Investigation Raises Concerns Nashville Nonprofit’s Use of Grant Funds
A Nashville nonprofit misused grant funds worth $42,249.74, including payments to the executive director, as revealed by an investigation by the Tennessee Comptroller’s Office. This nonprofit, Successful Survivors, received $299,670 from the Tennessee Department of Mental Health & Substance Abuse Services in 2018 for a rehabilitation house. However, the executive director paid themselves $27,000 in “developer fees” without the necessary approval or documentation. Moreover, $4,000 was donated to his church, a violation of grant guidelines. The organization also failed to provide proper documentation for renovation payments and used grant funds for unallowable taxes. Investigators also found that the nonprofit gave false information to the IRS and Tennessee Secretary of State. These results have been shared with the Office of the District Attorney General. The Tennessee Comptroller’s Office emphasized the importance of nonprofits maintaining documentation for grant expenses and implementing internal controls, with the Board of Directors overseeing financial reporting and operations.
“Nonprofits must ensure they collect and retain adequate documentation to support grant expenditures,” said Comptroller Mumpower. “It’s also vital the Board of Directors provide adequate oversight to implement internal controls over financial reporting and other operations.”
Successful Survivors Nonprofit
Successful Survivors is a nonprofit that assists individuals with mental illness and substance abuse issues. In 2018, the organization partnered with the Tennessee Department of Mental Health & Substance Abuse Services (MHSAS) to obtain $299,670 in grant funds to purchase and renovate a home in Nashville to use as a rehabilitation house.
Investigators determined the executive director used these grant funds to pay himself “developer fees” totaling $27,000. The executive director told investigators that he believed he deserved the payment for facilitating the property purchase and overseeing the renovation. Successful Survivors did not receive approval from MHSAS to pay these “developer fees” and failed to provide any written documentation justifying the payments.
Additionally, investigators found that $4,000 in grant funds was donated to the Greater Heights Missionary Baptist Church, where the executive director of Successful Survivors serves as pastor. Contributions and donations are prohibited according to the Code of Federal Regulation grant guidelines.
Successful Survivors also failed to provide invoices or receipts for 34 payments totaling $9,404.11 related to the renovation of the Nashville home and paid miscellaneous unallowable taxes totaling $1,845.63 with grant funds.
Other findings noted by investigators include Successful Survivors filing false information with the Internal Revenue Service and Tennessee Secretary of State.
The results of this investigation have been communicated to the Office of the District Attorney General of the 20th Judicial District.
