Nassau audit finds financial irregularities at Bethany House

Bethany House, a Baldwin-based nonprofit that helps homeless and abused women, made questionable and excessive payments to staff, including its founder, and repeatedly violated state nepotism laws, according to a new audit by the Nassau Comptroller’s Office.

The 42-page report found a pattern of financial irregularities and poor oversight by Bethany House, which runs homes for women and children in Roosevelt, Baldwin and Bellmore.

Sister Aimee Koonmen, who founded Bethany House in 1978 along with two other Dominican Sisters of Amityville, was paid more than $160,000 in stipends without proper documentation and made $35,000 in payments to Bethany House board members, staffers and relatives, also without explanation, auditors found.

When Kathleen Ryan, hired as the nonprofit’s executive director, raised concerns about the spending practices, she was terminated, the audit said, with the nonprofit arguing she lacked an understanding of Bethany House’s “mission and core values.”

“Our investigations team discovered a series of troubling findings, ranging from lack of oversight to nepotism to questionable cash payments and co-mingling with personal funds,” said Nassau Comptroller Jack Schnirman.

In its audit response, Bethany House’s new leadership said it reformed its financial practices, implementing a biometric timekeeping system to validate hours, reducing or eliminating stipends and ceasing cash payouts.

“We take the issues raised in the Office of the Nassau County Comptroller’s Limited Review for the years covering 2017-2018 very seriously,” said Katherine Heaviside, a Bethany House spokeswoman. “We have worked cooperatively with the comptroller’s staff and have fully resolved each of the audit recommendations.”

Sister Aimee Koonmen did not respond to repeated requests for comment.

“The Sisters of Saint Dominic of Amityville and the Board of Directors of Bethany House are in full cooperation with the Nassau County Comptroller’s Office,” Sister Peggy McVetty, the prioress of the Sisters of St. Dominic, said in a statement. “We continue to support the mission of Bethany House.”

Koonmen hired her nephew, Brian Koonmen, to serve as chief operating officer, the audit said. He was paid $186,570, despite working only a part-time schedule, and given a Bethany House vehicle, according to the audit, which covered 2017 and 2018.

“There’s nothing to hide here and nothing has been done wrong,” said Brian Koonmen, who declined to comment about the specific allegations.

Auditors found other violations of the state Nonprofit Revitalization Act, including $9,250 in payments to another unidentified relative of Koonmen and a $76,000 fundraising contract to the niece of a Bethany House board member.

On Aug. 23, as investigators were completing the audit, the board directed Koonmen to move out of the Bethany House residence, demoting her to an honorary nonvoting board member, the audit said.

Bethany House began in 1978 when Koonmen and the two other Dominican Sisters rented a small house in Roosevelt for $275 a month and opened it to the homeless. The name comes from the biblical village where Martha and Mary took care of Jesus’ food and emotional support.

More than four decades later, Bethany House has expanded to five buildings. In 2019, it provided 26,052 nights of shelter and assistance to 571 families, including 720 children, according to its annual report.

Bethany House receives the bulk of its funds from the U.S. Department of Housing and Urban Development, which are distributed to it through Nassau’s Department of Social Services. The remainder of its funding comes from donations and grants.

Newsday Charities was among Bethany House’s donors, providing a $25,000 grant in the 2019 fiscal year, according to the charity’s annual report.

“As part of our efforts to alleviate homelessness on Long Island, Newsday Charities has been among many donors to Bethany House,” said Newsday spokeswoman Kim Como. “With all funding, Newsday Charities requires a detailed description by the organization of how the funds will be used, and a follow-up report after the funds are disbursed.”

Auditors found $160,000 in stipends issued to Koonmen through checks she signed herself that were not reported to the IRS. The checks were deposited into an account in the name of the Religious Order but that served as Koonmen’s personal bank account, auditors said.

Koonmen receives a fixed monthly stipend for living expenses and a second monthly stipend as reimbursement for weekend hours and overnight shifts.

“Auditors were unable to verify the days/hours worked to justify the additional compensation received in the form of a stipend,” investigators said.

Bethany House said Koonmen’s stipend has been reduced and will terminate at year’s end.

Auditors also found improper cash disbursements, paid with charitable funds, including pet food, animal hospital bills, flowers, movie tickets and genetic testing kits. Petty cash was used to pay for Christmas gifts, meals and public relations, the report said.

Ryan, who was hired as executive director in March 2018, said the audit “only skims the surface” of financial issues at the nonprofit.

“It was quite apparent to me that there were no constraints on the spending,” said Ryan, of Rockville Centre. “There was no checks and balances … And when I brought my concerns to the board I was answered with a termination.”

Another executive director, hired in April, resigned four months later “due to activities contrary to other nonprofits” that she worked for, the report said. The board chair and two other board members also resigned.

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