The Fresno Economic Opportunities Commission board voted Monday to hire a Minneapolis firm to do a forensic audit to determine how a multimillion-dollar operating deficit developed.

The forensic audit will examine the spending in 2023 and 2024 of the transportation, food services, and administration programs because they had the biggest deficits, along with Head Start. Wipfli, the firm awarded the $123,250 contract, was one of three bidders. The timeline for completion of the audit is 10 weeks.

Assemblymember Joaquin Arambula, who replaced his mother, Amy Arambula, on the Fresno EOC board last fall, highlighted the agency’s deficit spending when he called for a forensic audit. He said the agency had been “hemorrhaging” money, depleting its reserves in recent years, and potentially jeopardizing its future.

But at Monday night’s board meeting Interim CEO Brian Angus, who was named in December to head the anti-poverty organization after the board decided not to renew CEO Emilia Reyes’ contract, reassured the board that the agency’s finances include a healthy real estate portfolio.

Angus, who has been engaging in cost-cutting that includes staff layoffs, said that the agency’s real estate is valued at $83 million. It includes the downtown headquarters on Mariposa Street.

“I put it in front of you to alleviate any idea that this agency was ever in any danger of going out of business,” he said. “We may have been in danger of selling off some properties, but we were never in danger of not being around in 10 years.”

Net Deficit Kept Growing

Fresno EOC, which oversees programs such as Head Start, the Local Conservation Corps, and WIC, began depleting its budget reserves several years ago when expenditures started outpacing revenues. Commissioners were notified as early as 2022 of net deficit spending. Angus was hired by the board to stem the red ink and rebalance revenues and expenditures.

Related Story: When Did Fresno EOC Finances Start Their Downhill Plunge?

Head Start is one area where the agency has seen shrinking revenues due to decreased enrollments. Last month, Angus told the board of the need to close several centers due to smaller enrollments.

“Those decisions weren’t made because of a reduction in budget. Those decisions were made because we couldn’t keep the site fully enrolled,” Angus said Monday. “And Head Start tells us if you don’t keep it at 95% enrolled, we’re going to take the money away from you.”

The agency’s Head Start program, which provides early education to underserved children, is competing with school districts that are getting state funds and encouragement to develop transitional kindergarten classes.

“It’s California telling Golden Plains (school district) that you need to serve 4-year-olds and Golden Plains going out and bringing kids into their school system, and those are the same kids we were serving before,” Angus said. “And so there’s only so many kids and there’s now two school systems and Head Start all competing for the same kid.”

Related Story: Will Fresno EOC Board Order Forensic Audit of Troubled Finances?

Erasing DEI Language

Head Start also is telling Fresno EOC and other agencies that provide childhood education services that they need to stop DEI training immediately in light of the recent presidential order, Angus said.

He had proposed revising the agency’s job descriptions to remove any language that refers to diversity, equality and inclusion in the expectation that President Donald Trump’s executive order to discontinue DEI could extend to that as well.

Board members continued to question whether the commission needed to take such draconian steps at this time, but after more discussion they approved a motion by board member Debra McKenzie to strike DEI language from job descriptions and also to work with staff to replace it with language that will reflect the agency’s values.

Several board members expressed their dissatisfaction and even anger in having to make the change but recognized that Fresno EOC could not run the risk of losing federal funding over the issue.

“I don’t question us rewording anything. I question us changing our fundamental practices because of a weaponized word, that’s what I question,” commissioner Alysia Bonner said. “Although, once again, I understand we get federal funds but it’s almost like we’re taking part (in) the lunacy that’s kind of going on in the world when we do this. We are silently saying we are agreeing with it.”