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MIFFLINTOWN - A chain of events that began in December 2003 with the former executive director of Juniata County Child Care and Development forging meeting minutes to obtain a loan for the non-profit organization could have an unforeseen impact on local child care providers.

The most recent issue that arose is the Pennsylvania Department of Labor and Industry has blocked the release of grant funding that is used for, among other things, to subsidize child care services for low-income families in Juniata County.

State Rep. Adam Harris, R-Mifflintown, said the funds have been blocked because of an unemployment compensation dispute with the Pennsylvania Department of Labor and Industry, which arose out of the 2005 court case against the former JCCCD executive director and the mismanagement of grant funds.

Harris said employees fearing the organization was about to fold filed unemployment compensation claims and the Department of Labor and Industry paid out those claims. However, they then switched the status of JCCCD from "reimbursable to contributory," which means the non-profit organization is now treated as if they were a for-profit business, which must pay into the state's unemployment compensation fund.

Harris said the issue will probably end up in the commonwealth court and he anticipates JCCCD will eventually prevail, because there is similar case law that serves as an established precedent.

In the meantime, Harris said if the funds are not released soon, many of these child care providers may be forced to close their doors.

Harris said he and state Sen. Jake Corman, R-Bellefonte, along with their staff members have been working hard to end this impasse and have been in contact with the Department of Labor and Industry and the governor's office.

Corman said after meeting with Labor Industry representatives and speaking with the Juniata County Commissioners, a compromise was reached, which will allow the commissioners to take over the payment process to distribute the grant money.

Corman said there are still some issues to work out and the "ink has not dried" on the proposal, but it appears this will, at least for the time being, allow for the distribution of funds to continue.

Child care impact

One of the estimated 25 child care providers that this affects in Juniata County is Sonbeam Early Learning Center in McAlisterville.

Sonbeam Director Gabby Fisher said she wasn't exactly sure what will happen if the grant funding is not released, but the day care center is bracing for the worst.

"Our board meets on Wednesday and I know this will be a major topic of discussion," Fisher said.

"We are really looking at not being able to serve low-income families," she said of the government subsidies Sonbeam depends on to pay for a portion of the child care costs for 23 out of the 40 children enrolled at the center. "That is a huge amount of our budget."

Fisher said she thinks the block in funding can be traced back to an unemployment compensation issue with JCCCD, which frustrates her because the issue has nothing to do with Sonbeam or the current JCCCD board of directors.

"Before the JCCCD can receive payment, they must enter into a contract with the Department of Public Welfare. To receive that contract, the JCCCD must obtain a tax clearance certificate from the Department of Labor and Industry. We are working with the JCCCD, and their local legislators, to help them resolve an ongoing unemployment tax issue that would permit them to receive that tax clearance certificate," Department of Labor and Industry Spokesman Troy Thompson said.

At a Juniata County Commissioners meeting on Tuesday morning, Fisher said the Department of Public Welfare told her that the commissioners were given several options to resolve the crisis, but the board has not taken action on those decisions.

"This is a critical time," Fisher said. "They could close my center any day."

Commissioner Jeffrey Zimmerman replied that the "comments from DPW may not be entirely accurate. He said "by noon (Tuesday), there should be a letter from the commissioners for DPW" to request funding for the agency.

"We are working as we speak to get the cash flowing," Zimmerman said.

Corman and Harris have been talking with the commissioners to develop a solution to the funding block, Zimmerman said. However, the legislators have seen little progress during the past two weeks, he said.

Currently, the commissioners have developed a short-term proposed solution that would bring funding from the Department of Public Welfare through Juniata County to the child care centers, Zimmerman said.

"We will cut the checks by working with the agency," Zimmerman said. "That's what our plan is at this point."

Through the temporary solution, funding could begin to flow as early as Nov. 30, said Commissioner Dale Shelley, noting information from DPW.

To ultimately bring funds back to the centers, DPW has given the commissioners three options to choose, Commissioner Teresa O'Neal said. She suggested the board schedule a time to discuss the options right after Thanksgiving.

The commissioners must have a decision ready for when the court rules on the issue, Shelley said.

Fisher said, "I appreciate that a decision has been made, and I hope we will continue to work toward a permanent solution."

Former JCCCD Director Edward Jamison's role

Jim Hartzell, the current JCCCD Board president, said the block in funding for the child care providers is directly related to the legal issues that continue to arise because of something a former executive director did in December 2003, which involved forging documents to obtain a bank loan.

Edward Jamison, of McAlisterville, was accused of altering the minutes of a JCCCD board meeting in December 2003, to authorize himself to take out a $100,000 line of credit through a local bank.

All the money obtained through the line of credit was used for the Head Start agency, according to court documents. The line of credit was paid off using grant money received in 2004, documents indicate.

Jamison told police he came up with the idea to secure a line of credit after he was told the agency was out of money in late 2003, police said. Jamison resigned from his position shortly thereafter, in March 2004.

Hartzell said the credit line at the bank was paid off using federal grant money, after Jamison resigned. The grant money could not be used to pay off a credit line, according to court documents.

According to court documents, after Jamison resigned from his position, he called the JCCCD and told a staff member to repay the bank loan using the grant money.

Jamison pleaded guilty in September 2006 to forgery, and he was given a probationary sentence and ordered to repay around $90,000 in restitution.

Hartzell said that in 2005, the former board members resigned and the decision was made by a new board to continue serving the community under the name JCCCD.

Hartzell said legal counsel advised the new board that they would not need to establish a new agency, but now it appears that may not have been the best decision in light of all the ongoing legal issues associated with the former board.

Employees and Feds file federal law suits

Hartzell said Jamison's actions in 2003 have created one legal problem after another, directly leading to some of the Head Start employees filing a lawsuit in 2007 and the federal government filing a lawsuit against the former JCCCD board and board president in June 2008.

Approximately 31 employees filed the lawsuit, which claimed they had incurred losses of more than $75,000 because they were not paid for the month of January 2005. A judgment has not been issued in this case, according to court documents, however, Hartzell said Jamison has been making monthly repayments to the employees.

"Unfortunately, they are unwilling to accept monthly payments," Hartzell added.

The other lawsuit filed against the former JCCCD board was done so on behalf of the government through the U.S. Attorney's office.

According to court documents, the former JCCCD board headed by Carolyn Malfara owes the Department of Health and Human Services more than $130,000, which is a combination of the $90,000 grant money used by the nonprofit to repay the credit line from the bank, plus the interest accrued during the last several years.

Documents indicate the court ruled in favor of the DHHS and found the former JCCCD board has to repay the more than $130,000.

Hartzell said if the money is not paid back by the former board, the obligation could then fall to the current board.

Current JCCCD official statement

"The Community needs to be aware that this issue stems back to Jan. 2005, when the Head Start program's grant was relinquished, due to a former Executive Director forging minutes to acquire a line of credit for $100,000 to cover the fact that the grant was over extended. When the line of credit needed to be repaid, it became obvious that the Head Start program was short of funds.

"By this time the Executive Director had resigned and the Acting Director did everything he could to salvage the program, but still fell short of funds so that there was no funding for the month of January 2005. The grant was relinquished, and the board members all resigned.

"The very next day CDI, an agency with Head Start, came to take over the Head Start Program and all the Head Start employees retained their employment. The two remaining programs under Juniata County Child Care: Teddy Bear Daycare and the CCIS (Child Care Information Services) program which operates subsidized child care for the county were left floundering until we were able to form a new board of directors and continue with our services. The Head Start Program under CDI remained in the same building and after one year was taken over by a new grantee, the Tuscarora Intermediate Unit 11.

"In the summer of 2005 quite a few of the Head Start employees signed up for unemployment compensation, and received payments, which the current board has been appealing based on theses employees being seasonal/educational employees. Appeals are still pending. The current board is also dealing with two other issues, which involve the Head Start employees, which also have nothing to do with this (current) board.

"The community needs to be aware of how long reaching the actions of one person can be an how unfair it is when programs that had nothing to do with the Head Start Program, other than they had the misfortune to be under the same agency. This block on the CCIS's grant monies has been the final straw, as the CCIS and the providers were already struggling with no funding due to the budget impasse, only to discover that once the budget was finally passed that Labor and Industry had placed a block on our funding as of September. The providers have not been paid for September and October, the CCIS staff has not been paid either and vendors will not be able to be paid.

"Juniata County Child Care is a very small non-profit agency that continues to pay the price for others actions. It is the unfairness of it all that is very hard to accept."