O.C. demands money back from group linked to Supervisor Do's daughter

Aug. 6, 2024 3 AM PT

Orange County is demanding that a nonprofit group linked to a county supervisor’s daughter return millions of dollars awarded in county contracts.

The demand, outlined in letters issued to the nonprofit in late July, comes after Viet America Society failed to prove to auditors and the county how it spent the money, or that it had done the work it was hired to do: feeding needy seniors during the pandemic.

In the letters reviewed by the Los Angeles Times, Orange County told the group to return $2.2 million by Aug. 26 after the organization missed a June deadline to complete an audit of its work and expenditures. The money originally came to the county as federal COVID-19 relief funds.

An attorney for the nonprofit, Sterling Scott Winchell, said it wasn’t clear how VAS would respond to the county’s demand for reimbursement.

“It was a surprise that they did that,” Winchell said. “This was kind of a real power play on the part of the county, and it came out of nowhere. And I think it was unnecessary.”

The county’s move came days after the company VAS hired to do the audit, Pun Group, told county officials during a meeting that the nonprofit “would not be able to provide sufficient information to properly complete the audit,” according to the letters.

Pun Group’s senior auditor told the county during the meeting July 23 that VAS “lacked internal controls, did not follow federal uniform guidelines,” and it did not have the necessary records to assemble an audit trail. The senior auditor also told the county that Pun’s forthcoming audit report was expected to outline a lack of records and “internal control failures.”

But the audit report was not completed, and the day after the meeting, VAS terminated its contract with Pun Group.

“VAS’s decision to terminate the Pun Group undermines the County’s extensive efforts to determine VAS’s performance under the terms of the Contract,” reads one of the letters from the county, addressed to VAS Chief Executive Peter Pham and Winchell. “The expenditures are hereby determined to be disallowed and are subject to reimbursement to the County.”

Pham did not immediately respond to a request for comment.

The letters demand the group reimburse the county nearly $2 million for payments made as part of a contract for fiscal year 2021-22, as well as $200,000 for payments made as part of a second contract from fiscal year 2020-21.

The county’s demand that VAS return money was first reported by LAist. The news organization has also reported Orange County Supervisor Andrew Do directed or voted to direct as much as $13.5 million to the nonprofit without disclosing that his 22-year-old daughter, Rhiannon Do, was connected to the group.

Do’s failure to disclose his daughter’s role in the group is not against the law. A bill that would forbid the practice of local officials voting on contracts that would benefit family members is currently being considered by state legislators.

Rhiannon Do had at one point been listed as an officer on government filings for the organization, and had reportedly signed a contract that listed her as president.

Rhiannon Do could not be reached for comment. Andrew Do did not immediately return requests for comment.

Winchell told The Times in an interview Monday that Do’s daughter had not had a leading role in the organization.

“She was just working there doing meal plans,” he said, but added that the college student had “signed some documents on behalf of the company.”

He said she left the group sometime before February this year.

Winchell said VAS is weighing its options.

“The county doesn’t seem to be interested in talking to us,” he said.

Winchell confirmed Pun Group’s contract was terminated after the July 23 meeting with the county and VAS officials, but called it a mutual decision. He said that VAS officials were concerned about how Pun Group described the status of the audit, and that Pun Group officials were concerned about their ability to maintain independence.

According to the letters, county officials had raised concerns not just about records VAS had failed to provide the county but also about questionable transactions in documents that were provided. General ledgers from May 2021 to May 2022, for example, “included unexplained transactions that raise concerns of potential commingling of funds and questionable costs.”

The county also alleges performance reports submitted by VAS were “revised multiple times and the credibility of the reports submitted are questionable.”

At one point, the county alleges in the letters, VAS officials reported they were providing 20,000 meals per month, but later revised the number to 10,000 meals a month without documenting who participated in or dropped out of the program.

In another instance, the county alleges that it received from VAS a list of 900 participants in the program and checked a sample of 300 names. Only 49 people, or 16% of the sample, confirmed they were taking part in the program.

The county also found duplicated participants and others who could not be confirmed.

“Performance standards, budget summary, and deliver reports could not be confirmed,” one of the letters reads.

Winchell said there have been concerns about how VAS maintained its records but disputed the county’s characterization in its letters.

“The documentation could have been better,” he said.

He said VAS hired another local company after Pun Group was terminated to audit its financial records, and it plans to share the results of that audit in about two weeks.

He declined to share the name of the company that was hired. He said he did not know if VAS had notified the county about the new company, or if VAS had contacted the county after the letters were delivered.

When asked how this new company would be able to complete an audit in four weeks that Pun Group couldn’t finish in three months, he said he was unfamiliar with how the new company would proceed. He said he was not sure if the new company had the same concerns about the lack of documentation that Pun Group had.

The company could continue the work where Pun Group left off, or start anew, he said.

Winchell said VAS officials were unaware of the “intense accounting” that would be required from their work, and said county officials had “shared blame” for their lack of oversight of the work.

“The county sat on its hands for several years and all of a sudden decided their hair is on fire,” he said. “If this was so important, they would have asked, ‘Where is this?’ and ‘Where is this?’”

He said his clients were not aware of the federal requirements they were expected to maintain, but conceded the requirements were outlined in the contract with the county.

“They’re service people that didn’t have counsel, didn’t have accountants and weren’t really told by the county what it would have entailed,” he said.

He also dismissed concerns about Do’s role directing county money to an organization linked to his daughter, calling her part minor.

VAS will make a decision on what to do after the audit is completed, he said. Despite the concerns about documentation, he said the organization did the work it was paid to do.

“In theory they can pay it back,” Winchell said. “Whether they’re going to is another story.”