Sunshine Grant Funding Documentation

Evanston Official Pocketed almost $84,000 in City Grant Funding to Fundamentalist Religious Group

Grant Funding Paid to Elected Official 2017

2017 Total Grant Paid by City: $65,000
2017 Salary to Ald. Simmons Per Grant: $45,404

Grant Funding Paid to Elected Official 2016

2016 Total Grant Paid by City $147,500
2016 Salary to Ald. Simmons Per Grant: $38,333


Date Appointed as Evanston Official

June 2015

Code of Ethics: Applicable to all City officers or employees of the City, whether elected or appointed, paid or unpaid, including members of boards and commissions appointed by the City Mayor or City Council


Date Hired as Independent Contractor

September 2015

Date of City-Sunshine Agreement for 2016 Grant Funding

December 2015

Date Hired as Staff by Sunshine Gospel Ministries

January 2016

Official’s Employee Payroll Budgeted through Funding

2016 100% Payroll Budgeted to Grant
2017 100% Payroll Budgeted to Grant

Prohibition of Appointed & Elected Officials’ Financial Gain through City Grant Funding

§ 570.611 (b) Conflicts Prohibited. No persons who exercise or have exercised any functions or responsibilities with respect to CDBG activities assisted or who are in a position to participate in a decision making process or gain inside information with regard to such activities, may obtain a financial interest or benefit from a CDBG-assisted activity, or have a financial interest in any contract, subcontract, or agreement with respect to a CDBG-assisted activity, and shall cover any such financial interest or benefit during, or at any time after, such person’s tenure.
(c) Persons covered. The conflict of interest provisions of paragraph (b) of this section apply to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the recipient, or of any designated public agencies, or of subrecipients that are receiving funds under this part. Housing and Urban Development Code of Federal Regulations

§ 1-10-4 Prohibited: Incompatible Employment. No public officer or employee shall engage in or accept private employment or render services for private interests when such employment or service creates a conflict with or impairs the proper discharge of his/her official duties, or would to a reasonable person appear to create such conflict or impairment. Acquisition Of InterestNo public officer or employee shall purchase, receive or accept any financial interest in any sale to the City of any service or property. Evanston Municipal Code.


Minimum Public Benefit Standards

Economic Development Projects

Standards for evaluating public benefit. The grantee is responsible for making sure that at least a minimum level of public benefit is obtained from the expenditure of CDBG funds under the categories of eligibility governed by these guidelines. 

“The recipient must ensure that the appropriate level of public benefit will be derived pursuant to those guidelines before obligating funds under this authority.” – HUD Special economic development activities § 570.203 

If the amount of CDBG assistance exceeds $50,000 activity per full-time equivalent, permanent job created or retained…itmay under no circumstances be be assisted with CDBG funds. – § 570.209 Standards for Individual Activities
“The grantee [the City of Evanston] must maintain sufficient records to demonstrate the level of public benefit, based on the above standards, that is actually achieved upon completion of the CDBG-assisted economic development activity(ies) and how that compares to the level of such benefit anticipated when the CDBG assistance was obligated. – § 570.209 Documentation Requirements

The use of the standards for public benefit is mandatory.

(1) Standards for activities in the aggregate. Activities covered by these guidelines must, in the aggregate, either:

(i) Create or retain at least one full-time equivalent, permanent job per $35,000 of CDBG funds used ($50,000+ is prohibited under any circumstances);

No jobs were created or retained through CDBG grant funding, according to the City’s 2016 and 2017 CDBG Performance and Evaluation Reports.

or

(ii) Provide goods or services to residents of an area, such that the number of low- and moderate-income persons residing in the areas served by the assisted businesses amounts to at least one low- and moderate-income person per $350 of CDBG funds used ($1,000+ is prohibited under any circumstances).


Per Beneficiary Maximum For 2016

Funding for 54 beneficiaries was at least $93,500 over the prohibited limit.

Sunshine reported 54 low- to moderate-income beneficiaries in 2016, allowing funding up to $18,900, with assistance over $54,000 prohibited. No qualifying documentation was provided. (Documentation requirements)

Actual City funding to Sunshine in 2016 was $147,500.
2016 Total Grant Paid by City $147,500

Per Beneficiary Maximum 2017

Funding for 39 beneficiaries was at least $26,000 over the prohibited limit.

Sunshine reported 39 low- to moderate-income beneficiaries in 2017 (30 from Evanston), allowing funding up to $10,500-13,650, with assistance over $30,000-39,000 prohibited.

Actual City funding to Sunshine in 2017 was $65,000.
2017 Total Grant Paid by City: $65,000

No documentation substantiating qualifying beneficiaries was provided by Sunshine for either year, per unredacted City records. (Documentation requirements)

Federal Documentation Requirements. The grantee must maintain sufficient records to demonstrate the level of public benefit, based on the above standards, that is actually achieved upon completion of the CDBG-assisted economic development activity.


2016-17 Failure of Grant Disbursement Reduction based on Resident Participation

If Grantee enrolls less than 75% of Evanston based business as participants in the cohort, the funding for that cohort will be reduced proportionally.


*According to unredacted City records of Sunshine Reports

Winter 2016 Cohort had 59% qualified resident-based businesses, requiring $8000 reduction in funding for a proportional resident maximum of $42,000.

Winter 2016 Cohort:

Winter 2016 Cohort had 59% resident-based businesses qualified, requiring a 16% reduction in funding for a proportional resident maximum of $42,000.

29 total participants*

17 participants/businesses list Evanston addresses*

2 participants/businesses listed with non-resident addresses counted as Evanston-based. No further residency documentation provided. (Documentation requirements)


Spring 2016 Cohort:

25 total participants*

15 participants/businesses list Evanston addresses*

3 participants/businesses listed with non-resident addresses counted as Evanston-based. No further residency documentation provided. (Documentation requirements)

Spring 2016 Cohort had 60% resident-based businesses qualified, requiring a $7500 (15%) reduction in funding for a proportional resident maximum of $42,500. (See above roster for first half of Spring 2016)

City 2nd disbursement for Spring 2016 Cohort = $22,500. Total Spring Disbursement = $47,500

Fall 2016 Cohort:

21 total participants*

11 participants/businesses list Evanston addresses*
(including 2 residents previously accounted for from winter 2016 cohort)

Fall 2016 Cohort had 52% resident-based participants/businesses qualified (including 2 residents already accounted for from cohort), requiring a $7500 (23%) reduction in funding for a proportional resident maximum of $38,500.

City disbursement for Fall 2016 Cohort = $50,000. Overpayment of $11,500

Spring 2017 Cohort:

18 total participants*

13 participants/businesses list Evanston addresses*

1 participant/business listed with non-resident addresses counted as Evanston-based. No further residency documentation provided. (Documentation requirements)

Spring 2017 Cohort had 70% qualified resident-based businesses, requiring $1250 reduction in funding for a proportional maximum of $21,250. ($25,000 budgeted each for 3 2017 cohorts.)


Summer 2017 Cohort:

15 total participants*

5 participants/businesses list Evanston addresses*

1 participant/business listed with non-resident addresses counted as Evanston-based. No further residency documentation provided. (Documentation requirements)

Payment for Summer 2017 Cohort

2017 Failure of Grant Disbursement Reduction based on Per Student Maximums

Disbursements shall not exceed $1,250 per student

 

 

Fall 2017 Cohort:

Sunshine reported 10 students enrolled in the Fall ’17 cohort, allowing maximum per student disbursement of $12,500. The City disbursed $25,000, twice the per student maximum.

10 participants in 2017 Fall Cohort

 


Spring 2017 Cohort:

Sunshine reported 18 students enrolled in the Spring ’17 cohort, allowing maximum grant disbursement of $22,500. The City paid Sunshine $25,000, $2500 over maximum.

18 participants in Spring Cohort


Failure to Report Gross Income*

*Per unredacted City records

Sunshine failed to report gross income* of $30,750 (less financial aid), based on enrollment reported on Sunshine invoices and the program’s $250 student registration fee and for any other fees charged.
“Program income shall herein be defined as gross income received by the SUBRECIPIENT directly derived or generated from the use of CDBG funds. Program income includes, but is not limited to: …Fees for services performed.” – 2016-2017 Funding Contracts (part XXI).


Overstatements and Discrepancies in Program Enrollment

See Documentation & Reporting Compliance

2017 Beneficiary Report
Spring 2017 Cohort
Summer 2017 Cohort
Fall Cohort 2017

Cohort 1 & 2 – Spring & Winter 2016
Cohort 2 & 3 – Spring & Fall 2016

 

 

 

 

 


HUD Documentation & Reporting Compliance

Mandatory, but not provided, in Sunshine Reports to the City, per unredacted City Records:

  • Compliance with HUD Standards for Evaluating Public Benefit
  • Sufficient source documentation to show the actual use of the CDBG funds” required by the OMB Circular to justify all per recipient expenditures of CDBG Federal Assistance.
  • Documentation to demonstrate activity benefit to exclusively qualifying persons.
  • Qualifying documentation to demonstrate compliance with CDBG’s national objectives, either individually or in aggregate
  • Monitoring Standards
  • Program Income Reporting
  • Per Recipient Expenditures

PERFORMANCE & GENERAL COMPLIANCE

“SUBRECIPIENT commits to the program goals, including the number of people to be served, number of participants who are expected to be Evanston residents and who are expected to meet HUD definition of low-or-moderate-income-persons, and outcome measures as outlined in Appendix A.” – 2016-2017 Funding Contracts (part XXI)



 

 


HUD Compliance in Funding to Religious Organizations

HUD requires religious organizations to disclose their religious character and make reasonable attempts to refer alternate provider services to beneficiaries who object to that religious character.

 


Duplication of Residents as New Beneficiaries


Ineligible Program Costs


Religious Organization

Sunshine’s collection of legal, organizational, operational, mission and purpose statements disclose that all Sunshine Gospel Ministries activities are related to and intended to further the organization’s religious component.

Sunshine’s Doctrinal Statement

“We believe that the Bible is the inspired, infallible, inerrant word of God”

Sunshine’s Bridgebuilder program mission

Unlawful Use of Unregistered, Unfiled Trade Name

805 ILCS 405 Assumed Business Name Act: No one may conduct or transact business in Illinois under an unregistered assumed name, corporate or otherwise.

According to the Illinois Secretary of State and IRS, Sunshine Gospel Ministries d/b/a Sunshine Enterprises was not licensed or registered to operate in Illinois. Sunshine Gospel Ministries also did not register “Sunshine Enterprises” with the state, or file for use of “Sunshine Enterprises”on its federal tax returns as an operating, dba or tradename,

All City Contracts with Sunshine were made with Sunshine Gospel Ministries d/b/a Sunshine Enterprises.


Incorporation as Chicago’s Sunshine Ministries, Inc.


Continuance of of City’s Invoices Under Sunshine Gospel Ministries


Promotion of Anti-LGBTQ+ Work

Sunshine’s Executive Director Hamernick has promoted anti-LGBTQ works and authors associated with Moody Bible Institute.


 Disclosure on Homosexuality & Pledge

As of February 2018

Participation in Grant Funding Requests & Committees

Entities Doing Business With The City. Regardless of prior disclosure thereof, no officer or employee shall have a financial interest, direct or indirect, personally or through a member of his/her family, in a business entity doing or seeking to do business with the City and influence, or attempt to influence, the selection of, or the City’s conduct with regard to such business entity.

CDBG Participation: Housing & Community Development Act Committee


Failures to Redress

Documentation. The grantee must maintain sufficient records to demonstrate the level of public benefit, based on the above standards, that is actually achieved upon completion of the CDBG-assisted economic development activity(ies) and how that compares to the level of such benefit anticipated when the CDBG assistance was obligated.

If the grantee’s actual results show a pattern of substantial variation from anticipated results, the grantee is expected to take all actions reasonably within its control to improve the accuracy of its projections. If the actual results demonstrate that the recipient has failed the public benefit standards, HUD may require the recipient to meet more stringent standards in future years as appropriate.


Ineligible Program Costs

APPENDIX E: INELIGIBLE PROGRAM COSTS Ineligible Costs include:

2.      Fund raising Costs


Program Administrative Costs

GENERAL COMPLIANCE WITH APPLICABLE LAWS 
Sunshine’s program administrative costs exceeded the the maximum allowed by 65.8 percent ($97,057)*,  and no less 55 percent ($51,000).
*Based on the pro-rata actual salary reports and time & effort certification assumptions submitted by Sunshine. Sunshine’s Grant Support Worksheets don’t break down Planning & Administrative Costs vs. Activity Delivery Costs, which aren’t included in 20 percent P&A cap.

CDBG National Objectives

“An activity that does not meet a national objective is not compliant with CDBG requirements and may be subject to remedial actions.” – HUD, Office of Block Grant Assistance, 3-1.