Citing questionable expenditures and multiple blown deadlines, Orange County officials told the nonprofit Viet America Society to repay $2.2 million in federal Covid relief funds aimed at providing meals for shuttered seniors, according to letters sent to the organization’s CEO and its lawyer on July 26.
Viet America, a charity group that employed Supervisor Andrew Do’s daughter, Rhiannon Do, initially received the Covid money in 2020 and 2021 through Do’s discretionary funds. Since last year, when that transaction became public knowledge, Viet America has faced scrutiny, including demands for an accounting of how it spent the money.
The most recent deadline for a full accounting expired in June and Viet America was given an extension into late July. The letters suggested that the second deadline also passed without adequate paperwork, prompting the demands for Viet America to repay the money by Aug. 26.
The letters also note that Rhiannon Do received money as part of the contract.
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“To date, VAS has not demonstrated that it performed as required under the Contract,” said a letter sent by Elsa C. Rivera, contracts monitoring & program compliance manager at OC Community Services. “The auditor stated that VAS lacked internal controls, did not follow the federal uniform guidelines, did not follow the funding source guidance, and lacked records necessary to establish an audit trail.”
In April, VAS hired the Pun Group to conduct a single audit by June 30. But last month the county was notified that the audit could not be completed in time because Viet America had failed to provide complete documentation. On July 23, the auditors informed the county that they would be releasing a report concluding that the nonprofit did not follow requirements to track how it spent the federal funds. The next day, Viet America fired the Pun Group.
“VAS’s decision to terminate the Pun Group undermines the County’s extensive efforts to determine VAS’s performance under the terms of the Contract,” the letter said.
A county spokesperson declined to comment when asked about whether VAS was given the option of turning in its audit instead of repaying the county.
If audited by the federal government, Orange County Supervisor Katrina Foley said the county could be responsible for paying the money back.
“The county is ultimately responsible for ensuring that the funds that were allocated by the federal government for purposes of (the American Rescue Plan or the CARES Act), that those funds were allocated according to the parameters that were given, and if we can’t prove it, then we may or may not have to pay it back,” Foley said.
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Money for the meals program was directed to Viet America Society by Do from his First District discretionary funds without publicly disclosing that his daughter, Rhiannon Do, was affiliated with the organization. The lack of disclosure is not a violation of state law or county guidelines, but when the move became public, Do was criticized for his decision. And a recently proposed state bill that would prohibit public officials from voting on contracts that could financially benefit their adult children is going to the State Assembly for consideration.
Andrew Do declined multiple requests for comment.
It’s unclear what role Rhiannon Do had with the nonprofit. In recent years she signed two county-funded subcontracts as president of Warner Wellness, another name for Viet America Society. She also was listed in a Viet America Society tax filing as the organization’s vice president, and other documents from the nonprofit list her as one of three voting directors.
Viet America’s lawyer Sterling Scott Winchell previously said earlier this year she is no longer working with the organization.
The $2.2 million currently demanded by the county is a small portion of the total $13.5 million that the LAist news site reported Do directed to his daughter’s charity group Viet America Society.
Winchell described the county’s demand letter as “extreme and punitive,” adding that a new auditor was hired and is expected to finish an audit in a couple of weeks. Winchell said he was not involved in the firing of the Pun Group or the hiring of the new auditor. He did not return requests for the name of the new company completing the audit.
“This didn’t become a priority (for the county) until 2024. The contracts under question have been going since 2021, 2022,” Winchell said. “They were asleep at the switch, and I think they’re trying to cover their butts by punishing Viet American Society for something that they should have helped with.”
In the letters sent to Viet America, county officials said the group submitted documents that were “questionable, inconclusive or missing.”
County officials said Viet America didn’t provide complete documentation about who it was serving, failing to say who dropped in or out of the program in any given week.
The county is also wondering how many people the organization helps. One letter said VAS provided 900 participant applications to the county, but when the county tried to verify those clients — using a sample of 300 applicants — it could verify just 49 applications, or 16%, of the number tested.
“VAS originally reported that they served 20,000 meals per month and later revised their reported service to 10,000 meals per month without variance in weekly participation throughout the Contract term,” one letter from the county said.
The letters also raised questions about other transactions found in the nonprofit’s financial ledgers for one of the contracts. These included outside expenditures, such as $100,000 to Behavioral Health Solutions, a $5,000 rental payment to Huntington Partner, and more than $104,000 paid by VAS in donations, though it doesn’t say to whom or for what purpose. The letters also said that Viet America did not provide requested invoices for more than $329,500 in “Food Supply” expenses.
The letters also note an $18,000 payment to Rhiannon Do, though it’s unclear if that money was for services beyond her role with the organization.
Deposits also raised questions for county officials including about $1.2 million from Aloha Financial Investment and nearly $167,000 from Behavioral Health Solutions. “Miscellaneous Revenue” totaling more than $17,000 also references Aloha Financial Investment.
A separate letter said that when VAS was questioned about a $20,000 donation to the Santa Anita Neighborhood, the nonprofit claimed they had a subcontractor agreement, but failed to provide an executed agreement and proof of approval to subcontract with the association. The organization claimed it worked with multiple subcontractors, but was unable to provide agreements or documentation of work performed.
John Moorlach, a director at the conservative California Policy Center and former Orange County supervisor, said Andrew Do should have taken more care in dealing with a fledgling charity with little experience handling government contracts.
“Unbelievable. No track record, nepotism that wasn’t disclosed and now just sloppy bookkeeping, it seems that Andrew Do has a lot of explaining to do,” said Moorlach, a certified public accountant who also served as the county treasurer-tax collector and a state senator. “The risk of working with a new non profit that just got formed, these are red flags.”
Moorlach said he didn’t know what more the county could have done to make sure Viet America Society complied with obligations in the contracts.
OC Supervisor Don Wagner said he hopes the demand letter will push VAS to get an audit done and turned in. If neither a refund or a new audit is submitted, the county could consider suing the nonprofit.
“We have audit requirements for lots of the vendors that we deal with when we give some of these types of grants and awards out,” Wagner said. “It is often the case that they’re fairly small operators. They don’t always have robust audit mechanisms in place, and so we do find ourselves fairly regularly following up with them, asking for the audits, not getting them on time, asking for them again. The county pretty much stays on top of this.”
“There’s not a problem at the county level in terms of our monitoring and doing audits that need to change,” Wagner added. “It’s a reality of the marketplace we’re dealing with right now. This, as I said, is not unusual.”
Foley said Viet America pointing the finger back at the county was “outrageous,” adding that the situation with VAS is unusual for the county.
“The county contracts say that the vendor is required to keep documentation. It is on them to document how they’re spending millions of dollars. It is not on the county to manage that on a weekly or monthly basis,” Foley said. “I’m only aware of one other instance. I’m not aware that this is happening multiple times.”
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