Crossroads board regularly updated on PPP loan
A $2.4 million Payroll Protection Program (PPP) loan applied for and received by Crossroads has been the source of some questions by local county administrators and members of the Crossroads board. It doesn’t take a forensic audit to show members of the Crossroads board should have been well aware of the organization’s move, although there is no evidence the board ever officially approved the loan.
Crossroads recently made the board information packets and financial reports available on its website for the months of January 2020 to May 2021. Looking through the board memos and minutes shows the board was regularly updated about the loan despite Charlotte County Administrator Dan Witt recently saying the Charlotte County representatives on the Crossroads board knew nothing about the PPP loan.
The PPP loan was first mentioned in the information provided from Crossroads in an April 21 update memo to the board from then Executive Director Dr. Susan Baker. But it is likely not the first communication about the loan because her statement begins, “As I mentioned to you previously, Crossroads has applied for the Payroll Protection Loan/Grant offered by the federal government.”
The memo says Crossroads was able to qualify for the aid because of its 501c3 status.
“We applied under full disclosure and we have asked the lending institution for full clarification before accepting the loan,” Baker wrote in the April 21, 2020, memo to the board. “The initial statement has been that our 501-c3 status is sufficient. We will have confirmation this week and will move to accept the loan with that clarification.”
Baker’s memo said the PPP loan helped keep Crossroads’ employees being paid while many of the organization’s services were shuttered at the height of the COVID pandemic.
“This money will allow us to take furloughs and layoffs off the table and should see us through the crisis,” Baker wrote.
In a previous memo on April 1, Baker wrote Chesterfield County had furloughed 565 staff including 124 from the CSB. She told the board the organization was at the point of furloughing some employees since they had closed programs that could not meet social distancing requirements.
What isn’t clear in the communication is if the board ever gave any feedback or go ahead affirming Baker’s decision to apply for the PPP loan. The organization did not have an official board meeting from February 27, 2020, until August 25, 2020, according to the board packets. While other boards in the area adapted to COVID protocols and continued doing business, Crossroads’ system of governance appeared to shut down for six months.
The documentation also shows nowhere that the board officially approved the PPP loan or affirmed the $2.4 million loan process as something they agreed with.
“I think, in hindsight, the board should have had the opportunity to vote whether or not, A – to apply for the PPP loan; B – to accept the PPP loan; C – vote to affirm the forgiveness of the PPP loan and D – instruct the executive director upon forgiveness to put it into the budget,” Crossroads Board member and member of the Finance Committee Thomas Jordan Miles III said Wednesday, June 30.
Still, Baker continued to keep the board informed with updates through memos. A June 23 memo to the board from Baker had a subheading specifically about the PPP loan. Baker said the $2.4 million provided by the loan would be exhausted by mid-July and planned to begin the process to apply to have the loan forgiven. The federal government did forgive the loan.
“Knowing that we could preserve staff positions during this time has been a morale boost of epic proportions,” Baker wrote to the board.
The PPP loan was on the agenda under the Executive Director’s report for the August 2020 meeting. The minutes of the meeting say the loan was brought up in the financial summary portion of the meeting.
The PPP loan came up again at the board’s March 23 meeting when Board Chairperson Carmalita Escoto asked Crossroads accountant Theresa Crenshaw about the loan forgiveness process during a discussion about the financial report. Crenshaw said she expected a decision on the loan being forgiven by March 31.