People Against Rape, which is struggling to survive following the discovery of financial irregularities, was warned two years ago to keep a better eye on its books, a state official says.

Barbara Derrick, director of administration for the Department of Health and Environmental Control, noted those concerns in a letter sent last week to the rape crisis agency’s board chairman, Michael Roach.

As far back as 2010, DHEC raised concerns about the lack of financial controls, and yet “insufficient action was taken to prevent fraudulent activity by a PAR employee,” Derrick wrote.

Derrick is also concerned about the “failure to timely report these issues, since more than a year has elapsed” since Roach became aware that state and federal funding was being diverted, the letter said.

Roach said he was unaware of any warning made by DHEC officials in 2010.

“It is what it is,” Roach said. “We’re the ones that went to them and reported this.”

The organization recently reported to DHEC its discovery that $60,000 to $80,000 in bills had never been paid, but had still been submitted for reimbursement to state agencies.

Board members have blamed a former employee, who has since left the organization. The matter is being investigated by North Charleston police, and State Law Enforcement Division agents are conducting a preliminary inquiry to determine whether an investigation is warranted.

In January 2011, when PAR’s new treasurer, current board member Vickey Cornelison-Grant, started looking into the agency’s finances, she noticed red flags, according to Roach.

The agency began investigating before making accusations, he said. They had never received late notices for the lack of rent and tax payments that had been submitted for reimbursement, PAR officials said.

The Internal Revenue Service’s late notices were mailed to a payroll agency that was no longer being used, Cornelison-Grant has said. They never received the landlord’s notices because he had lost his bookkeeper and wasn’t aware he hadn’t been paid, she said.

“It doesn’t make it any easier to swallow. Some people say that’s a cheap excuse. But in good faith, I can only tell you what we did. As soon as we found out and had reasonable information, we went to the people who need to know,” Roach said, following the public announcement of financial issues.

PAR lost about $300,000 in grant funding from the S.C. Department of Public Safety and DHEC, according to board members.

Due to the financial irregularities, DHEC has amended the funding process for the nonprofit group. For DHEC to even consider reimbursing its state funding, PAR must have an independent audit completed, report detailed corrective measures initiated, and submit a correction action plan to address the prevention of future deficiency, the letter said.

Once the audit is completed, DHEC also may require PAR to reimburse it for any grant funding that was improperly used, Derrick stated.

As a result of the funding losses, last week the board laid off the agency’s remaining employees, and the organization is now operating through volunteer efforts. They are still operating a 24-hour crisis hotline and responding to hospital calls.

Reach Natalie Caula at 937-5594 or