(WLUK) — As FOX 11 Investigates has been reporting on Newcap‘s use of taxpayer money, former employees have been messaging us to express similar concerns as the ones detailed in our stories.
A main theme has been allegations that grant money given to the agency to help low-income residents isn’t being used for its original intention.
As FOX 11 Investigates has been reporting on Newcap’s use of taxpayer money, former employees have been messaging us with similar concerns as the ones expressed in our stories. (WLUK)
Newcap CEO Cheryl Detrick denies these claims. She was put on administrative leave less than a week after FOX 11 Investigates started to publicly share the allegations Feb. 9.
However, the state has said the concerns were enough to put Newcap under enhanced financial monitoring late last year. Two straight tax filings show the organization has been operating at a $2 million deficit.
An independent auditor questions Newcap’s ability to continue operating. That audit looks at money coming in and out, not specifically how it is used.
For more than 60 years, Newcap has been helping low-income residents in our area with things like housing, home weatherization and medical care. In 2024, the most recent data available, Newcap received $13.9 million from the government to carry out its work.
FOX 11 Investigates
“It was a hard pill to swallow, to know you’re being told, ‘Hey, you’re going to help so many people. We’re such a great team here. We believe in lending a hand to whoever needs one,’” said Evan Dudek, a former Newcap lead client support specialist. “You wake up from that dream and you realize it’s an absolute disaster to what really goes on there.”
Dudek didn’t stay long working at Newcap, but he shares similar experiences as at least a dozen other former employees FOX 11 has spoken to over the last several weeks.
“The funds between the different departments was being shifted around, and it was being shifted around quite often,” said Dudek. He who worked at Newcap’s Shawano location for about five months, helping clients in need of interim housing.
The practice of shifting government funds, awarded for a specific purpose, from one department to another, is also what Peggy told us. She’s a former Newcap employee of 16 years.
“I think that programs at Newcap tend to rob Peter to pay Paul,” said Peggy. She asked that we not use her last name at the request of her current employer. “Because of the blending and braiding, you never know what’s there. It’s like living paycheck-to-paycheck.”
Blending and braiding means combining two or more sources of funding. The U.S. Department of Labor talks about it on its website as an approved way to “maximize the efficient and effective use of federal funds across systems.”
“Blending and braiding would be talked about at conferences,” said Peggy. “It’s a trend that National CAP talks about.”
Peggy says she believes her former boss, Detrick, took blending and braiding to an inappropriate level.
“What she meant by blending and braiding was, now I’m still billing my time to transportation, even though every time I talk to this person, it’s about housing,” said Peggy. “It’s not about transportation. So, transportation funds, in my case, could be used, you know, my time billed, it should have been housing, but it was transportation. “
Weeks before she was put on administrative leave, Detrick declined FOX 11’s request for an on-camera interview, but agreed to answer any questions we had over email.
“Staff time is allocated based on documented, allowable activities in compliance with federal and state cost-allocation requirements,” wrote Detrick. “Our Whole Family model allows certain cross-program support activities when they are permitted under grant rules and properly documented.”
Another alleged example of money not being used as it was supposed to has to do with Newcap Builds.
Detrick explains the entity to FOX 11 as, “a for-profit social enterprise created to generate unrestricted revenue through construction-related work in support of Newcap’s mission. It operates separately from Newcap’s core nonprofit programs and follows applicable corporate and governance requirements.”
FOX 11 is told Detrick’s ex-husband, Robert, led Newcap Builds. Tax documents show Newcap paid him $100,576 in 2024 as its vice president of construction and safety.
Two former employees, who spoke with FOX 11 off-camera under the condition they would remain anonymous, allege Newcap Builds was able to get off the ground by using Newcap funding and resources.
They also claim Newcap Builds used Newcap’s tax-exempt status to purchase materials, and Newcap’s funding to pay its workers. More recently, Newcap Builds took out loans to pay Newcap expenses — helping cover the deficit it has been operating at the past few years.
FOX 11 texted Detrick questions about each of those specific allegations. She hasn’t responded to any of our questions or messages since she was put on administrative leave.
Almost all the former Newcap employees we spoke with before our stories started to air, and all the ones who’ve reached out to us in response, have brought up Newcap Builds. Most say the setup didn’t sit well with them, especially because Newcap Builds remodeled Detrick’s personal home.
“Many employees questioned this,” said Peggy. “It wasn’t one room. It was pretty much her whole home. I do know there was negotiations over what was billed. She did not like the bill that she got. “
Detrick confirms and defends the work Newcap Builds did at her home.
“Newcap Builds performed limited renovation work at my home under standard business terms,” wrote Detrick. “I received written bids, the work was invoiced and I paid in full. The arrangement was reviewed by the Board of Directors.”
FOX 11 verified that with a board member who told us everything seemed to check out at the time, and they even ran the numbers by friends who were in the construction industry.
“It sure doesn’t look good,” said Peggy.
The two former employees who alleged Newcap funding was used for Newcap Builds say they believe the for-profit entity owes the nonprofit $256,535.
Several former and current Newcap employees tell us a lack of funds for programs the agency was granted money for has become commonplace.
A plumber tells FOX 11 he’s had to lay off an employee and cut pay for others, as Newcap is seven months late on paying him about $70,000.
A former employee tells us one of their final duties at Newcap was to sell a property quickly so the money could cover payroll. They say the circumstances resulted in the property being sold well below market value.
“We all saw first-hand, we had to turn people away who were looking for help and there just wasn’t money to do it,” said Dudek.
FOX 11 asked Dudek how that made him feel.
“Horrible,” said Dudek. “It made all of us feel horrible. Everybody that goes into working for Newcap, we all want to make a difference. We all want to help.”
The Wisconsin Department of Administration provided FOX 11 the following statement:
Protecting Wisconsin taxpayers and ensuring tax dollars are used appropriately and consistently is a top priority at the Department of Administration. As part of our responsibility to ensure prudent and judicious use of Wisconsin taxpayer dollars, for example, DOA conducts routine review and auditing of partner organizations and entities that receive tax dollars and also undertakes both general and specific agency audits annually in the normal course of our operations.Additionally, it is not unusual for state agencies to receive questions or concerns about specific agencies that we partner with, or which receive taxpayer dollars, and we always do our due diligence to investigate any potential issues, especially where there are allegations of possible mismanagement of taxpayer dollars.Based on information we received late last year, DOA is at this time undertaking enhanced financial monitoring of Newcap, including requiring comprehensive financial and program administrative reviews of the weatherization assistance program, as well as review of financial documentation to ensure that Newcap is complying with programmatic requirements. At this time, we are unable to comment further as to our monitoring and review of Newcap as this process is ongoing.
FOX 11 is told the move to put an entity under “enhanced financial monitoring” is rare.
Usually, Newcap receives weatherization funding right away so it can cover up-front construction costs. Under enhanced monitoring, Newcap has to show documentation first, then it receives money.