck donation and the inflated payroll for the Summer Feeding Program point to “yes” as the answer to Joe Scherpf’s question.

And there is more: 

• When a staffer complained to Cruz that Food Bank Volunteer Coordinator Gary Porter should not be working with children because of a 1997 criminal conviction for having sex with a 16- or 17-year-old when he was 29, which made it illegal for him to work with children, Cruz fired the staffer, and let Porter continue to talk to school groups and meet with children who are volunteers. 

• Several charitable agencies distributing food were charged approximately $1,000 in total for thermal blankets that had been donated to the Food Bank, according to documents.

• In the recently released annual report, Cruz included the names of people as donors who did not actually donate the $1,000 or more credited to them. Why she did this is unclear. Was it to hide losses and show a more balanced budget than the Food Bank actually has, or perhaps to attract donors by showing a longer list of supporters?

Many current and former Treasure Coast Food Bank administrators and staffers say the turnover at the nonprofit is huge because people are constantly leaving due to what they call “the dishonest and sloppy way it is run” – or they are fired for asking questions.

Repeatedly, they say, they want to know what the Scherpfs began asking three years ago: “Where is the unaccounted-for money going?”