March 4, 2011 | Read Time: 2 minutes
The Academy for Educational Development, a 50-year-old Washington group, announced on Thursday that financial problems had forced it to close and transfer its programs to other organizations.
The move comes in the wake of a decision in December by the U.S. Agency for International Development to cut off new contracts to the charity after its inspector general accused the group of financial mismanagement.
The organization has faced other financial troubles. For example, gifts fell by 23.6 percent in 2009, to $42.9-million, according to The Chronicle’s 2010 Philanthropy 400 ranking of the charities that raise the most from private sources.
With 250 programs in the United States and at least 150 other countries, the charity, which maintains headquarters in Washington, has worked internationally to improve civil society, economic development, education, and health. In March 2009, the nonprofit was awarded a $76-million grant from the Bill & Melinda Gates Foundation to support a new program meant to improve child nutrition in developing African and Asian countries.
Lack of Internal Controls
Gregory R. Niblett, who has served as chief executive of the academy since January 21, said in an interview with The Chronicle that while the group has not yet made a deal, “we have done enough market research to [believe] that there are potential buyers out there who would be interested in acquiring our assets.”
Although he would not name the groups that might be interested in taking over the academy’s programs, Mr. Niblett said some organizations have contacted his group in recent days to express interest in the transfer.
In December, USAID cut off new contracts to the academy when the inspector general’s office found evidence of what it characterized as “corporate misconduct, mismanagement, and a lack of internal controls” within the organization. At the time, the nonprofit said it was taking steps to improve oversight of its programs, which then included 65 contracts with USAID worth about $640-million.
Mr. Niblett declined to comment on whether the federal agency’s findings had any effect on the group’s decision to offer its programs to other organizations but expressed the group’s aim to continue to improve oversight.
“The organization had strong internal controls in many places and has been working to strengthen internal controls across the board,” he said. “I believe we have made significant progress in building a stronger organization with regard to compliance and internal organization.”
Nonetheless, the organization said in a written statement it had decided that the best course was to ask other organizations to take over programs it now runs.
