A Waterbury nonprofit flagged for significant financial irregularities in December will remain a provider of crucial public services in dozens of communities, despite a scathing forensic audit documenting the misdirection of funding under previous leadership.

New Opportunities Inc., an anti-poverty agency known as NOI that distributes millions of dollars annually in state and federal funds, will remain a state vendor with conditions imposed by Connecticut, including closer oversight and the departure of its previous chief executive officer, state officials said Monday.

“We decided not to sunset the agency because they serve an enormous catchment area, and it would have left a lot of people without services,” said Andrea Barton Reeves, the commissioner of social services.

Joshua Wojcik, the state’s top budget official as the secretary of policy and management, said state is standing by a decision made months ago to fix NOI and better safeguard public dollars, rather terminate all contracts and force the closure of the nonprofit. 

“The immediate concern when we learned this was what would happen to the individuals directly served by this organization if they were to go away. Some of these things are not easy to replace, things like halfway houses, a very large childcare facility,” Wojcik said.

Wojcik and Barton Reeves spoke to reporters as the state prepared to release the forensic audit by CohnReznick that was commissioned by the state at a cost of $301,000. NOI’s new interim leader and its former chief executive could not be reached for comment, but its lawyer issued a statement saying the organization was on the mend.

“Since last December, New Opportunities, Inc. has implemented major leadership changes and new agency leadership has streamlined administration oversight and secured the agency’s financial sustainability, while continuing to meet the unprecedented demand for services from clients and communities facing economic pressures across Connecticut,” said Stephanie E. Cummings, NOI’s lawyer.

In December, Barton Reeves suspended NOI as an administrator of LIHEAP, the Low-Income Energy Assistance Program, in Waterbury, Meriden and Torrington, after it bounced a $1.56 million check and acknowledged impermissibly using federal energy assistance funds to cover operational expenses.

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 and hire an independent consultant to help with management. 

OPM also authorized the forensic audit that found deeper issues — $2.9 million in energy funds were used for other expenses to keep afloat an agency that lost money in each of the past two years.

A major source of the nonprofit’s financial problems was $1.45 million in losses incurred by Connecticut Food 4 Thought, a hydroponic food producer and a wholly owned entity, from Nov. 1, 2024 through Feb. 28, 2025. 

Funding from NOI’s childcare program, which historically had generated a net profit, also was used to cover losses incurred by other programs, the audit found. It also concluded that management withheld information about the difficulties from NOI’s board of directors.

Wojcik said the audit’s findings have been referred for review to the attorney general’s office and state prosecutors.

Wojcik said the closure the hydroponic facility eases financial pressures. Cummings concurred.

“Ceasing operation of our affiliate will also enable New Opportunities, Inc. to accelerate our programs and services to communities throughout Connecticut without enduring the usual, market-place maturities typically endured by newly launched businesses,” she said.

New Opportunities was 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.

William Rybczyk departed as chief executive not long after the disclosure in December.

James Gatling, the long-time leader of New Opportunities, retired as the CEO at the end of March 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.