Chicago House and Social Service Agency has launched an investigation into alleged theft by its former chief financial officer ( CFO ), who was arrested in late January for allegedly embezzling from another agency.
The recently discovered theft from Chicago House could significantly impact the agency's discretionary funds, said Board Chair Ryan Garrison, who said that the amount stolen was still being calculated but was likely "in the six figures."
Former CFO Andrea Peoples was in court Feb. 13 because due to a number of allegations tied to her previous employment at Planned Parenthood of Illinois. She pled not guilty that day to charges of theft of between $100,000-500,000; continuing a financial crimes enterprise; misappropriation of financial institution property; and wire fraud, according to Cook County State's Attorney spokesperson Tandra Simonton.
A criminal background check was conducted, Garrison added, and Peoples had no record of financial improprieties since the Planned Parenthood-related charges had not yet been filed yet by Cook County prosecutors. Peoples's resume said that she was still employed at Planned Parenthood and was screened by a human resources consultant, he added. Former CEO Scott Amarell and the entire board, including its executive and finance committees, interviewed her. Garrison admitted the agency may need to "revisit" specific logistics of its hiring process. Peoples was hired in Aug. 2018.
"It was very clear that she had a vast wealth of knowledge and subject matter expertise relative to our grants, particularly on how to draw down [i.e., properly utilize and account for] all of the grants that we received from state and federal [funding streams]," said Garrison. "It was very clear that she was a subject matter expert on all the nuances."
Chicago House historically had difficulty with the position, Garrison acknowledged.
"There was definitely more transition in that position than we had wanted, more than any organization like ours would want," he explained. "There are complexities to vouchering and grant funds, so you want to make sure that there is a lot of stability in that function."
But Garrison said that Peoples' expertise is also what enabled her to mask her alleged theft: "If she had not had that amount of knowledge or that skill set, it would have been an impossibility."
According to Garrison, Peoples said that Chicago House would not be able to complete its audit—wherein an outside firm reviews the agency's financial records for compliance—in a timely fashion, which she attributed to the performance of the agency's previous CFOs. He said that her explanation seemed at the time to be "a plausible story, just based on what we already knew about our previous [CFOs]. The delay of the audit was certainly concerning, but we also spoke to the audit firm who said this wasn't a huge deal, and that we'd do a two-year, instead of a one-year, audit."
But after the auditing process seemed to stall further in late 2019, an additional audit, this time specifically of Peoples' work, was undertaken. She was let go in early Jan. 2020.
The agency's total annual budget is about nine million dollars and has about 110 employees. Garrison believes Peoples allegedly took funds from unrestricted funds, rather than grant dollars, since those do not trigger as many audits. But those unrestricted funds are vital to an agency's overhead.
"The effect is pretty devastating," said Garrison. "We believed we had a large, unrestricted cash reserve that we discover has been depleted. Because that doesn't allow us to weather the ebb-and-flows of our funding-grant cycle. … Those unrestricted dollars are vital."
Garrison said that the Peoples was suspended without pay immediately upon discovery of her alleged improprieties. Two other senior-level employees are believed to be involved. The allegations and supporting documentation were turned over to authorities, he added.
"We're counting on donors to come through and support us in this time," he admitted. "Chicago House has never been on as unsure financial footing as we are right now and that, of course is incredibly disheartening because that is not the result of the lack of anyone's fundraising efforts or the incredible work of our staff. It's the result of a few really self-serving people who held positions of trust. We'll do anything within legal means to recover every dollar possible."
Windy City Times asked Peoples' attorney, Howard Wise, for comment on the allegation, but the call was not returned by deadline.
