Key findings
- A nonprofit recently led by Orange County Supervisor Andrew Do’s 22-year-old daughter failed to submit federally-required audits showing how it spent millions in taxpayer funds, according to an interview and public records obtained by LAist.
- The required audits are tied to $4 million Do played a leading role in allocating to the nonprofit during the pandemic — money earmarked to provide meals for seniors and people with disabilities.
- LAist previously reported that Do voted, along with four other supervisors, to award millions to the same nonprofit without disclosing his family connection.
- Email records document that a county administrator raised “serious concerns” three years ago about plans to contract with the group, citing concerns about its legal status as a nonprofit.
- The OC Supervisors meet again Tuesday, Dec. 19. How to watch.
An Orange County nonprofit that got millions in pandemic relief funds earmarked to feed struggling seniors failed to submit federally-required yearly audits detailing how it spent that taxpayer money, according to public records obtained by LAist.
The organization has been led at various points over the last year by the 22-year-old daughter of O.C. Supervisor Andrew Do. Do voted to direct funds to the group without publicly disclosing his close family relationship. State law allows officials to knowingly award taxpayer money to their adult children — something the state Senate and two Assembly committees voted unanimously in 2016 to make a crime. But the bill never made it to a full Assembly vote.
The money was part of O.C.’s allocation from a wave of pandemic relief funding for local governments provided by Congress under the American Rescue Plan Act, or ARPA. County supervisors each got to allocate part of that money to meal programs in their districts, and Do directed his district’s funding to a nonprofit that was new at the time, Viet America Society.
The missing audits are “a really excellent example of the failure to monitor at the county level,” said Rose Chan Loui, a longtime attorney for nonprofits who now directs UCLA Law School’s program on philanthropy and nonprofits.
“If they would have been required to comply with that, we probably would have a lot more transparency as to what is going on.”
The details of what happened
In April 2021, O.C.’s top elected officials — the Board of Supervisors — voted to devote part of the county’s ARPA funding to feed seniors and people with disabilities who lacked access to sufficient food. The supervisors divided that money equally among each district, with each supervisor then deciding how to spend their district’s funding.
Supervisor Do — who was representing communities with the highest poverty rates in the county — directed his district’s funding to Viet America Society. At Do’s request, the group’s contract was ultimately increased to $4 million in federal funds, split into monthly payments of about $167,000 to cover meal services from May 2021 through May 2023.
Viet America Society has been led at various points over the last year by Do’s 22-year-old daughter, Rhiannon Do, according to a tax filing and other records. It’s a family relationship Do did not disclose before key votes on the group’s funding, according to an LAist review of meeting videos and three county officials — two supervisors and county CEO Frank Kim.
The group was initially led by Peter Pham, an electrical contractor and restaurateur. Before founding the nonprofit in mid-2020, Pham was paid about $21,000 — largely raised by Do — for construction work on statues Do had installed in Fountain Valley in 2015 and 2016, according to a state investigation.
More recently, Pham has alternated with Rhiannon Do as president of Viet America Society since last December, according to public records.
It’s unknown
how much of the $4 million in taxpayer money went to meals for those who needed them. Records obtained by LAist through a public records request show the nonprofit failed to submit federally-required audits that would detail how it spent the money.
Andrew Do, Rhiannon Do, and Pham did not respond to LAist’s requests for comment for this article. The Dos previously declined to comment on reporting by LAist on other funding Do helped direct to the nonprofit. Andrew Do denied wrongdoing in an interview with City News Service in late November.
Pham initially told LAist last month that he would be available for an interview, but has not returned multiple follow-up calls and text messages to schedule it.
The audit requirement was spelled out in a county contract with Viet America Society that Pham signed in May 2021. It states the nonprofit was required under federal law to conduct an annual audit of how the funds were spent, known as a “single audit,” once it spends more than $750,000 of the funding.
Single audits look at a nonprofit’s finances to make sure they’re using federal dollars for their intended purpose and have an accounting system to accurately document the spending, according to the federal government. They’re “the single most important way” to assess an organization’s ability to manage federal dollars, federal officials say.
Deadlines for filing two of those audits with the county and federal authorities were missed by Viet America Society, according to public records. The first was due to be filed to the county by late June 2022 and the second in June 2023, according to the county contract. And a federal spokesperson told LAist the audits were required to be uploaded to a public database within nine months of the audit period, which corresponds to a deadline of the end of September last year and this year.
But the audits do not show up in that federal database.
And weeks after first being asked by LAist in November, county officials have not answered whether the audits were submitted to the county, as required by the contract. Viet America Society also was unable to provide copies of either audit to the county in October of this year, according to email records. A consultant to the group told LAist they hadn’t been completed at that point.
Viet America Society is the county’s only private contractor for this pandemic meals program that does not have single audits on file in the federal database. The others — Meals on Wheels Orange County, 2-1-1 Orange County and AgeWell Senior Services — all have their audits in the database for the last two years.
Tax records also indicate neither audit of Viet America Society was conducted, at least as of this October. Despite its county contract requiring the single audits — “in accordance with” federal law — the nonprofit marked on its tax filings for the last two years that the audits were not required — and left blank whether they were conducted.
Editor's Note
Dec. 20, 5 p.m.: The 2021 and 2022 tax filings originally linked in this article were downloaded from Guidestar.org, which makes IRS data for nonprofit organizations available. Do issued a news release on Dec. 20 falsely alleging LAist had forged the linked 2022 document, citing as evidence the year “2021” appearing in the upper right corner of the electronic copy.
The nonprofit newsroom ProPublica, which also publishes IRS nonprofit filings in a searchable database, told us the raw filings for 2022 from the IRS contained this "2021" label glitch throughout — although the data is defined at the top of the filings as being for tax year "beginning 01-01-22, and ending 12-31-22." ProPublica corrected the label prior to publishing (and that link is now in LAist’s story above.)
Do has not challenged any of the underlying reporting supported by these documents. Those findings: That Do’s daughter was listed in October as the group’s only director or trustee, and that the non-profit’s returns for the last two years indicate “no” to the question whether audits were required.
If any such audits exist, a county spokesperson said, they will be provided in response to a records request LAist submitted over three weeks ago.
LAist also asked county spokespeople if the county has received any accounting at all of how Viet America Society spent the $4 million the county provided for these meal services. They have not provided an answer. The contract terms require the single audits to be submitted to the county, as well as a final financial statement “detailing all program expenditures.” The financial statement was required to be submitted to the county within 30 days of the contract ending on May 31, 2023.
[Click here to read the contract and amendments.]
Group withdrew when asked for copies of audits
Two months ago, in October, the county required Viet America Society to submit its single audits for the last two years as part of an application for new county funding in a competitive bidding process. In contrast, the group’s previous county contracts were not subject to competitive bidding, according to county records LAist obtained.
A Viet America Society representative told the county that the group was unable to provide copies of those audits, according to emails LAist obtained through a public records request.
Those emails show that after obtaining a one-week extension from the county to disclose the audits in its application, the representative told the county that neither audit could be provided by the extended deadline. And the group withdrew from seeking the new funding.
“I have checked with Peter Pham at VAS and due to the deadline of Friday he could not commit to meet it,” wrote the nonprofit’s representative, Roger Faubel.
“With many thanks, we must withdraw our pursuit.”
That representative, Roger Faubel, told LAist that Pham, the nonprofit’s founder and on-and-off president, had told him in October that the audits hadn’t been completed.
“I talked to Peter, and I said, ‘Peter, you know you can’t do this. It’s unraveling here,'” said Faubel, a high-profile county lobbyist, in an interview.
Viet America Society had only gotten part way through the audit process by that point, Faubel told LAist.
“You say that you can meet the timeframe, but it’s not occurring,” Faubel said he told Pham, recommending that he withdraw from seeking the new funding. Emails show Faubel followed up by letting the county know Viet America Society was withdrawing from consideration.
“I realized that he could not comply with all of the information that was required of him,” Faubel said.
In an email to county officials, Faubel said he was Viet America Society’s consultant. He told LAist he didn’t register as the nonprofit’s lobbyist because he wasn’t paid for helping, so he wasn’t required to register as its lobbyist under county regulations.
Faubel’s clients have included AT&T, Waste Management and Enterprise Rent-A-Car. Faubel also lobbied the county on behalf of the landlord for both Viet America Society and Do’s private law office, according to lobbying disclosures by Faubel. The nonprofit and Do’s law office are on the same floor of the same building.
The October emails about audits not being available took place within days of Do’s daughter being marked as the group’s only director or trustee on its tax filing.
What happens when audits are missed
Nonprofits can face
consequences for not submitting their single audits. When it comes to money given directly by the federal government, federal agencies can halt funding until a nonprofit completes their audits, or even cancel the federal dollars altogether.
A spokesperson for the U.S. Treasury Department, which awarded the federal funding the county provided Viet America Society, told LAist in an email that the county is responsible for making sure the nonprofit follows the audit requirements.
“All recipients are required to provide detailed information on how funds are used,” a Treasury spokesperson said of the ARPA dollars that flowed through local governments.
“It is the recipients’ responsibility (in this case, assumably, Orange County) to ensure compliance of their subrecipients,” they added. Viet America Society was a subrecipient.
The county’s contract — pointing to federal law — obligated the nonprofit to submit annual single audits once it spent more than $750,000 in federal funding. That would require audits so far for 2021 and 2022.
County officials can take action if organizations breach their contract terms. In the past, they’ve taken steps like having contractors refund the county from money already provided.
When O.C. Supervisor Katrina Foley was told of the missing audits by LAist, she said she found the situation frustrating.
The audits, she said in an interview, are “a requirement of law so that we ensure that taxpayer dollars are being well spent and used for the purpose they were intended.”
“I’m disappointed that this is happening,” she added. “Because there are those of us that are really doing work to make sure that there’s equity in the way that grants are given out” and that audit requirements are followed.
Supervisor Vicente Sarmiento has called for an investigation into Do. The other two county supervisors, Doug Chaffee and Don Wagner, didn’t return messages for comment on this story. They previously have said they see nothing wrong with Do’s actions.
Tax filings show $276,000 in taxpayer money went unspent
The nonprofit’s tax filings show it grew its cash on hand by $276,000 in 2021 by not spending all of the government funding it received that year — all of which appears to have been paid specifically by the county for the group to provide meals to vulnerable people. That year, the group billed the county monthly for providing meals to vulnerable people.
The county contract, however, required the group to return any funds that were not spent on services.
Additionally, the county meals contracts required Viet America Society to disclose how many meals were provided and the number of meal deliveries. But invoice records obtained by LAist show that for the first 15 months, the nonprofit did not do so on its regular invoices — for which the county paid $2 million during that period.
The only detail given in invoices for charges across that 15-month period was "Services for the County of Orange Nutritional Gap Program," according to records LAist obtained through its records request to the county.
LAist asked county spokespeople about the lack of disclosure, and why the county apparently did not enforce this contract requirement. No answers have been provided.
‘Serious concerns’ raised early on about the group’s legal status
Email records
obtained by LAist also show a county contract administrator raised concerns three years ago about plans to contract with Viet America Society to provide meals — largely because of its inability to show it was legally registered as a nonprofit.
A county executive approved the funding anyway, emails show. That executive, Dylan Wright, and county spokespeople have not answered questions about why he decided to proceed despite the concerns, and whether Do had a role in that decision. The county went on to pay more than $3 million to the organization over the next two years before it registered with state nonprofit regulators as required by law.
The first $2 million of that money was directed by Do to Viet America Society outside public meetings, under the meal funding for his district. The rest was approved by Do and other supervisors, at Do’s request, in an April 2022 extension of the group’s contract.
“I have serious concerns about issuing a contract to this organization that appears to be a home based business and can’t verify their non-profit status,” wrote Heather Condon, a county contract administrator who was processing the group’s first county contract, in an email to other officials at her department on Dec. 23, 2020.
She then asked her colleagues if Viet America Society had been approved at the state level as a nonprofit. Follow-up emails show the concerns were raised up the chain that day directly to Wright.
State Attorney General records reviewed by LAist show no registration until two years later, in January 2023. And even then, state regulators said the group was still not in compliance.
After learning of the legal status concerns in December 2020, Wright decided later that same day to move forward, according to the emails. The emails back do not show an explanation back to Condon responding to her specific concerns.
Condon told LAist she never received an explanation addressing her concerns.
“Just a direction to proceed,” said Condon, who retired from the county earlier this year.
“I don’t know what went on in the discussions to go ahead and approve issuing the contract.”
The state charity registration is required in order for the state attorney general to ensure nonprofits are doing the work they said they’d do when they obtained their nonprofit tax exemption, said Chan Loui of UCLA Law School.
“It’s essentially your pact with the public,” she said.
“You’re getting benefits as a nonprofit from the state of California, and the attorney general is charged with making sure that those funds are in fact being used for public good,” she added.
“The attorney general can’t do their job if you’re not filing.”
Foley, the county supervisor, told LAist it’s important that the county is only paying entities that can legally receive the money. Foley said she’s worked hard to make sure that the nonprofits she directed funding to were in compliance with legal requirements.
“No matter what kind of contract we're entering into with the county, we need to be entering into these agreements with organizations that are lawfully able to partner with the county agency,” she said.
“I feel like we have to have standards. Right?” she added.
State law requires nonprofits to register with the attorney general within 30 days of receiving assets. It took Viet America Society over two years to do that, according to disclosures it later filed.
Even after it registered, the attorney general found the nonprofit still was not legally compliant because it hadn’t filed its long-overdue annual registration and financial disclosures for 2020.
This April, the group was declared delinquent by the AG’s office, which stated at the time that Viet America Society was “prohibited” from seeking or spending funds.
While the group was still declared delinquent, Do voted for another $2.5 million in county funding for his daughter’s group, without disclosing the family connection. Viet America Society resolved its status in June when the AG’s office received its overdue 2020 paperwork, according to the AG’s records.
Supervisors to vote on new policy to require family member disclosure
Supervisor Sarmiento is proposing county ethics reforms that would require supervisors to disclose any family relationships to people or groups seeking county funding approvals that come before them. It would also require more public transparency about who supervisors divvy up their districts’ discretionary funding to, by posting online a quarterly log of all agreements that have been approved.
“As elected officials, we have an obligation to be as transparent as possible with the public and disclose any potential conflicts of interest, especially when voting to spend taxpayer dollars,” Sarmiento said in a statement to LAist.
That item will be up for a vote at Tuesday’s board of supervisors meeting, which starts at 9:30 a.m.
