SALT LAKE CITY -- A former state lawmaker may have taken more than $88,000 in fraudulent payouts from two Utah nonprofit groups that he oversaw or advised, according to a new state audit. One of those nonprofits -- anti-gang program Colors of Success -- was discontinued by the Ogden School District in June.
The audit also alleges former Rep. Duane Bourdeaux, D-Salt Lake City, attempted to stymie an investigation by the state auditor's office into the financial practices of the organizations Colors of Success and the Center for Family Development.
Bourdeaux is CEO of Colors of Success, a program that seeks to curb gang problems and high dropout rates among youths of color. It was founded at a Salt Lake City high school in 1989.
In June, the Ogden School District decided to discontinue using Colors of Success as its anti-gang program. At that time, Superintendent Brad Smith said he repeatedly tried to get information from Colors about data about the overall effectiveness of the program, but to no avail.
Smith said he also had concerns with the noncompete clause that employees had to sign, since their main source of payment to employees comes from government entities, but he was not able to get any extra information on that, either.
Repeated attempts by the Standard-Examiner to reach Colors of Success employees were not successful at that time.
Bourdeaux also was executive director of the Center for Family Development, a counseling program, but it closed in June with significant debt, auditors said.
The audit released Friday reviewed the two organizations' finances between January 2011 and Aug. 15, 2012. It questions more than $86,000 in costs charged to federal grants by both groups and says Colors of Success gave questionable loans totaling nearly $40,000 to the Center for Family Development.
Bourdeaux, who served five terms in the Utah House, denies any wrongdoing in a Dec. 4 written response.
The audit also found payouts of more than $81,000 made to a woman who served as both groups' director until her employment was terminated in June.
Auditors say the questionable disbursements could lead to legal action against Colors of Success and the loss of the group's nonprofit status.
The audit says poor documentation, improper bank reconciliations and other lax procedures allowed the "improper disbursements to occur and go undetected." It recommends the organization adopt better internal financial controls.
The Standard-Examiner contributed to this article.