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Feds say Role Models must repay

June 08, 2002|By SCOTT BUTKI

scottb@herald-mail.com

The U.S. Department of Labor has ordered Role Models America Inc., the military-style academy at the former Fort Ritchie base, to pay back the entire $262,258 in grant expenses questioned in a September 2001 audit.

A federal report, released Friday, said Role Models President Robert Alexander improperly used grant money for personal costs for him and his wife, Janessa, the company's chief executive officer.

The costs questioned by the financial audit include rent, a security deposit, furniture and a water-conditioning system at the Waynesboro, Pa., home of the Alexanders.

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Alexander has requested an administrative hearing to appeal the decision. He said he did nothing improper and does not owe money to the Department of Labor.

As part of that appeal, he plans to accuse the Department of Labor of treating him different than other administrators of grant-funded educational programs because he is black.

A Department of Labor spokesman had no comment on that allegation.

Alexander has called the financial audit "a smear against RMA by insinuation and omission."

The future of the school, which began Oct. 23, 2000, is hazy because the two-year, $10 million U.S. Department of Labor grant the school operated on expired May 30. The grant will not be renewed.

Classes at the school for high dropouts ended last month.

Alexander has said he is optimistic the program will continue sometime this summer, funded with private grants. He expects two possible grants to be confirmed by the end of June, he said.

There is some Department of Labor grant money remaining though he would not say how much, Alexander said.

A September 2001 audit of Role Models questioned $262,258 in costs Role Models charged to the federal grant. The audit request was initiated by U.S. Rep. Roscoe Bartlett, R-Md.

In December 2001, a representative of Role Models met twice with Labor officials to try to justify the questioned costs, the federal report said.

Friday's report said the $265,258 amount remains questionable and is "disallowed."

In a letter, the Department of Labor told Alexander to send the money by a cashier's check, "drawn on non-federal funds."

The audit examined grant use from June 5, 2000, to March 31, 2001. For the audit period, Role Models reported costs of $6.65 million. Its general ledger only supported costs of $4.6 million, the report said. The $262,258 questioned was part of $2 million that was audited.

Alexander said he and his wife were not paid a salary during the time of the audit but were to be paid a management fee instead. The money questioned in the audit would have constituted that fee, he said.

Of the $262,258, he said, "I don't owe it to them."

Department of Labor spokesman Chad Aleshire said federal officials were looking into Alexander's allegation but had no comment on Friday.

Alexander said of the Labor report and decision: "It is flawed and ridiculous. It will be overturned."

Alexander said he did receive a salary during the second year of the program, but he refused to state the amount.

Some of the questioned charges were made by Waynesboro-Pa. based College Corps Management Service, a for-profit corporation which provided administrative services to Role Models. Janessa Alexander was the director of the company.

Role Models paid College Corps $32,051 a month for administrative functions during the audit period and then asked the Department of Labor for reimbursement, the report said. Role Models no longer uses College Corps, Alexander said.

Other questioned costs include $50,336 paid to a mortgage company for a house owned by Robert Alexander in Mitchellville, Md., and $22,903 for rent and a security deposit for the Alexanders' Waynesboro, Pa., house.

The Department of Labor also questioned how two College Corps staff members, who Alexander said were his son and daughter, worked 80 hours every two weeks while also attending an out-of-state university full-time.

The two were paid $49,448 in salaries and fringe benefits. The university's calendar said students had 20 days off, so the audit report allowed salary payments for those 20 days. The audit questioned $44,257 of the $49,488 paid.

Role Models filed May 10 for Chapter 11 bankruptcy, which frees it from the threat of creditors' lawsuits while it reorganizes its finances.

On May 21, Role Models' landlord, the PenMar Development Corp., filed a motion to evict Role Models, saying it violated the sublease by not paying rent on more than occasion.

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