Judge orders audit for Blind Industries State has charged agency with financial abuses

December 24, 1991|By Brian Sullam

Blind Industries and Services of Maryland must submit to an independent audit of its books and programs, but its current management will continue to control the quasi-public organization, a Baltimore judge ruled yesterday.

Last Tuesday, the attorney general's office asked Baltimore Circuit Court Judge Joseph H. H. Kaplan to take control of the organization and appoint a receiver to temporarily run it. The attorney general charged that there were administrative and financial abuses at the agency and "evidence of misspent and misapplied funds."

The request came after a state audit found that the organization, which was formed in 1908 to train and employ blind adults, ran up hundreds of thousands of dollars in losses at a time when it dramatically increased pay and benefits for its top executives.

Those benefits included spending $2,000 toward a golf club membership for its president.

In rejecting the call for a receiver, Judge Kaplan said that the amount of allegedly misspent money was "insignificant" but that the state has a "right to see that its money is properly spent."

The state awards BISM an annual grant of $1.2 million. The agency, with sales of $13 million last year, manufactures yellow legal pads, prison uniforms and has had some defense contracts.

"The air has to be cleared," Judge Kaplan said. "If not, there will be continuous battles between Blind Industries and the state."

A receiver is a court-appointed independent manager who takes control of a company or organization whose affairs are in disarray and whose assets are in danger.

Judge Kaplan's ruling calls for the state to appoint an auditor to review BISM's programs and books for the years since Richard J. Brueckner was appointed president in January 1988.

If there are any irregularities, BISM must pay part of the audit's cost.

Stanford D. Hess, an attorney representing BISM, told the court that such an audit will cost about $50,000.

Deputy Attorney General Ralph Tyler III said the state also is concerned that BISM is not fulfilling its mission. According to the audit, the number of blind people employed at BISM has been declining since Mr. Brueckner took control.

Mr. Hess said an audit was unnecessary because one had just been completed. The state division of Vocational Rehabilitation had approved the organization's programs and renewed its grant on Oct. 30.

Mr. Hess said the state wasn't concerned about misspending but had an "ulterior motive," to "take over BISM and make it part of the Vocational Education Division."

After the hearing, Mr. Tyler labeled that charge "preposterous."

Daryl C. Plevy, an aide to Gov. William Donald Schaefer, said that the governor was "pleased with the outcome" and that the audit will "make sure everything is on the up-and-up."

Yesterday's hearing was attended by a number of blind people representing various organizations opposed to Mr. Brueckner's stewardship of BISM. Ralph Sanders, who was president of BISM in the early 1980s, said the organization is not meeting its requirement.

Only one of the 14 managers earning $40,000 or more is blind, he said.

One condition for receiving the state's annual grant is that BISM maintain a ratio of 75 percent blind employees and 25 percent employees with sight.

For fiscal year 1991, 38.5 percent of BISM's employees are blind and 61.5 percent have sight.

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