Nonprofit spending at Youth and Family Development
Did not meet requirements
› $500 to train three staff members in conflict resolution in April 2015
› $5,000 for 20 summer camp scholarships in May 2015
› $1,000 to rent a storage space in August 2015
› $1,000 to buy basketball hoops for a church recreation program in June 2016
› $5,000 to Journey Educational Services for a summer camp in June 2016
› $6,000 to Journey Educational Services for a summer camp in July 2016
› $7,500 to Journey Educational Services for a summer camp in July 2016
› $500 to pay teenagers to work a volleyball tournament in April 2015
› $1,000 to pay an instructor in a job program in June 2015
Source: City Office of Internal Audit
The director of Chattanooga's Youth and Family Development (YFD) program will be suspended for one week after apparently misusing nearly $30,000 in nonprofit funds over about 18 months, giving more than half of that money to his daughter's organization, according to city officials.
YFD Administrator Lurone Jennings will be issued a formal letter of discipline, ordered to go through a mandatory ethics training and be given a performance improvement plan, said Maura Sullivan, the city's chief operating officer. All of his future "financial and contractual" decisions will need to receive final approval from the city's finance department, she said.
Jennings did not follow city rules when he distributed $27,500 in donations and grants from the Community Foundation of Greater Chattanooga, according to a memorandum from city auditor Stan Sewell.
The money was supposed to be used to provide temporary jobs, work scholarships and educational services to high school students as needed for high school graduation, according to a resolution passed by the Chattanooga City Council in October 2014.
But in June and July this year, Jennings gave $18,500 to his daughter's nonprofit to put on a summer camp for children with disabilities, according to Sewell's memo, which was sent to city officials Wednesday.
Jennings' daughter, Luronda Jennings, serves as the executive director at Journey Educational Services.
The summer camp did not meet the funding criteria agreed on by the city and the Community Foundation, Sewell wrote. Jennings also clearly violated the city's conflict of interest policy, which forbids city employees from participating in matters in which they have a personal interest.
When interviewed by Sewell, Jennings admitted giving the money to his daughter's nonprofit was a conflict of interest. He said he "expected it would come back to haunt him," according to the memo.
He told Sewell he was thinking about helping kids when he made the payments, which were distributed in three increments, but he later realized the conflict of interest. He said his daughter was at a "crucial time" and he wanted to help her, but now believes he made the wrong call.
In the memo, Jennings says: "I'm guilty and whatever the consequences, the challenges I have to face I have to pay the piper too, as I have to be accountable, as I expect others to be."
He did not return a message left on his cellphone Friday.
Maeghan Jones, president of the Community Foundation, said in a statement she is glad to see the city's response to the misuse.
Luronda Jennings said the nonprofit would make a statement once all board members read the report.
"[Our board members] have not been able to review the audit report yet," she said. "But we will make a statement when we review the audit report."
In addition to the $18,500 Jennings gave to his daughter, he also used the Community Foundation's money to pay for mediation training, summer camp scholarships, a storage space rental and basketball hoops.
Of the $27,500 that Jennings spent, only about $1,500 appears to have been used for purposes that align with the agreement between the Community Foundation and the city, according to the memo.
In April 2015, Jennings funneled $500 to Private Dispute Resolution Services, a company owned by city council member Carol Berz. Berz said Friday she does not accept payment when training city employees in mediation because that would be a conflict of interest.
The Tennessee Supreme Court requires that each person trained in mediation be registered with the state; and each registration costs $100, records show. Berz said she believes the $500 payment was for those fees.
"There's no way we would have accepted something from the Youth and Family Development fund," she said. "We couldn't do that. We would accept, without a doubt, a check from the Community Foundation. There is absolutely nothing wrong with that."
The Community Foundation's funds were supposed to be distributed by an advisory committee made up of three people: Jennings, YFD program director Gary Rudolf and YFD deputy of education Jason McKinney, according to the memo.
But it appeared that Jennings himself initiated all of the spending between October 2014 and June 2016, Sewell wrote. He also noted the other two committee members are under Jennings' authority.
All committee members were required to recuse themselves on "any grant, loan or payment in which the member has a personal or financial interest," according to the memo.
The city's finance division will now make the final call on financial decisions for Youth and Family Development, Sullivan said. The one-week suspension was recommended by the city's human resource department, deputy chief operating officer David Carmody said.
"For this type of offense, human resources looked at other past disciplinary measures that are comparable and made a suspension recommendation based off of that," he said. "After receiving the recommendation, the chief operating officer and mayor made a final determination."
Jennings has been a city employee since 2013. Prior to that, he worked as the executive director of the Bethlehem Center, a nonprofit community center in Alton Park.
In addition to the payments Jennings made from the Community Foundation's money, he also moved around $50,000 in funds belonging to the Bethlehem Center during the summer, Sewell found.
Although he no longer works for the Bethlehem Center, Jennings by some oversight was still named as an authorized user on the Bethlehem Center's "V-Fund," which is managed by the Generosity Trust, a local Christian nonprofit.
In June, Jennings transferred $30,000 from the Bethlehem Center's fund to the YFD's fund. On the same day, he sent the Bethlehem Center a $20,000 "donation" — but the money came from the center's own fund.
Leaders at the Bethlehem Center were "disturbed," according to the memo. Two months later, in August, Jennings paid back $24,000 to the Bethlehem Center's fund. He'd apparently spent the remaining $6,000. The Generosity Trust agreed to provide $6,000 so the Bethlehem Center was completely reimbursed.
It's not clear why Jennings moved the money around. He told Sewell he was "trying to re-establish himself as having control over the fund," so he could win potential donors, according to the memo.
Four days after Jennings transferred the $50,000, another $2,000 was pulled out of the Bethlehem Center's fund.
It's not clear what happened to that money.
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