Community Action of Minneapolis laid off its employees and is no longer accepting energy assistance applications after state officials raided its offices Friday morning.
About a dozen Department of Commerce and Department of Human Services officials, including its lead auditor, showed up as the nonprofit organization was opening its doors, warrant in hand, to obtain all of the organization's financial records.
The Star Tribune first reported Sunday that a new state audit concluded that leaders of the organization misspent more than $800,000 on trips, golf, spa visits and even a personal car loan for its chief executive.
Human Services Commissioner Lucinda Jesson said these practices contributed to poor outcomes for the agency’s clients.
“Our first priority must be to ensure that low-income people in Minneapolis and other parts of Hennepin County are getting the help they need,” Jesson said. “The state’s action will make sure these Minnesotans have services that will help their families improve their lives and ensure basic needs are met, especially with the cold winter months around the corner.”
Gov. Mark Dayton supported the action by the two agencies.
“The governor believes the Departments of Commerce and Human Services are acting properly," said Dayton spokesman Matt Swenson.
The state immediately ended all contracts with the organization and vowed to collect any misspent tax money.
Commerce Commissioner Mike Rothman is working to ensure those who need heating assistance will get it.
“The Commerce Department has taken the urgent steps necessary to ensure Minneapolis residents get heating and weatherization assistance as winter approaches,” said Commerce Commissioner Mike Rothman. “We are immediately transitioning the Energy Assistance and Weatherization Programs from Community Action of Minneapolis to neighboring community action agencies. This will preserve our services to Minneapolis residents.”
Community Action chief executive Bill Davis could not immediately be reached for comment. The organization provides weatherization, heating assistance and career counseling.
Minnesota Community Action Partnership, the umbrella group for the state's community action organizations, said the raid is a crucial and needed turning point.
“Local Community Action agencies are good government institutions," said Arnie Anderson, head of Minnesota Community Action Partnership. "Now, we can get this fixed. It will be better than ever. “
By 11 a.m., Community Action of Minneapolis employees were told to go home.
"We've been laid off," said Leslie Powell, a staffer. "I walk to work every day and I care about my community."
Staff posted a sign on Community Action's window saying they would not be taking energy assistance applications until further notice.
Cedric Gibbs and Anita Nunn had their energy assistance application in hand when they saw the sign.
Gibbs is disabled and has received assistance in the past.
Anita Nunn also showed up to complete her application.
"I should have brought everything with me," Nunn said. "Yesterday they acted like everything was okay."