Connecticut officials moved Monday to take control of New Opportunities Inc., a Waterbury nonprofit that administers tens of millions of dollars in government grants, after it bounced a $1.56 million check and acknowledged impermissibly using federal energy assistance funds to cover its operational expenses.
With an average annual budget of $41 million in recent years, New Opportunities is a venerable organization formed in the earliest days of Lyndon B. Johnson’s War on Poverty. It administers food, housing, early childhood education and energy assistance programs, with nearly half its budget going to help the poor heat their homes.
On Monday, the commissioner of social services suspended the nonprofit as a vendor administering LIHEAP, the Low-Income Energy Assistance Program, in Waterbury, Meriden and Torrington. At the same time, the Office of Policy and Management demanded the group accept a state-appointed overseer to indefinitely handle all other financial transactions.
Other “immediate corrective actions” demanded in the letter from OPM Secretary Joshua Wojcik included a new comprehensive audit and the removal of any executive the state or the group’s board of directors “identifies as having failed to ensure that State or Federal funding was used for their intended purposes.”
Under its LIHEAP contract, New Opportunities vetted applicants for heating, acting as a middleman between the Department of Social Services and heating fuel sources, such as Yankee Gas, the Eversource subsidiary that provides natural gas in the Waterbury area. The nonprofit is supposed to pay Eversource within three business days of DSS paying New Opportunities.
In late November, Eversource notified DSS of non-payment by the nonprofit.
What happened next is laid out in the letter sent Monday by Andrea Barton Reeves, the commissioner of social services, to William Rybczyk, the president and CEO of New Opportunities Inc., which is referenced in the letters as NOI.
“When DSS inquired about the status of these funds, you provided documentation demonstrating that NOI failed to maintain sufficient funds to cover three checks issued by NOI to support CEAP services totaling over $2.8 million,” Barton Reeves wrote. “While two checks were ultimately reissued to cover approximately $1.257 million of the balance, Eversource informed DSS on December 19th that a reissued check in the amount of $1,569,620.00, would not be honored as the underlying account continued to lack sufficient funds.”
CEAP refers to the Connecticut Energy Assistance Program, the DSS program that oversees federal funding that comes to the state via LIHEAP.
The commissioner noted in the letter that Rybczyk had acknowledged the previous day that “LIHEAP funds had been inappropriately utilized to support other NOI operational costs.” At a minimum, that is a violation of the state contract and federal funding rules.
DSS has taken over LIHEAP in the Waterbury region. Other programs that are run by NOI employees, including an early childhood education program, will continue — with greater state oversight.
Neither Rybczyk nor his board chair, Melissa Green, responded to requests for comment. Green was the recipient of the OPM secretary’s letter.
Stephanie E. Cummings, a lawyer representing the nonprofit, said in an email, “NOI has been proactive in its communications with the departments of the State of Connecticut and is committed to collaboratively addressing any funding concerns the State may have.”
An audit completed Sept. 29 by Whittlesey, the organization’s outside auditor, found that New Opportunities had ended the 2023 tax year on Oct. 31, 2024 with a deficit of $1.6 million. Barton Reeves said NOI forwarded the audit in November to DSS, which shared it with OPM.
It attributed “an operating deficit and a deficiency in net assets as a result of the startup and expansion efforts of Connecticut Food 4 Thought, LLC, and has stated that substantial doubt exists about the Organization’s ability to continue as a going concern.”
Connecticut Food 4 Thought is a hydroponic food producer. The audit also noted the organization believed it was making progress with its finances.
James Gatling, the long-time leader of New Opportunities, retired as the CEO at the end of Masrch 2021 at age 73. Public records indicate he still is on the payroll, paid $100,000 annually in deferred compensation. As of October 2024, he was owed $509,058.
His successor, Rybczyk, is paid $267,048 annually, roughly the same as Gatling in the five years before his retirement, not including the latter’s deferred compensation, according to the group’s publicly available tax returns.
Wojcik said the next step for the state is to meet with the board chair, identify a plan to “hopefully get them on an appropriate financial path that the state has has confidence in. That’s the goal, and we are looking to have that discussion as quickly as possible, if not this afternoon, then tomorrow.”
In its most recently available tax return, New Opportunities reported spending about $19 million annually on energy assistance, including $17.38 million to help pay the heating bills of 48,121 people. Other areas of spending included: community services, $5.6 million; housing, $4.6 million; early childhood education, $4.2 million; and Connecticut Food 4 Thought, $2 million.
“The mission of New Opportunities,” the group says on its web site, “is to improve the quality of life for economically disadvantaged individuals by providing the necessary resources to increase their standard of living, foster self-improvement, and maximize self-empowerment.”