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DOJ Audit: SF Non-Profit “Call to Freedom” Fails to Meet Multiple Conditions of Federal Grants

Some girls have all the luck. Then there’s Kassidy Peters.

First Peters tries working as a real estate appraiser but has to quit when her mom turns the certification process into a political scandal. Then she goes to work raising money for a nice non-profit, and a few months later, the feds write them up for not living up to the conditions attached to the $1.975 million in federal grants they’ve taken since 2018.

Call to Freedom is a Sioux Falls-based non-profit that claims to help victims of human trafficking and sexual exploitation. To support this work, Call to Freedom took three grants from the Department of Justice Office of Justice Programs from 2018 through 2020 totaling $1,975,000. The DOJ Office of the Inspector General inspected Call to Freedom’s operations to make sure our grant dollars are being used appropriately. In an audit report issued Tuesday, the DOJ OIG says CTF made all sorts of mistakes.

Most significantly, CTF failed to do, or at least document that it did, a lot of the things it promised it would do with all that federal money:

Office of the Inspector General, U.S. Department of Justice, Audit of the Office of Justice Programs Awards Made to the Call to Freedom, Inc., Sioux Falls, South Dakota, #22-074, May 2022, pp. 4–5.
Office of the Inspector General, U.S. Department of Justice, Audit of the Office of Justice Programs Awards Made to the Call to Freedom, Inc., Sioux Falls, South Dakota, #22-074, May 2022, pp. 4–5.

Funny: for working in a state where the Governor says we never shut down for coronavirus, CTF sure thought it could use the pandemic as an excuse for not doing the work it said it would. But even if CTF was being smarter about covid than the average Republican governor running for President, they struggled to come up with a smart justification for taking federal dollars to develop an assessment tool and curriculum and then just borrowing some other group’s work. It also doesn’t sound very smart to claim to be unaware of an objective that the organization wrote in its own grant application.

The majority of CTF’s progress reports were subpar. CTF provided adequate information with reliable data to support claimed accomplishments in only three of eleven items in reports on the 2018 grant, none of twelve items on the 2019 grant, and two of nine items on the 2020 grant.

Among other assistance offered to exploited women, CTF helps its clients find work. But CTF stumbled into a conflict of interest when it got women jobs with Freedom Studios, a branch of Simply Perfect, which says on its product pages that it is “partnering with Call to Freedom to bring meaningful employment to survivors of human trafficking and to provide a simple way for you to become a social advocate against modern-day slavery.” Workers make Freedom Bath Bombs, bottle Freedom Hand Sanitizer and Freedom Soap and Freedom Lotion, and pour Freedom Candles which come in a Freedom Gift Set with Freedom Matches.

SImply Perfect, Freedom Candle, retrieved 2022.05.20.
SImply Perfect, Freedom Candle, retrieved 2022.05.20.
Simply Perfect, Freedom bath+body products, retrieved 2022.05.20.
Simply Perfect, Freedom bath+body products, retrieved 2022.05.20.
Simply Perfect, Give Freedom Gift Set, retrieved 2022.05.20.
Simply Perfect, Give Freedom Gift Set, retrieved 2022.05.20.

As Simply Perfect notes on each product page, the net proceeds from sales of Freedom items go to Call to Freedom. The DOJ OIG looks at that arrangement—victims put to work to make money for the non-profit—and flags a conflict of interest:

By placing victims with the community for-profit entity, the Call to Freedom financially benefits from human trafficking victims it places with a for-profit company. The main goal of the nearly $2 million in DOJ funds awarded to the Call to Freedom is to provide services to victims of human trafficking. We believe that the Call to Freedom’s financial interest in the proceeds obtained through employment placement of victims it serves creates a potential conflict of interest where the Call to Freedom is incentivized to place victims it serves with its for-profit partner. In fact or appearance, this conflict could compromise the Call to Freedom’s objectivity in best serving each victim according to one’s particular needs [Office of the Inspector General, U.S. Department of Justice, Audit of the Office of Justice Programs Awards Made to the Call to Freedom, Inc., Sioux Falls, South Dakota, #22-074, May 2022, p. 11].

Call to Freedom also put victims to work on its own payroll, which might sound like a quick and easy way to help victims make money but which the Inspector General says conflicts with the non-profit’s duty to provide services:

In employing victims, the Call to Freedom was therefore responsible for supervising them in the scope of employment while also providing supportive victim services to the same individuals. We believe this creates a situation that compromises the relationship between the Call to Freedom and victims it serves. In fact, in one instance, due to a punctuality issue of a victim it also employed, the Call the Freedom developed an employee Corrective Action Plan that established an employer-employee agreement requiring reliable and consistent attendance that is punctual. In this situation, the Call to Freedom is both a service provider and an employer of the same person, which we believe could affect the Call to Freedom’s ability to remain objective in providing consistent services to all victims it serves [OIG, 2022.05.11, p. 11].

Call to Freedom failed to disclose these conflicts of interest to the DOJ’s Office for Victims of Crimes. CTF also failed to get approval for or count the money it made from the candle/bath-bomb gigs as program income:

Also, as noted in the Conflicts of Interest section of the report, the Call to Freedom provided documentation showing it received $21,918 in the total proceeds as a result of its arrangement with the community for-profit entity from January 2020 through December 2021. We saw no reference in the award documentation or in Grant Award Modification where these kinds of activities were approved by OJP. We believe the funds received as a result of these activities should be considered program income, which should be reported to OJP in the Federal Financial Reports and counted against expenditures in lieu of drawing down funds [OIG, 2022.05.11, p. 12].

CTF violated the conditions of the grants by using federal money to bail a client out of jail:

For the 2018 award, the program narrative states that no funds from this project will be used for criminal or expungement matters. Additionally, Special Condition 34 states that award funds may be used only for the purposes in the recipient’s approved application. The recipient shall not undertake any work or activities that are not described in the award application, and that use of staff, equipment, or other goods or services paid for with OJP award funds, without prior written approval from OJP. Through our review of performance documentation, we noted that the Call to Freedom provided financial assistance to victims that included payments for a jail bond and an adult interstate compact application fee. Payment for these types of expenses relate to criminal matters for which the Call to Freedom stated would not use award funds to pay. According to Call to Freedom officials, these payments were for the safety of the victims. Specifically, for the adult interstate compact application fee, the Call to Freedom worked with the state’s attorneys’ office to relocate the victim out of South Dakota, which required the payment of court-related fees. Call to Freedom officials explained that human trafficking victims are often forced into situations to conduct illegal activities by the trafficker. These criminal matters need to be addressed in order to provide protection services to the victims. Further, Call to Freedom officials explained that they did not discuss these payments with OJP officials, but have updated their policies and procedures regarding expenses related to legal fees. Because expenses related to criminal matters were specifically excluded by the Call to Freedom, these expenses are not within the scope of the award [OIG, 2022.05.11, pp. 12–13].

The Inspector General recommends that the Office of Justice Programs take seven actions to help Call to Freedom get into full compliance with its grants, which fund projects through April 30, 2023:

  1. Coordinate with the Call to Freedom to establish appropriate policies and procedures that ensures program activities and accomplishments are sufficiently documented and accurately supported.
  2. Coordinate with the Call to Freedom to assess whether goals and objectives need to be revised and ensure award goals and objectives are accomplished and supported.
  3. Coordinate with the Call to Freedom to establish appropriate working relationships with program partners, collaborators, and victims to avoid the appearance of conflicts of interest.
  4. Coordinate with the Call to Freedom to develop policies and procedures that ensure decisions related to award funds are free of undisclosed personal or organizational conflicts of interest, both in fact and in appearance.
  5. Evaluate the total program income earned by the Call to Freedom between the 2018, 2019, and 2020 awards to determine if it was received as a result of award related efforts and appropriately applied to drawdowns.
  6. Ensure that the Call to Freedom develop policies and procedures to properly account for and use program income in compliance with award terms and conditions.
  7. Coordinate with the Call to Freedom to establish proper policies and procedures to ensure that award-related activities are within the scope of the award, within award requirements, and when required properly request approval from OJP [OIG, 2022.05.11, p. 14].

In a response dated April 19, 2022, CTF exec Becky Rasmussen says her group is rewriting a lot of its grant objectives to bring the organization into compliance. Rasmussen says CTF will no longer employ clients in work that may cause a conflict of interest, including in its own office. She says CTF “has stepped away from the partnership” with Simply Perfect (so those Freedom products are about to become collectors’ items—order yours today, before Freedom is gone for good!) but “cannot control when a company decides on their own to donate to the organization.” Rasmussen says CTF derived no other program income from the federal grants. The CTF board of directors will approve updated policies on conflicts of interest and the other issues identified in the audit at its July 28 board meeting; however, in its April 28, 2022, response, the Office of Justice Programs notes that CTF has not yet provided a signed version of these procedures or evidence that it has distributed them to staff.

Rasmussen notes that CTF has been working with auditors since last June to rectify its bad practices. In a separate audit conducted in 2021, Eide Bailly found multiple material weaknesses in CTF’s internal controls, financial reporting, recording of in-kind contributions, and federal compliance. So CTF’s errors aren’t Kassidy Peters’s fault; she walked into a tough situation this January. The feds aren’t going to take away her job or anyone else’s; in its Appendix 4 Summary, the Office of the Inspector General says CTF can resolve all of these issues and close the audit report simply by providing documentation that CTF has done everything the audit recommends, with no fines or other sanctions imposed from the granting agency.

But as Peters is now CTF’s director of development, she will play an integral role in documenting the money coming in, seeking new federal grants, and keeping track of the things CTF promises to do with our tax dollars. Let’s hope that work goes better for her than real estate appraising did.

16 Comments

  1. cibvet 2022-05-20

    Any record of how much of this money was used to pay salaries or is the corporation just a scam creation to increase the wealth
    of the employees?

  2. John 2022-05-20

    Oh good grief. The acorn didn’t fall far from the tree.
    It appears there is actionable absence and lack of due diligence here: first the body members – perhaps individually and severally (check the minutes – assuming they exist and are thorough), the exec, and the development director.
    One wonders whether the non-profit bothered with pesky annual audits. While unlikely given the IG’s findings. But if audited . . . what sayeth the auditors . . .

    Adulting is such hard work . . .

  3. Scott Ehrisman 2022-05-20

    The kicker is the city of Sioux Falls also gave them money. I think it was $500K for Marissa’s House, but I can’t find the meeting they gifted it and I think it came from ARPA funds? If you find a link email me.

  4. DaveFN 2022-05-20

    “Twenty-five dollars is our most popular gift — though any amount you share will be put to good use!”

    https://calltofreedom.org/about/

    Oh, let’s get excited[!!!!!]

    False advertising writ large.

  5. All Mammal 2022-05-20

    So the Call to Freedom is a cover to exploit human slaves? Tax dollars used for white slavers to profit even more off the labor of re-routed skin traffic. Not clever whatsoever.

  6. All Mammal 2022-05-20

    It must feel incredibly demeaning to be in a trafficked situation just to be re-routed by the superficial Mrs. Peters to have to make high dollar bath bombs for rich women.
    While they luxuriously waller in your hard, cheap labor, your rescuers get even more rich. All off the sweat of someone else’s brow. All the slave-made bath bombs in the state couldn’t get the stench off those milky darlings.

  7. P. Aitch 2022-05-20

    “Nepotism Barbie” passed the “how to portray yourself and your nonprofit as the REAL victim” instruction with flying colors, though.
    She’ll do fine because Mom will see to it that she does, one way or another.

  8. Jake 2022-05-20

    I’d bet somehow, that mommy Noem will blame the liberal commie Democrats for her daughter’s s and misdeeds. You fully well know, don’t you that things like these “big government regulations” are what Republicans always use to cry about “over-regulation’ by “big government” while trolling for votes for candidates that hate government but lie, lie, lie and lust to be a part of that very government they profess to hate. Sensible stance, eh?
    Oh yeah, I almost forgot: So nice to see that Senator Cammack who gets picked up for DUI, ‘lawyers up’ and gets his record “sealed” by a court gets voted into the South Dakota Hall of Fame for being such a stalwart person worthy of such admirable acclaim and held up as a standard for youth to admire and desire to be like by our so admirable Republican party. And, while the name Cammack is front & center, how did the hundreds of thousands $$$ of wrongful distribution of Covid $$$ play out for his son’s taxidermy outfit. So much corruption, greed and carryings on in SD one party ruled state!

  9. 96Tears 2022-05-20

    All Mammal – I agree. Something fishy about all of this. Maybe our FreeDumb Governor’s next job will be going door-to-door selling Freedom Bath Bombs and Freedom Gift Sets to the billionaire class she’s currently bilking for her power hungry Presidential campaign. Question: Is CTF Executive Director Becky Rasmussen related to CTF Board Member Curt Rasmussen?

    (I don’t know why exactly, but this audit report brings to my mind former legislator, women rights hater and whacko gun fetish poser Lynne “All Lives Splatter” DiSanto, a.k.a. Lyn DiSanto, a.k.a. Lynne Hix-DiSanto, a.k.a. Lynne Hix, a.k.a. Lyndi DiSanto, a.k.a. Lyndi Meyer. DiSanto seemed to enjoy having her likeness pictured as being involved with WAVI (Working Against Violence, Inc.) in Rapid City. And then the WAVI folks backed away from Lynne/Lyn/Lyndi’s song-and-dance when her whack-a-doodleness became too much.)

    Human trafficking seems to be a cause celebre for anti-woman female extremist Republican politicians, like America’s Party Girl Kristi Noem. Apparently, these über-right wing nutjobs exploit the issue as some kind of political inoculation for their punitive policies that make anyone who isn’t a white, male and evangelical GOP Christian Trumpanzee a second-class citizen. Now, I’ve got some questions.

    1. Given Nebraska Governor Dick Ricketts’ new one-ups-manship proposal to ban all abortions for any reason and without exceptions, is a full ban on abortions the new, official Noem and South Dakota Republican position?

    2. What about a 13-year-old girl forced into human trafficking and made pregnant by a pimp’s client?

    3. Is it God’s Will that she continues her incredible agony after she’s been rescued where the law, this time not the pimp, compels her beyond reason and against her will to carry that fetus to full term?

    4. Is it the official Republican position that she must continue the terror and the loss? As a minor, she’s in no place to raise an unwanted child that reminds her of her sexual slavery every minute of every day. How’s she going to feel after she is handed her offspring and watch them take it away to put that kid up for adoption? None of this was the 13-year-old kid’s or the offspring’s faults.

    5. Then what? Put that teenage victim to work making bath bombs to raise money that pays the non-profit’s staff?

    I don’t think America’s Party Girl Kristi Noem gives a rip about any of that. She’s on her power trip to return to Washington, D.C. She sees her highest priority as Governor as pandering and preening with the worst ideas in the Trumpanzee agenda and to get the heck outta Pierre. To her, the good news is her kid got a job for a non-profit that whitewashes Kristi’s cruelty and anti-woman agenda.

  10. Arlo Blundt 2022-05-20

    Take the money and run, is tough to do with federal grants especially from the Department of Justice who expects results. The non profit didn’t do much but name a Task Force and compile various lists of service providers from existing sources…seems they spent their time developing their soap products rather than rescuing women from human bondage, and they provided a nice pay day to staff for occupying chairs. As measured by the DOJ not much actual “work” was conducted by paid staff other than public relations and fund raising activities. The dust up about conflict of interest in employment is just another case of a non profit with an employment training and placement roll not fulfilling those objectives through competitive wage employment but through make work with the non profit. I’m pleased somebody took the initiative and bailed a client out of jail, even though they cannot do that with federal money. They could have used donations or earned income for that purpose but apparently didn’t have any funds from those sources.

  11. Mark Anderson 2022-05-20

    As 96 tears says freedumb says it all. Is there an honest Repub in the world?

  12. Barbara Dunfee 2022-05-20

    Interesting that they blamed the pandemic for not doing things that date from before the pandemic started.

    “We couldn’t do this in 2018 and 2019 because there was a pandemic in 2020.”

  13. David Newquist 2022-05-21

    The founder of an organization writes,’ “One of the first things the Lord said to me was, ‘Unite a community.’” shares Becky.’ And gets almost $2 million in federal grants, plus other charitable donations. The Lord apparently did not provide any orders on how to be competent and provide honest reports on where the money was spent and how

    After detailing a multitude of deficiencies, the audit indicates they were resolved because the organization agreed with them. In the public mind, trafficking is coercing 15-year-old girls into prostitution. But the organization also claims to address labor trafficking, which apparently does not include putting rescues to work painting the office for undisclosed amounts of pay (“we found that the Call to Freedom was directly employing victims, either for painting services or for performing janitorial services at its office facilities in Sioux Falls, South Dakota”).

    The real problem here is an audit report that uncovers so many deficiencies and then buries them under a pile of incoherent bureaucratize. The objective of an audit is to determine how well money provided through grants achieved the purpose it was provided for.

    The audit report states: “Specifically, the Call to Freedom lacked supporting documentation to demonstrate trainings that were claimed as accomplishments or the development of tools to assist victims.”

    Then it states: “This audit did not identify significant concerns regarding the Call to Freedom’s adherence to award special conditions related to training and duplication of funding. We provide seven recommendations to OJP to address these deficiencies.”

    The government auditors seem fearful about auditing the Lord.

  14. Arlo Blundt 2022-05-21

    Ms. Peters has a tough row to hoe. Almost all funders require a most recent independent audit of the non profit organization before they will consider an application for funding. Continued funding may require metaphysical intervention, if available.

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