LARGO — Pinellas County's Head Start program and a sister agency improperly handled federal funds and hired relatives of executives, according to a federal audit released this spring.
The audit, by the inspector general of health and human services, did not allege criminal wrongdoing but recommended that federal officials look deeper into Pinellas Head Start's financing to see if further action is warranted.
Among other things, Head Start allowed employees to use company vehicles to drive to and from work without reimbursing the agency for personal use.
Director Juanita Heinzen paid her daughter Krystal $28,258 as a consultant at Head Start's sister agency, called Friend of Families Foundation.
That was for teaching communications and life skills to poor parents, many who had children in Head Start. Heinzen acknowledged in an interview Friday that, as director of Friend of Families, she had also hired her fiancee and herself to do the same work.
Heinzen, 64, worked her way up the ranks and has run Head Start for nine years. She said the two organizations she manages have corrected financial issues raised by the audit. She also said hiring her daughter and fiancee was probably a mistake, even though they were "stalwart workers" and her board approved the hires.
They both resigned as consultants as auditors were questioning the relationship.
"In hindsight, that could be considered a conflict of interest," Heinzen said.
The audit is not Heinzen's only problem. In February she was charged with a misdemeanor for filing a false police report after she said an unknown person had stolen a company van from Head Start's headquarters in Largo.
Later, she acknowledged that her fiancee, Kevin S. Edwards, who lived with her in St. Petersburg, had been driving the van and had not come home, a police report states. Edwards showed up after two days.
Heinzen said she never wanted him prosecuted, just the van back.
This month, she pleaded no contest, with adjudication withheld, and was placed on six months of probation. She declined to discuss the incident, saying legal issues are still pending. Edwards was not charged and could not be reached for comment.
Pinellas County Head Start, a private, non-for-profit business, teaches learning skills to about 2,000 poor children a year, from birth to age 5, getting them ready for school. More than $14 million in federal grants provides the bulk of its budget.
The Pinellas program is considered one of the nation's best, Heinzen said, and was picked as one of the three first "programs of excellence" by the National Head Start Association.
About six years ago, Heinzen and other Head Start officials started Friend of Family Foundation, also a private, not-for-profit corporation, which won a five-year "Healthy Marriages" federal grant paying more than $300,000 to train more than 500 poor people a year in life skills.
At first, Head Start hired third-party contractors to run the classes, but "we couldn't reach our numbers," Heinzen said. "Thirty people would be scheduled, and only four would show up."
So she and other Head Start workers took on the classes themselves, carefully working after 5 p.m. and on Saturdays to avoid using Head Start resources, she said. The Healthy Marriages grant even provides separate laptop computers.
Heinzen earns $118,512 to run Head Start and $13,718 as director and a teaching consult for Friend of Families.
The audit, which covered January of 2008 through March of 2009, was technically directed to the Pinellas Opportunity Council, an umbrella organization that collects federal dollars, then passes them along to agencies such as Head Start, which provide the services.
The council failed to properly monitor Head Start, the audit said.
Among other things, Head Start had temporarily loaned Friend of Families and two other nonprofits associated with Heinzen more than $159,000. The money was quickly paid back, but was not a proper use of Head Start funds, the audit said.
That stemmed from a long-standing routine between Head Start and related organizations when they engaged in joint projects, Heinzen said. Head Start would front the expenses, then collect proportionate repayments from the other groups.
On auditors' advice, each organization now pays its own share from the get-go.
The audit also said that Head Start spent $31,740 on employee travel for training seminars and listed it on balance sheets as a program expense, rather than administrative expense.
Those expenses are now listed correctly, said Pinellas Opportunity Council director Fred Zecker, noting that, even with the mislabeled $31,740, Head Start's administrative expenses fell within the 15 percent allowed by law.
Times staff writer Kameel Stanley contributed to this report.