Atlantic Human Resources, Inc., in addition to a federal investigation of its Head Start program, is being sued in civil court and has had several of its bank accounts seized by the Atlantic County Sheriff’s Office, according to court documents.
AHR had a lien placed against the accounts, as of March 20, in the amount of more than $142,000, according to Pam Hoerter, a fiscal officer at the Atlantic County Sheriff’s Office.
The lien was placed eight days before paychecks that were due March 28 were not received. The checks were received Friday by AHR’s 218 employees, except for the Head Start workers, who were paid Monday.
AHR receives federal, state and local funding to oversee a number of education, housing and senior programs. It was founded in 1964 and has several offices in Atlantic City, Pleasantville and Rio Grande. The Head Start investigation has forced it to relinquish oversight of 20 locations for the federally-funded program in Atlantic and Cape May counties.
Court records indicate the amount of the lien is due to The Environmental Quality Company (EQ), a Michigan-based corporation that provides environmental management services to minimize waste volumes. The services include treatment, transportation and disposal of hazardous and nonhazardous materials, according to the company’s website.
The first filing was on Oct. 8 in the U.S. District Court for the Eastern District of Michigan. The civil action indicates $142,013 plus interest is owed to EQ.
The complaint filed by EQ states that AHR did not pay any of the invoices of four listed from February 2012.
“Rather, (AHR) has stated only that a local facility would have been cheaper, that cash flow is poor and that EQ should go ahead and file suit because that will just let (AHR) avoid payment even longer,” according to the complaint. EQ removed “approximately 617.52 tons of waste ... for treatment and disposal.”
An invoice dated March 17, 2012, obtained by The Press of Atlanti City, shows $24,890 owed to EQ for picking up hazardous waste at the Adriatic Avenue Center, a Head Start location at 1410 Adriatic Ave. in Atlantic City.
The agreement for services was signed in January 2012 by AHR. Court documents reveal that AHR hired a consultant, who contacted EQ in late 2011.
“(The consultant) did not explain why (AHR) wanted the waste to be transported to Michigan instead of to a local facility,” according to the Oct. 8 complaint. AHR owed “$125,350.38, plus contractual interest, costs, expenses and attorneys’ fees for EQ’s work performed under the agreement.”
The complaint requested a trial by jury, but instead a default judgment was filed against AHR on Nov. 28, 2012.
Hoerter said that since the lien was placed on AHR accounts by a court order, the Sheriff’s Office cannot release the accounts without documents from a court or the state attorney’s office.
In the meantime, an April 3 meeting of the board of directors of AHR resulted in the relinquishing of the grant for the Head Start program effective April 4. A memo dated March 28, signed by AHR Executive Director Joseph Gaynor, was sent to employees saying that due to “funding issues” they would received payment of their paychecks due March 28 some time between April 1 and April 5. Head Start employees received paychecks Monday.
A decision was made Friday by the Office of Head Start in Washington, D.C. to assign interim management of the Head Start program to Colorado-based Community Development Institute (CDI) until a new local organization can be sought.
“When local providers relinquish their grant, or if they have it revoked, “then we put CDI on the ground to run the local program,” said Kenneth Wolfe, a spokesman for the Administration of Children and Families, the department which oversees the Head Start program in Washington. “This is until a new local grantee can be located, which has to go through a competitive process — thus taking some time.”
He added that more specific information will be available in the coming days, including payroll issues and other local concerns.
One of those concerns includes payment of other bills owed by AHR to centers that share space for day care, preschool or elementary school and offer the Head Start program.
Kiddie Kastle Academy Preschool and Child Care in Northfield is one of those centers. Office manager Heather Katzper said AHR owed in excess of $5,000 for six months of shared utility and rent.
“It’s sad for privately funded centers like us. It’s hard to stay open at this point,” Katzper said.
She said the payments have been coming later and later since 2011.
In 2011, AHR reported it served more than 800 children through the Head Start program.
Officials at the nonprofit group have not responded to repeated requests for comment.
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