The county Board of Supervisors unanimously approved transferring two vacant buildings in National City from the local chapter of Volunteers of America Tuesday as part of a settlement, after an audit found unverified spending from that organization.
Supervisors also approved $227,000 to purchase the buildings located on 2131 and 2325 E. Seventh St., and over $1.1 million for renovations. The county plans to use the buildings for substance abuse treatment. The VOA chapter previously operated a 120-bed alcohol and drug treatment facility at the two properties.
The Volunteers of America Southwest California chapter had contracted with the county to provide various behavioral health services, including adult residential substance use treatment and withdrawal management.
According to county officials, the buildings will require up to $10 million in repairs before they can be used again for public services, and supervisors would have to approve any future spending.
A nonprofit organization founded in 1896, VOA provides affordable housing and assistance services to low-income people.
According to a Sunday article in the San Diego Union-Tribune, a 2018 audit found missing documentation and misstatements by the local VOA chapter. Following a review, county officials last year found about $6.5 million in unverified spending, according to the county Communications Office.
On Jan. 23, 2020, the county sent a letter to the former CEO of the VOA local chapter, Gerald McFadden, announcing it was terminating a contract with the organization.
The letter signed by John Pellegrino, Purchasing and Contracting department director, stated that audit findings "all represent compelling evidence that VOA has not been operating in compliance with the legal requirements of the contract."
According to the letter, McFadden was obligated to report "critical incidents" such as fraud or unethical conduct, and the county had reason to believe he may not have.
During Tuesday's meeting, board Chairman Nathan Fletcher said the events surrounding the VOA contract "are incredibly disappointing," but he was grateful an audit discovered the financial problems.
His colleague Terra Lawson-Remer said it would have been better for the county to recover the money, "but I think this is a good solution given the options that are available."
"It's really sad that we had to come to this, but it's so important we hold entities accountable" if fraud is found, Lawson-Remer said.
She added there there's "obviously work to be done" on the buildings, which have promise and potential.
Luke Bergmann, county Behavioral Health Services director, said his office will look into how to establish those services at the National City location as fast as possible.
In a statement after the vote, Fletcher said renovating the property "can bring more beds online for people who are struggling with addiction ... People who need a place to stay and heal on their road to recovery will soon have it."
Barbara Banaszynski, president and CEO for the VOA Southwest chapter, said in an emailed statement that her organization "(appreciates) the county's assistance in working through this with us to resolve this issue. We look forward to now being able to focus on the expansion of VOASW's services for the large numbers of those in need in San Diego."
