Clients flee advisory firm for not-for-profits

An Indianapolis firm entrusted to handle finances for not-for-profits has lost several clients in the past 12 months, and
all for the same reason—missing money.

WorkPoint Advisors owes thousands of dollars to at least three ex-clients,
according to the clients. A former employee and a consultant who worked with the firm corroborate their accounts.

None of the ex-clients has sued WorkPoint, and CEO Susan L. Ellis denied she owes them money. “I don’t agree
with that statement,” she said.

Ellis is a consultant to not-for-profits and a former executive director
of the YWCA in Indianapolis. She formed WorkPoint in November 2007 as a successor company to the NonProfit Team, a similar
firm she led. The company had only a few employees even before losing clients.

Despite questions about WorkPoint’s
management practices, the Central Indiana Community Foundation earlier this year chose Ellis to lead a high-priority effort
to improve meal services to senior citizens.

CICF’s Indianapolis Retirement Home Fund will pay WorkPoint
$400,000 over three years for duties that include building a Web site and database and meeting with senior-service agencies.

The project, called Elders at the Table, is the retirement home fund’s top priority. Pam Velo, CICF’s
vice president for donor services, said she was aware of WorkPoint’s client disputes before hiring the firm.

“I spoke to the organizations that were involved in this,” she said. “Based on what they told me, and
what [Ellis] told me, it was a satisfactory explanation.”

One former client claims Ellis admitted taking
association funds.

“She explained that she used it, basically, to keep her business going,” said Norm
Gallivan, an Indianapolis auctioneer who is president of the Association for Corporate Renewal’s state chapter.

Velo declined to say what explanation she received, or which of Ellis’ former clients she interviewed. She added
that CICF is paying WorkPoint for services, not to distribute funds.

“We are nothing but happy with the work
WorkPoint Advisors is doing for us,” Velo said.

The Association for Corporate Renewal canceled its contract
with WorkPoint in January, Gallivan said. He said WorkPoint owed ACR about $18,000. He said some has since been repaid.

ACR’s 105 members in Indiana are lawyers and other businesspeople who work in bankruptcy and liquidation.

Gallivan said the group heard a tip from another WorkPoint client, the Indiana chapter of the Association for Corporate
Growth.

The two groups have members in common because the ACG focuses on mergers and acquisitions.

Gallivan
said the $18,000 came from dues and fees for activities like a golf outing. “It was basically everything we had,”
he said.

Bob Greising, president of the Association for Corporate Growth’s Indiana chapter, said the group
canceled its contract with WorkPoint in December.

“We terminated their service based upon financial discrepancies
which we had identified, and for which we received no satisfactory explanation,” Greising said.

Greising
declined to say how much he believes ACG is owed. He suggested the group might pursue an insurance or court claim. “We’re
considering the alternatives to recover the funds that are owed to us,” he said.

The School Social Work Association
of America, a group based in Columbia, S.C., questioned WorkPoint after the hotel bill from its annual conference in April
2008 went unpaid.

The association, which has about 670 members, canceled its contract with WorkPoint last fall.

“I don’t know exactly what happened, but funds that were due to be deposited in our bank account didn’t
get there,” said Frederick Streeck, the executive director.

Streeck would not reveal the amount he thinks
WorkPoint owes, but said, “I can tell you that it’s substantial for us. It represents maybe 25 percent of our
annual budget.”

The social workers have been trying to contact Ellis, Streeck said. “We would like
to get it resolved, but have not been able to so far.”

When asked about the social work association, Ellis
countered that the group owes her for administrative work.

“That’s an interesting comment on her part,”
Streeck said. “Taking the amount she feels she may be entitled to leaves a significant amount of unaccounted-for funds.”

Chad Crowe, former vice president of association services at WorkPoint, said disputes over client money started after
the firm began processing credit card transactions, about two years ago.

Crowe said the firm set up a single merchant
account with the intention of keeping transaction costs low. WorkPoint would use the merchant account to pay vendors, then
reimburse the excess to individual clients’ bank accounts.

“Knowing now about the issues of co-mingling
funds, it’s something we shouldn’t have done in the first place,” Crowe said.

Crowe claims Ellis
had sole check-writing authority. He said the fact that WorkPoint was slow to pay vendors prompted some association treasurers
to look more closely at their finances.

“When they saw the expected deposit, compared to the actual deposit,
that’s when they first started asking questions,” Crowe said.

In the case of the school social workers,
Crowe said the hotel bill was about $95,000.

“It had been six months since the conference, and the hotel
hadn’t been paid,” Crowe said. “I knew because I handled the registration—there should’ve been
money to pay.”

Crowe left WorkPoint this summer, and says he never was paid for several weeks of work. He
and a former consultant, Joy Melnyk, said they tried to help several clients reconcile their books without Ellis’ knowledge.

Melnyk handled bookkeeping and other tasks at WorkPoint from May to October of 2008. She now is the finance director
at the Indiana chapter of the National Multiple Sclerosis Society.

Melnyk said she fears that Ellis, when confronted
by disgruntled clients, laid the blame on former employees.

“The worst thing I could’ve done, or a
bookkeeper could’ve done, is make some crazy [data] entry,” she said. “We could not cut a check. We had
no signing privileges.”

Crowe said he never confronted Ellis about her management practices.

“I
had been hoping these clients would take action on their own,” he said. “If these clients could see this was widespread,
maybe they would’ve taken a different course of action.”

As an auctioneer, Gallivan has met many distressed
business owners. “Nothing really surprises you,” he said.

Nevertheless, he said Ellis’ admission
caught him off guard, “since we had worked with WorkPoint Advisors for many years, and had a sense of trust.”•