Judge orders receiver to take control of One Church One Family finances

Lansing State Journal

LANSING – A judge on Wednesday afternoon ordered receiver Thomas Woods to take financial control of One Church One Family, a troubled charity that received hundreds of thousands of dollars in city and federal funding.

The city of Lansing filed a complaint in Ingham County Circuit Court late last month, seeking a takeover of the nonprofit. OCOF's mission is to provide free and low-rent housing to families in need.

Scrutiny of One Church One Family began months before when the city hired external auditors to investigate financial irregularities in Lansing's Human Relations and Community Services Department, which was then led by Joan Jackson Johnson.

At the time, Johnson also held leadership roles in OCOF. The auditors found Johnson may have sought to "conceal" financial mismanagement because she approved the disbursement of city funds to OCOF without properly disclosing her conflicts of interest.

In its complaint, Lansing asserted leaders of the nonprofit failed to document how they spent more than $240,000 in grants they received through the city. Lansing's attorneys also zeroed in on inaccurate records that the charity had filed with the state. In some cases, the state records listed leaders of OCOF who denied their affiliation with the charity.

"We need some accounting of where those dollars went," Smiertka said. "The important thing is that we have accountability and that those families have housing. We don't want anyone out on the streets."

More: Lansing faces $7M general fund shortfall, including $2.5M in IRS fines

Judge Joyce Draganchuk agreed with the city, finding that OCOF failed to follow generally accepted accounting principles and violated the terms of its contract with Lansing.

Draganchuk's order enables the receiver to take control of OCOF's records and all its properties. That includes nine single-family homes.

No One Church One Family representatives showed up to Wednesday's court hearing to contest the receivership.

The case remains open, with Woods expected to give ongoing updates to the court. That includes monthly receivership reports.

More: Audit finds mismanagement, conflict of interest in HRCS department

It's difficult to gauge how long the receivership will last, Smiertka said, adding it depends on the ease of obtaining records and the charity's level of cooperation.

Johnson, who is not named in the initial complaint, could not immediately be reached for comment. She retired from the city this month and Lansing Mayor Andy Schor has appointed Kim Coleman as the city's new director of Human Relations and Community Services.

Lansing forwarded the audit of its HRCS department to the Michigan Attorney General's Office, which in turn forwarded the information to federal authorities.

Among other findings, the report determined Johnson misused city resources, such as an office and a Lansing receptionist, for her work with OCOF.

In all, the city paid at least $1.38 million over multiple years to entities in which Johnson had a conflict of interest, according to the audit. In many cases, Johnson did not properly disclose how she or her family members were involved with charities that received funding through her city department.

The Lansing State Journal successfully appealed for the release of the audit in January after the City Attorney's Office initially denied the newspaper's Freedom of Information Act request for the documents.

Contact reporter Sarah Lehr at (517) 377-1056 or slehr@lsj.com. Follow her on Twitter @SarahGLehr.