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Ex-Harbor Homes employee speaks on AG’s report

NASHUA — A few days after the New Hampshire Attorney General’s Charitable Trusts Unit released a report on Harbor Homes, one former employee is calling on President and CEO Peter Kelleher to resign.

The Nashua-based nonprofit provides low-income housing, mental health counseling and substance use disorder treatment. The Attorney General’s Office (AG) conducted a review of Harbor Homes, which is a group of 12 entities not legally connected – but which share a common board of directors and top management – and allegedly found there are thousands of inter-company and inter-program transactions with little supporting documentation.

While Harbor Homes faces financial struggles, documents provided by the AG show Kelleher is earning hefty six-figure salaries. According to the AG, for fiscal year 2017, Kelleher received more than $500,000 in wages and benefits. The organization’s total income was shy of $28 million.

“The president is well compensated,” the report states. “The board of directors should review the president’s compensation.”

According to the report, Kelleher more recently earned a salary of $335,921, plus other compensation (pension, life and health insurance benefits, etc.) of $81,662 in FY 18.

With revenues of more than $38 million and net assets of $7 million, the organization faces a number of financial problems, and in recent years, struggled to maintain sufficient balances in its cash accounts for ongoing operations.

“Harbor Homes’ staff sometimes writes checks without sufficient funds in an account, which assumes there will be a delay before check presentment, but which on occasion results in overdraft fees,” the report states.

Former Employee Speaks

Now, after reviewing the report and having worked closely with Kelleher, former Harbor Homes employee Melbourne Moran is calling for others to join him in requesting that Kelleher resign.

“All of us, the people of Nashua, the Mayor’s Office, the Aldermen, everyone who is running for elected office needs to call for Peter’s resignation,” Moran told The Telegraph.

Moran is the former director of integrated care and population health at Harbor Homes. He alleges he was fired for questioning Kelleher about potentially fraudulent business practices.

“They have no regard that this is all money given to them by the government,” Moran said. “They’re using it as if its their own little slush fund.”

Moran alleged that 85% of Harbor Homes’ funds are taxpayer money, whether that be grants, federal aid, etc., alleging that Kelleher is playing a “street shell game.” He said instead of being responsible with these funds, the organization has chosen to move it around to pay these bills, and on top of it, write checks that bounce.

“He’s betrayed the frontline workers of Harbor Homes, the first responders and city tax payers,” Moran further alleged.

Harbor Homes’ Response

Harbor Homes released a statement in response to the AG report.

“We are actively working with the state of New Hampshire to implement a series of procedural changes that will enable us to better meet regulations for all nonprofits contracted with the state, some new this year, related to financial metrics. In particular, we are working to change the Days of Cash on Hand to a minimum of 30,” the statement reads in part.

“Harbor Homes is strong, and the work of our dedicated staff each day is critical to the health and well-being of our fellow Granite Staters. We are grateful for the opportunity to serve our state and with these updates, look forward to continuing our service in the years ahead,” it adds.

Harbor Homes also cites how the needs in New Hampshire have always been great, and that today they are even greater than ever, which has led to their growth as a nonprofit. In providing an example, the statement explains that when the Nashua officials asked Harbor Homes to join them in creating a Safe Station program, they said yes, and got started saving lives, knowing that the funding would come.

The City Speaks

“What I do know is that Harbor Homes was not misusing the Nashua funds that we provided at the time,” Mayor Jim Donchess said.

Donchess said the city did not intend to restrict the funds to any narrow part of Safe Stations. He said the city was satisfied as long as Harbor Homes was continuing to help the community by offering the support services for Safe Stations whether that was transportation of beds.

Donchess said city officials are still trying to digest the report, and had not gone through it completely as of Monday. However, he said the city would not have been able to establish the Safe Stations program without Harbor Homes.

Donchess added that he is not calling for Kelleher’s resignation.

The report offers a number of recommendations, and can be viewed in full online at, https://www.doj.nh.gov/news/2019/documents/20190913-harbor-homes.pdf. Harbor Homes’ response can be found online at, http://www.nhpartnership.org/blog/ctu-audit/.

Adam Urquhart may be contacted at 594-1206, or at aurquhart@nashuatelegraph.com.