An independent audit published Monday reveals that the local nonprofit's financial woes are attributed not only to the fall of its Three Graces Recovery Center and the theft and sex scandals that forced AOC to return state grants, but also to the $1 million loan the agency took out to buy land associated with the downtown Joie De Vivre development. A chronological timeline of Acadiana Outreach Center's near financial ruin has been detailed in an independent audit released Monday on the Legislative Auditor's website.
The Outreach Center, which before mid-2011 served as a critical charitable agency for the area's homeless and drug-addicted, made headlines last year when it was revealed that gross mismanagement of its Three Graces Abbeville treatment facility and theft and sex scandals that forced the nonprofit to forfeit state grant money left a dire state of affairs for the agency's finances and the services it provides.
Also included in the audit published Monday is the story of Joie de Vivre and how it played into AOC's downfall:
Beginning in the summer of 2007, the Acadiana Outreach Center began seeking ways to mitigate the issues of housing for Lafayette residents who earn under the median income in order to address the root causes of poverty. While working with the University of Louisiana at Lafayette's Architecture Department on campus renovations, the idea of an affordable housing development was broached which has become the Joie de Vivre apartment and retail complex. This development will contain 6 buildings housing 72 apartment units as well as retail and commercial space. The residents will be lunited to those earning less than 60% of the median income for Lafayette: for a one person household, this would be $24,180 per year or under, while for a household of four, this would be $34,500 or under.
As of June 30, 2011, the Acadiana Outreach Center had utilized two federal appropriations for $274,400 and $712,500 to purchase properties, manage the development, and obtained tax credits from the state in order to finance the construction. The Acadiana Outreach Center was to only own .01% of the development, while the rest was to be owned by those investors who purchase the tax credits. A professional management company was hired to oversee the daily operations of the development.
But AOC purchased the Joie de Vivre properties just weeks before the nonprofit's board of directors learned the ugly truth about both Three Graces Recovery Center, the 75-bed alcohol and drug addiction treatment center that was supposed to generate a profit for AOC, as well as the agency's former CEO Rick Newton, who had been misleading the board for months: Three Graces wasn't making a profit, and it would be another six to eight months before the recovery center would be in the black.
The 15-16 months AOC spent pouring money into Three Graces brought the nonprofit to a financial standstill. The staff has since been cut in half and several key operations have ceased or been transferred to Lafayette Catholic Services.
In January of this year, Acadiana Outreach Center was forced to sell its Joie de Vivre properties to the Lafayette Public Trust Financing Authority for $1.13 million, just slightly more than the $1 million loan AOC had taken out to purchase the properties.
Click here to search for the full audit at the Legislative Auditor's website.