The Albuquerque Journal reports (http://bit.ly/16TZ9T2) that the audit says Shannon and Lorraine Freedle derived much of that income from leases paid by the nonprofit, TeamBuilders Counseling Services Inc., to holding companies owned in full or in part by the Freedles and other TeamBuilders officers.
In June, the state Human Services Department froze payments to 15 nonprofits that provide mental health and substance abuse services after the audit found what the agency said was a high rate of billing problems and possible mismanagement.
State officials who commissioned the audit have refused to release the document at the request of Attorney General Gary King, whose office has said it has 17 staffers reviewing the material. But the Journal obtained a summary of audit the audit's findings and recommendations.
Gregory Richards, an attorney for TeamBuilders, called information from the audit relayed to him by the Journal "grossly inaccurate" and repeated the nonprofit's complaint that it has not been able to defend itself against state accusations, because the state has refused to provide the audit to TeamBuilders.
"The audit information you have cited contradicts or misrepresents the publicly available information," Richards continued.
The newspaper reports that the audit found that the nonprofit made lease payments of more than $3.3 million from 2006 through 2011 to limited liability companies owned in full or part by the Freedles and other TeamBuilders' officers.
According to the audit, TeamBuilders leases property in Clovis, Clayton, Santa Fe, Tucumcari, Las Vegas and Taos from limited liability companies that are owned in whole or in part by the Freedles or for which Shannon Freedle is listed as the organizer.
In Ruidoso, the nonprofit leases from an LLC for which TeamBuilders' chief operations officer was the organizer, the audit said. TeamBuilders has lease commitments of $1.57 million from 2011 to 2021 for the property, which was purchased by the LLC for $322,000 in 2011, according to the audit.
The audit said it is noteworthy that TeamBuilders invested in land for expansion in Quay County with the intention of building a facility, but continues to hold the land, and instead entered into leases and construction contracts "with related property holding companies to develop property that it would never own."
The Freedles told the Journal in a 2011 story that TeamBuilders has hard-to-find space requirements and that, while it owned small buildings in some communities, its board didn't want to make big capital investments or saddle the nonprofit with long-term debt for larger or more specialized spaces.
So the Freedles, other TeamBuilders employees and outside investors started the real estate companies, the couple had said.
Shannon Freedle is TeamBuilders' CEO, and Lorraine Freedle, a pediatric neuropsychologist, is its clinical director. According to the audit, in the fiscal year 2012, Shannon Freedle got a 71 percent raise, increasing his compensation to $252,000, while Lorraine Freedle got a 46 percent raise, bringing her compensation to $203,000.
Information from: Albuquerque Journal, http://www.abqjournal.com