Editor’s note: This is the second of a two-part series.
An investigation by the Arkansas State Police is currently underway, scrutinizing reported financial mismanagement at the CASA Women’s Shelter.
The probe delves into the operational periods of former executive directors Karen Palmer and Peggy Tillman, revealing a complex web of questionable financial practices, including unsupported payments, unaccounted-for assets, and significant concerns regarding the appropriate utilization of grant funds.
Palmer, who served 33 years as the executive director, has vehemently denied any claims of wrongdoing, offering detailed explanations for the contested financial decisions. Palmer, for instance, asserted that all expenditures related to covid-19 safety measures were not only justified but also explicitly approved by the U.S. Department of Housing and Urban Development.
“The allegations about covid … were all approved by HUD, and they were all directly related to keeping the victims and their children and the staff safe. We are very thankful that we were able to get the chemicals and safety supplies needed,” Palmer stated, emphasizing the critical need to protect residents and staff during the pandemic.
Independent reporting for Pine Bluff & Jefferson County since 1879.
Despite a perceived conflict of interest due to a relative of an employee performing the spraying, Palmer said she utilized available resources to ensure safety. “HUD had waived relevant regulations, including those concerning bids, due to the pandemic’s severity,” she said. “I am proud that, even with daily exposure to covid-positive individuals in our facility, none of our clients died, though one staff member’s husband did. I believe the board should be pleased with my proactive measures.”
Palmer also addressed the accusations regarding staff retirement funds, clarifying that these were not arbitrary payouts but a mandated component of a grant from the Donald W. Reynolds Foundation.
“We got the grant through the foundation, and they required us to have a longevity plan, staff, retention policy, and procedure,” she explained. She detailed how a formula, developed with consultants, attorneys and the board, determined the annual distribution of funds into employees’ retirement accounts.
Palmer expressed her frustration with the current board’s apparent lack of awareness regarding these long-standing policies. “Of course, the board members have changed a dozen times in the last 15 to 20 years, so the current board may not be aware of that,” she said.
Regarding the reported missing “playground equipment,” Palmer clarified the funds were used for essential educational and recreational items during the pandemic.
“It was not playground equipment,” she explained. Palmer said the purchases were for picnic tables, laptops, school supplies and other items for children who were homeschooling in the shelter.
She adamantly denied any double-billing, asserting the impossibility of such an act given HUD’s rigorous reimbursement process. “There is no way to double bill because you have to show proof of purchase and receipts. They don’t just give you the money,” she said. She speculated that any repayment issues might stem from a failure to submit required follow-up reports after her departure.
Palmer also addressed the accusations of forgery on grant documents, specifically regarding board chair Dr. Simmie Armstrong’s signature. “They sent me a copy of that,” Palmer said. “It’s his signature night and day.”
She claimed her termination was a result of discrimination based on her disability. Additionally, she claimed others were now taking credit for her numerous accomplishments during her employment.
“I received many awards, many grants, and developed many new programs. I was asked to be a speaker at Columbia University in NYC to speak about a training that I developed. I was able to get CASA on the national television show ‘TLC’s Trading Spaces’ and also Oprah Winfrey contacted us about our success,” she said. “I developed and wrote the proposal that allowed us to build the $3.2 million facility. I also developed the thrift store, The Purple Purse.”
Tillman, who briefly served as executive director after Palmer, stated she was in the position for only about four months during the period under investigation. Tillman emphasized her immediate actions upon discovering what she said appeared to be financial irregularities.
“I was only in that position for a couple of months while things began to come to light,” Tillman said. Tillman, who began her tenure as executive director towards the end of 2022, said she was placed on leave by the board members in order for them to begin their investigation in February 2023.
She confirmed that she promptly brought any questionable findings to the attention of the board treasurer and relevant state reporting agencies. “I immediately showed our treasurer, and I have emails and everything to verify that,” she stated, adding that she made “multiple attempts to get ahold of Dr. Armstrong, and he would not respond.”
Tillman said she made significant discoveries related to bank statements and financial reports. She expressed her concern that the board president and the treasurer both received monthly bank statements but seemingly failed to identify discrepancies.
Tillman’s key discovery involved the misrepresentation of certificates of deposit as assets on CASA’s financial reports. She explained that these certificates, which were retirement payments to employees, were still being shown as assets belonging to CASA, even though they had been distributed to individual employees.
This discovery, Tillman said, led to a significant issue where employees had to pay taxes on these retirement benefits, causing widespread “fury.” Tillman noted that this misbilling was evident in the financial reports the board should have been reviewing every month.
Palmer said all financial records, including receipts, invoices and canceled checks, were meticulously maintained, reflecting her commitment to transparency. She further asserts that at the time of her departure, “All of my paperwork, reports, grant requirements, bank statements and every other job aspect were complete and up to date.”
Tillman was particularly critical of the board’s long-standing composition and its perceived lack of oversight. “CASA bylaws state term limits, but Dr. Armstrong and many others remain on the board well past those limits, even to this day,” she said, advocating for a thorough examination of the board’s accountability. “I feel that the board of directors for CASA failed in their duties to oversee the operations of the shelter, and I question how the public can trust that this is an organization worthy of their ongoing support.”
Palmer also mentioned a critical issue related to the bylaws upon her departure. She said the primary concern is with the Arkansas Coalition Against Domestic Violence, which is responsible for overseeing the state’s shelters. Palmer said this organization establishes the policies and standards shelters must follow to qualify for state and federal grants, including VOCA (Victims of Crime Act) and HUD funding.
“CASA had a site visit from them in which they notified the current director at that time that CASA was not in compliance due to the board members being way beyond their term limits and were not abiding by their own bylaws,” Palmer said. She added that several refused to step down, and she was unsure how this affected grant funding.
Palmer claims CASA’s current staff is violating the nepotism policy, which, she said, is a clause in federal grants. However, she declined to elaborate on who was in violation.
The consistent theme from both former directors is that the board’s adherence to and enforcement of the CASA bylaws, particularly concerning term limits and oversight, is a significant factor in the shelter’s current financial predicament.
Regarding the duplicate payroll billing, Tillman acknowledged it was an issue she identified. She attributed this to a new hire responsible for billing, suggesting it was “not intentional” but rather a lack of training. “In the grant world, that’s called double dipping,” Tillman explained, noting that such errors, once identified, require reimbursement.
Tillman also touched upon the reported special account, suggesting, “I believe the special account was the earnings from The Purple Purse that went with the thrift store. They would go into that and then you could transfer it over into the general account.” However, she could not confirm if other funds were systematically siphoned into this account through double-billing, as suspected.
While the State Police investigation is still ongoing, other findings include:
Emergency Solutions Grant (ESG) irregularities: Claims of unsupported payments to individuals, as well as unaccounted bus tickets and unverified classroom furniture.
Payments made to an individual for covid-19 cleaning were flagged due to his wife being a CASA employee.
Claims of an employee being billed through both the VOCA and human trafficking grants.
Checks under the ESG program reportedly signed by unauthorized personnel, including Palmer and Tillman, contravening policy requiring two of three authorized signatories (board president, treasurer, or executive director).
A purchased ice machine and playground equipment remain unaccounted for.
Accusations of former staff writing themselves significant retirement checks, a practice questioned by Tillman, though Palmer maintains it was a legitimate, grant-mandated program.
Instances of Armstrong’s signature reportedly being forged on grant documents.
Questions surrounding the spending of Paycheck Protection Program (PPP) loans, with current staff disputing claims of being paid during covid-19.
A special account used to transfer reimbursed funds from grants, potentially facilitating misappropriation.
Palmer, who led the shelter for over three decades, firmly defended the handling of PPP loans during her tenure. She stated that the funds were “all legal” and crucial for maintaining the shelter’s operations, especially after the closure of their thrift store due to the pandemic.
“There was no money ever spent that was not authorized,” she said, pointing to a previous audit conducted five years prior that found “not one nickel unaccounted for.” Regarding the signatures on checks, Palmer maintained that she and other staff were “authorized to sign the checks” due to a special authorization during the covid-19 pandemic, despite current claims to the contrary.
Tillman also addressed the questions surrounding PPP loans. She acknowledged the accusations and stated she had also questioned the whereabouts of the funds. She highlighted that claims of employees being paid during covid-19 were disputed by staff members who reported being at home and not receiving pay during that period. Tillman believes these claims will be “proven false,” clarifying that during covid-19, the shelter operated with a reduced staff who were expected to work from home. She confirmed receiving her full pay as an advocate during that time.
Concerning check signatures, Tillman explained that when she assumed the executive director role, she was instructed by Armstrong to “work closely with Karen and let her train” her. She stated that as discrepancies came to light, she “shared everything” with the board treasurer. Tillman acknowledged that checks issued under the ESG program bore both her and Palmer’s signatures, noting that policy required two of three authorized individuals (the board president, treasurer or executive director) to sign. She did not explicitly deny signing checks but provided context for her actions within the operational framework she inherited.
The investigation found that an ice machine was purchased but is now unaccounted for.
Palmer stated that the ice machine was located inside a trailer belonging to the CASA Women’s Shelter property when she left. She mentioned that she had been gone for three years and did not know what happened to it afterward. Tillman confirmed that a commercial ice machine was purchased prior to her becoming executive director, but she did not believe it was ever installed during her time. She said her husband and some co-workers picked it up and brought it to the shelter, and it was placed in a trailer on the property. She assumed it was still there when she left.
As far as the past and potential lawsuits involving the former directors, both individuals have shared their experiences and concerns regarding legal actions.
Palmer revealed that she had filed a claim with the Equal Employment Opportunity Commission (EEOC) regarding what she described as her mistreatment, which she attributed to a disability diagnosis. She explained that the EEOC approved her request and “gave me permission to sue them.” However, Palmer chose not to pursue a lawsuit.
“I chose not to because I did not want to harm the organization; it’s like this is my child,” she said.
Tillman also had a lawsuit, and when asked about its outcome, she stated, “Basically, it was at-will.”
Palmer said she is unaware of any other accusations, but said she rests easy knowing she did nothing wrong. “I loved my job and excelled at it,” she said. “I wish CASA all the best.”
Jefferson County Prosecuting Attorney Kyle Hunter indicated that the State Police investigation into claims of financial mismanagement is ongoing, and no findings have been submitted to him yet.