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Audit finds that Bethany House violated state and federal rules

County Comptroller’s office releases report of Baldwin nonprofit

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The Nassau County Comptroller’s office released an audit report of Bethany House, a Baldwin-based nonprofit that provides shelter and services for homeless women and children, some of whom have escaped domestic violence, that found questionable and excessive payments to staff, including founder Sister Aimee Koonmen, and violations of nepotism and living-wage laws.

The 42-page report, released on Oct. 8, details a pattern of financial irregularities, including a failure to maintain documentation “to support over $160,000 in stipend payments” and “questionable payments exceeding $35,000 [that] were made to board members and employees, with no apparent reason for these payments,” the report reads.

“We found that Bethany House violated the terms of their [memorandum of understanding] with Nassau County by not maintaining adequate accounting records and not complying with various federal and state regulations,” investigators wrote in the report.

In five residences around Nassau County, including the location in Baldwin on Demott Avenue, Bethany House provides emergency and transitional housing and a range of programs to support families and return them to self-sufficiency. Three Amityville Dominican Sisters rented a small house in Roosevelt in 1978 and opened the doors to families who sought shelter, and the organization grew from there.

According to its 990 filing with the IRS, Bethany House took in a little less than $500,000 in contributions and grants in 2018 and nearly $647,000 the year before. Its total revenue was $1.87 million in 2018 and $1.8 million the year before, and its total expenses amounted to $2.2 million in 2018 and $2 million the year before that.

Audit investigators found that Bethany House did not have a formalized petty cash policy, and more than $6,000 of petty cash was used for “unallowed expenses, such as public relations expenses, holiday gifts of $1,100, reimbursement for groceries purchased with an EBT card [SNAP benefits] and holiday tips of over $750.”

Additionally, staff members hired a relative in a key position, violating the New York State Nonprofit Revitalization Act. Bethany House employed Koonmen’s nephew as chief operating officer, and he received compensation of $186,570 and drove a vehicle owned by the organization. Auditors also found that Koonmen’s nephew was not working full-time.

The report also noted payments totaling about $9,000 made from the bank account in the Religious Order’s name using a Bethany House address to another of Koonmen’s relatives, including a $250 check with “Happy 19th Birthday” written in the memo field.

Another example of nepotism was the hiring of a professional fundraiser with a $76,000 contract. The individual hired was the niece of a current board member, who was not registered with the New York State Attorney General’s Office, as required by the state, auditors found. 

Bethany House funds were also co-mingled with personal funds and used for “expenses not allowable with nonprofit funds,” including holiday decorations, pet food and genetic testing kits. Auditors also found that the organization had underpayments of the living wage and required compensated time off totaling about $1,300 over the audit period between 2017 and 2018.

Koonmen could not be reached for comment as of press time Monday.

The report listed recommendations, including that charitable funds be used in accordance with the Code of Federal Regulations, “making only allowable expenditures that fulfill their mission,” and that Bethany House follow guidelines for nonprofits and provide “proper management oversight, specifically with regards to hiring and firing key employees, which should be documented in board minutes.”

Auditors also recommended ceasing cash payments to employees, board members and relatives; adopting a policy for petty cash management; maintaining documentation for cash disbursements; and properly documenting hours worked by each employee.

Bethany House Executive Director Doug O’Dell said in a statement to the Herald that the issues raised in the comptroller’s review occurred two to three years ago under a different administrative team.

“The new executive leadership at Bethany House quickly implemented new policies and procedures to correct and resolve these matters, and were commended in the comptroller’s report for our prompt response,” O’Dell wrote. “We are extraordinarily grateful for the faith and trust Nassau County has placed in Bethany House to provide comprehensive care for women and children in need of shelter and support services, and look forward to continuing in our mission.”

As listed in the report, Bethany House, in response to the audit’s recommendations, implemented a biometric time-keeping system to validate employees’ hours; reduced stipends through Dec. 31, when all stipend payments will terminate; agreed to comply with the terms of the memorandum of understanding with the county; and agreed to use charitable funds in accordance with the Code of Federal Regulations, among other measures.