Autism Group, Late Director Focus of State Investigation

August 14, 2013

Investigative Reports

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AutismThe last known time Craig Stoxen used his room entry card at the Clarion Inn on Chris Drive near West Columbia was at 10 p.m. on Feb. 5.

About 3 p.m. the next day, the 48-year-old longtime president and CEO of the nonprofit South Carolina Autism Society was found dead in his hotel room of an apparent self-inflicted gunshot wound, according to a copy of a Lexington County Sheriff’s Department report obtained Monday by The Nerve.

That report and a separate investigative report by the S.C. Office of Inspector General, also obtained Monday by The Nerve, reveal a situation with similarities to another case last year involving the Columbia-based South Carolina Hospitality Association (now called the South Carolina Restaurant and Lodging Association) and its then-longtime chief executive, Tom Sponseller, who authorities said shot himself to death amid a criminal investigation into embezzled funds by an association employee.

That case quickly grabbed headlines statewide. In contrast, the investigation involving the West Columbia-based South Carolina Autism Society (SCAS) had been kept largely under wraps for months.

Kim Thomas, the SCAS’ interim president, told Lexington County Sheriff’s deputies at the time Stoxen’s body was found that Stoxen was being audited by the Office of Inspector General (OIG) and state Department of Education (DOE) for “misuse of funds,” according to the sheriff’s department report.

The 12-page OIG report, described in a July 18 letter by agency investigator George Davis as “our office’s final report on the investigation,” alleges, among other things, that:

  • A former bookkeeper, who isn’t named in the report, admitted to stealing $5,771.02 in 2011 and 2012 by using the organization’s business credit card for her personal benefit, though she said she repaid the amount. The bookkeeper, who was fired, later admitted to personal use of organization funds before 2011 but contended she repaid that amount as well, though “due to the untimely death of the president, the extent of any repayment prior to the 2011-2012 time period could not be conclusively determined”;
  • The bookkeeper “confirmed submitting false grant reimbursement requests” to the DOE and the S.C. Developmental Disabilities Council (DDC) – a division of the Governor’s Office – “at the direction of the Society’s president,” who isn’t named in the report. Those requests resulted in $188,819 in overpayments;
  • A total of $462,060 in state funds allocated by the DOE and DDC to the organization for fiscal years 2010 through 2012 is unaccounted for, based on a comparison of funding provided by the two agencies and organization expense records; and
  • The SCAS president had an “unusually high salary” and “what appeared to be excessive purchases of technology equipment.” The Nerve’s review of the organization’s federal tax records from 2009 through last year show Stoxen’s annual salary increased from $82,232 to $111,615 during the period, a jump of nearly 36 percent. Thomas’ salary last year was listed at $61,912.

The OIG report noted that of the $462,060 in unaccounted-for funds, $273,241 was allocated by the DOE through state budget provisos, which, according to the report, “did not provide any specific requirements for the services to be performed … nor did it require any state agency oversight or subsequent reporting by the (Autism) Society on its expenses or accomplishments.” Given that, the report recommended that the organization reimburse the DOE and DDC the remaining $188,819 in unaccounted-for state funds.

A total of nearly $1.6 million was provided through the two state agencies to the SCAS for fiscal years 2010 through 2012, according to the report, which noted that the DDC’s portion included a required match from the SCAS.

“In the best possible light, the unaccounted for funds were diverted to other Society functions to support its autism mission,” the report stated, though it didn’t let the former president and bookkeeper off the hook.

“Given the collusion between the Society’s president and its bookkeeper in making up accounting numbers and records, a systemically weak accounting system, and many unusual and unexplainable transactions, the risk of unaccounted for funds being expensed through the Society’s accounting system and then converted to personal benefit was high,” the report said.

“Troubling too,” the report also noted, “were reports the President reluctantly fired the former bookkeeper only due to her fraud being known by fellow employees, and subsequent to her dismissal, the president shredded a large volume of documents, which was an unusual activity for him.”

Seeking Answers

Contacted Tuesday, OIG investigator Carlton Banks told The Nerve that his agency plans to “submit information to the appropriate law enforcement agency as far as the bookkeeper is concerned,” though he declined further comment on that matter.

Asked about the alleged false grant reimbursement requests, the former bookkeeper said she was “following orders of the president,” according to the OIG report.

“She acknowledged that she knew the false reimbursement requests were wrong, but believed that she would lose her job if she questioned the president,” the report said. “She further stated that she needed a job with great flexibility in order to care for her severely autistic son.”

Banks said the Department of Education is conducting its own audit of agency funds that were allocated to the SCAS, and that “other agencies have been notified of our findings.” The OIG report said the state Department of Disabilities and Special Needs (DDSN) provided a total of $1.4 million in funding to the organization for fiscal years 2010 through 2012, though the investigation found no unaccounted-for funds in those programs, which involved service coordination and referral services.

Although DDSN had been cutting its reimbursement rates, the SCAS “maintained its full operational footprint resulting in deficit spending in the program, likely supported from those programs with the unaccounted for funds,” the report said.

Asked if the OIG, created in 2011 through an executive order by Gov. Nikki Haley and made a permanent state agency last year by the Legislature, has discovered many cases of alleged misspending of state funds by third parties, including nonprofit organizations, Banks replied: “There is no basis to suspect there is a systemic issue across state government,” though he added there are “no central contract-monitoring standards.”

In light of the investigation involving the SCAS, the OIG report said all state agencies should:

  • Review their “respective contract and grant monitoring programs, policies, procedures, and training so that every contract and grant has an intentional plan, based on complexity, value, and risk, to provide reasonable assurance of successful execution and accountability to the taxpayers”; and
  • Monitor “any funding, to include legislative provisos, to third parties to provide reasonable assurance funds are used consistent with legislative intent and accountability to the taxpayers.”

The Nerve on Tuesday sent written questions to the directors of or spokespersons for the DOE, DDC and DDSN seeking comment on the SCAS investigation. Only the Department of Education responded by publication of this story.

“The OIG’s report is specific to state grants,” DOE spokesman Jay Ragley said in a written response. “The federal grants process has much greater accountability requirements than state grants. The agency recommended an amendment to another (state budget) proviso associated with state grants, Proviso 1A.39, to require accountability similar to that of federal grants. However, the General Assembly did not adopt this recommendation.”

“Additionally,” Ragley continued, “the Department recommended the deletion of the state funds directed by Proviso 1A.38 to the SC Autism Society and specifically cited a pending OIG report.”

The SCAS relies heavily on public funds: In fiscal year 2012, $978,000, or about 86 percent, of the organization’s total revenues of $1,141,000 was funded by state agencies, according to the OIG report, which noted the organization currently has about 30 employees statewide.

Ragley said the DOE is “working with the society to gather additional documentation to determine the total unaccounted for funds,” and that the SCAS “will provide the documentation related to the state funds by next week.”

‘Period of Great Transition’

Thomas, the SCAS’ interim president, declined comment when contacted Tuesday by The Nerve, referring questions to Erik Norton, the immediate past SCAS board chairman and an attorney at the Nelson Mullins law firm in Columbia.

Norton, who remains on the SCAS board, said organization supporters were notified of the OIG report in an Aug. 5 letter, which was obtained Monday by The Nerve.

“As you know, SCAS recently has been going through a period of great transition following the untimely death of our director, Craig Stoxen,” according to the letter, which noted that Stoxen had been with the organization for 13 years.

“SCAS does not agree with all the factual findings or characterizations of those facts in the OIG report,” the letter said, “but agrees with OIG that additional safeguards for state grant money are needed. Guidelines from the State to make those safeguards consistent among all agencies and all grants are welcome.”

Asked by The Nerve if his organization believes Stoxen misspent any funds, Norton replied: “I don’t know. It’s an ongoing process, and we don’t have a position either way. We are trying to substantiate all of those expenditures.”

In the meantime, the SCAS has “done a fantastic job of continuing to serve our families, and we don’t anticipate any long-term effects from that (OIG investigation),” Norton said.

On its website, the organization, which was chartered by the state in 1972, says it provides information and referrals for services to those who provide care for adults and children with autism, and also is a “strong advocate for state and federal legislation to provide services for South Carolinians who have autism.”

People with autism, which currently has no known cause and no cure, usually have deficiencies in verbal and non-verbal communication, social interactions and leisure activities, according to the website. It typically manifests itself in the first three years of life, the site says.

On Feb. 5, the day before Stoxen’s body was found at the Clarion Inn, a Tweet under Stoxen’s name was issued promoting an upcoming SCAS event.

The Lexington County Sheriff’s Department report obtained by The Nerve said an autopsy report listed the cause of death for Stoxen as a gunshot wound to the head, “manner of death consistent with suicide,” which the Lexington County Coroner’s Office confirmed Tuesday to The Nerve.

Contacted Tuesday by The Nerve, Christine Stoxen said she had not seen either the OIG or sheriff’s department report about her late husband, though she was aware that the SCAS was under investigation.

“Someone on the (SCAS) board said there was poor documentation, but not misuse of funds,” said Stoxen, who is pastor of Grace Lutheran Church in Rock Hill, adding she is not involved with her late husband’s organization in “any way, shape or form.”

Asked about the allegations against the former SCAS bookkeeper, Stoxen replied: “He (Craig Stoxen) fired someone over it, and it got repaid. That’s what he told me.”

“I don’t believe my husband was embezzling,” she said.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.