This May 4, 2017 photograph, shows Nancy New, owner and Director of the Mississippi Community Education Center (MCEC) and New Learning, Inc., at a social function in Jackson, Miss. Special agents from the office of State Auditor, have arrested New and several others in connection with a multi-million dollar embezzlement scheme. The indictments include a range of violations involving fraud and embezzlement. (Sarah Warnock/The Clarion-Ledger via AP)

Nancy New, whose nonprofit received tens of millions of federal welfare dollars intended to help struggling families out of poverty, told Mississippi Today in 2018 she wanted to see the resources “getting right to the people.”

That’s not what happened. Now she awaits trial on embezzlement charges, to which she pleaded not guilty, while an FBI investigation into the alleged welfare scheme continues.

Before she was arrested, New’s organization, Mississippi Community Education Center, and another nonprofit, Family Resource Center of North Mississippi, ran a statewide program called Families First for Mississippi with the new focus of helping low-income families secure employment to support their families instead of public assistance.

They would do this by offering soft skills training, such as resume writing and interviewing, and work supports, such as donated professional clothing, to adults otherwise unprepared for today’s workforce.

In reality, they helped very few low-income families find self sufficiency, according to outcome documents the nonprofits provided to the Mississippi Department of Human Services, the agency funding the program. From 2017 to 2019, the nonprofits reported helping 652 people receive a Career Ready Certificate, 94 write a resume, and 72 complete a job application, though the reporting is likely flawed. They did not track how many of their clients got a job or how much more money they may have earned after the program.

And yet, the nonprofits received about $100 million from the state welfare agency over three years.

Mississippi Community Education Center instead funneled millions to New’s private school company, bought expensive personal vehicles, leased property she owned just for it to sit empty, and paid for the pet projects of retired athletes, such as a $5 million volleyball stadium at University of Southern Mississippi, concussion research, the mortgage on a horse ranch and a fitness boot camp, according to a state audit published in early May. 

The audit accuses former Human Services director John Davis, who also pleaded not guilty within the alleged scheme, of enabling, and in some cases directing, the nonprofit to spend the funds this way.

Mississippi Today sat down with Nancy New and other nonprofit employees in October of 2018, while the nonprofit was allegedly perpetrating what the State Auditor called the largest public embezzlement scheme in state history, to talk about her nonprofit’s work. She has not made any public statements since her arrest in early February, but the following transcript is how she explained their mission back then.

The following interview has been edited for length and clarity.

Mississippi Today: How was Families First conceived? I understand now that Mississippi Community Education Center and Family Resource Center of North Mississippi combined in this effort. What was the genesis of that?

Nancy New: I’ve been part of Families First resource centers for 25 years, from its inception. Actually when the federal money first flowed down to the states across the nation, Mississippi was one of them to receive monies to actually set up Family First resource centers to serve families, so I was fortunate then to have a small grant and to get services started in the Delta.

So the whole concept of Families First for Mississippi and the services is to enhance and empower families through getting them stabilized through education, through services and so forth. It is also to reach the whole family. That’s called the Gen+ model.

Where we have concentrated on helping that individual and perhaps the individual’s child or vice versa, what we want to do is learn about the whole family. Let’s reach every individual in the family. Let’s start changing families lives instead of just one person in that family because if we can impact the whole family, that’s going to be much more powerful and beneficial than just one individual.

It hasn’t changed in the last 25 years. What’s happened is that it’s grown and where we were concentrated in just a few areas across the state, according to resources, financial and other resources, we were able to expand that through this greater effort now.

You ask about the two organizations, that’s just a matter of logistics. We divided the state so we could manage it better.

When did that happen?

Nancy New: It really began about five years ago. At that time Mr. Berry was director. They — and when I say ‘they’, I’m speaking of the leaders of Department of Human Services, as well as federal leaders, too — they said, ‘How can we help Mississippi even more so? How can we make these dollars really really have a greater impact?’ Through the family resource centers we had had really good results, in ours and as well as Mrs. (Christy) Webb’s (director of Family Resource Center of North Mississippi) certainly had. Anyway, with the leaders in discussions — and I wasn’t part of any of those discussions at DHS — they said, let’s do this greater. Let’s make a huge impact by really putting our efforts behind this. And get in the communities. (John Davis, former head of the Department of Human Services) will explain this: He really wants to get the services smack dab in as many communities as he possibly can.

(Editor’s note: Human Services awarded New’s nonprofit TANF grants of $1 million in each fiscal year 2016 and 2015, $14.3 million in 2017 and $21.5 million in 2018, according to documents Davis provided to lawmakers. By 2020, it had received over $55 million in TANF funds since the beginning of fiscal year 2017, according to a Mississippi Today review of state expenditures). 

…I really want the right information out there. It’s critical because we are doing a great job and so many people are involved, but there are negative people. Some of it may be that we need to correct it, but also it’s just because they don’t know.

What kind of things have you heard?

Nancy New: For one thing, I’ve heard that we’re getting an enormous amount of money and it’s getting duplicated … and I understand people saying that because they don’t understand. First of all, we’re not getting an enormous amount of money, just us. And I want Mr. Davis to explain that. It looks like our budget is whatever but then a lot of that money is not operating money. That goes right back out to our partners, which is great.

How much would you say is Families First operations versus funding to partners?

Nancy New: At least half — at least — for partners. Oh absolutely. That’s great because that’s helping us. When we say partners, these are people who are already getting funding directly. But Mr. Davis is wanting to make sure the people getting funded are doing what Families First needs to be done. So he’s pulling us all together.

By the money flowing through us, that allows us to even join forces together to drive the pillars of Families First. He wants to make sure if the partners are out there, and we’re doing it, everybody’s doing the right thing together and that’s addressing what Families First is supposed to be about.

Explain the genesis of the expansion in 2016 then. Was that an RFP (Request for Proposal)?

Nancy New: Yes it was.

They (Mississippi Department of Human Services) expanded or increased some of the pillars we were to address, and primarily toward workforce. Stabilizing the family and workforce. And literacy.

We had done some workforce things to some extent with out partners. More goals and objectives were written for us to address.

(Editor’s note: The State Auditor’s report revealed that former Human Services Director John Davis disregarded procurement regulations in order to award large grants to New’s nonprofit).

What specific workforce development activities does Families First offer, besides resume writing and—?

Nancy New: Right, the soft skills. We try to do so many soft skills because our partners with the community college are huge. We have wonderful partnerships across the state with our community college system and of course they focus so much on workforce, so we’re trying to get our clients, we’re trying to get them ready to go to the second step of workforce training. Ours are mostly soft skills.

(Editor’s note: Most of the community colleges that Families First for Mississippi listed as subcontract partners on their annual report did not respond to or declined to answer questions about their grants. The audit questioned the nonprofit’s TANF payments to three community colleges ranging from $62,905 to $193,701, a small fraction of the nonprofit’s $55 million Families First grant funds.)

I was thinking that there may be some direct assistance to families done through Families First but it sounds like there’s not. So I just want to make sure I understand: People can’t come here to get their lights paid. There’s no direct financial assistance being provided.

Nancy New: No. What is being provided to families — what we are finding through referrals, families are falling onto hard times and they need help immediately. We have benevolent funds, where we get donations to help underwrite some of those. For instance, a family found themselves having to have a lot of medical assistance, and they got behind on their bills, their lights and so forth, so if we have enough money in the benevolent fund to help, once we verify the legitimacy of the need, we do help them out of our fund.

How much would you say is paid out of that? Or has been so far?

Nancy New: For us, we depleted and got more donations, but every one of the requests. The requests are huge. The people need so much in the state. But, a few thousand dollars, maybe? Somewhere along that.

The 2017 federal TANF numbers came out yesterday and we have spent about $35 million more in TANF than we did in 2016, which would match with Families First coming on board. And we actually spent $1 million less in the same year on basic cash assistance to families. I wonder how you reconcile that. Is this the direction we’re heading as a state?

Nancy New: That’s a question I would like to ask Mr. Davis myself. Monetarily, we’re in a lot of meetings. I can’t answer this accurately because this is a question I haven’t thought about. This is a great question. I don’t think it’s the goal to keep money away from people, I think it’s the goal to put enough support to help the people.

Laura Goodson, an attorney and MCEC’s then-advocacy director: The way we talk about it a lot internally, and from a policy standpoint, is to put enough support in the community to help individuals stabilize themselves so they don’t necessarily need government benefits like TANF. It is not to not have them there when they’re needed and when they need to apply for them, but to help someone that didn’t have a job before, maybe was having to apply for SNAP or TANF benefits, because they didn’t have a workforce skill to get the job that would help them get a livable wage and move that wage up over time.

Not in a negative way. There are definitely people, and a lot of them in our state, who need it, and that is not something that anyone wants to deny. The idea is to try to help them also get skills.

We spent about six percent of our TANF budget on basic assistance and about half on work supports and activities. Do you think that that is the right way to divide those funds?

Nancy New: I think what we have to do is be very careful as we assess who needs what. If they’re in real true need and cannot help themselves, then I think it’s our duty as a community to help. But at the same time, I think it’s important that we support efforts in getting people to become as self reliant as possible, through education and other means of support, because that’s going to help them — I don’t want them just to survive, I want them to thrive.

I’m for giving people resources to help become very independent and gain their pride. We get a lot of clients who think they can’t go to community college or vocational training and once they come through Families First and get the soft skills and encouragement and just the confidence that, ‘I can do this.’ That’s what I want to see. Now, how much money goes here and how much money goes there. Mr. Davis is the financial person; he can really address this ’cause he is such a mastermind on all this, but I want to see the resources, whether it’s monetarily or through education, I want to see it getting right to the people.

My heart goes out to the people who may not be able to help themselves. And they’re out there. They’re really out there. And it’s legitimate. We’ve got to help those people.

Being that most of your Families First funding comes from TANF, I assume that most people you’re serving are people who are at that low-income level. The people who left TANF in the last five years made an average of $12,000 a year after leaving TANF. TANF is a work program. We say that a request for TANF is a request for a job. The people who are leaving made $12,000. If they made $12,000, they’re probably going to be coming back to Families First. How do you reconcile that? Are jobs the answer to poverty in this case?

Nancy New: We love those cases because that means they’re coming back for more help and that tells us that they want to improve even more so. That assistance to that person got him or her hopefully on the right path to improving their living environment and we’re going to do what we need to do to help them get to the next step.

Laura Goodson: Jobs is definitely a big part of it. Also, what Nancy mentioned, education. Transportation is a huge issue.

Nancy New: And child care. The two things: child care and transportation.

Does Families First offer child care or transportation?

Nancy New: In some areas we do. We work very closely with Head Start and some other groups across the state. Yes, we try to provide child care in as many areas, or we coordinate with the good existing providers already out there.

(Editor’s note: Laura Goodson clarified that the Families First centers do not provide day care to parents. Additionally, no child care providers were listed on the Families First for Mississippi subcontract partner list).

Have you really been able to track workforce outcomes since the expansion?

Nancy New: We, along with Mimmo (Mimmo Parisi, executive director of the National Strategic Planning and Analysis Research Center at Mississippi State University) and Community College, we should be able to get you some really good numbers on that. Community College, as our partners, have some really good outcomes on that. And we can find those for you. We’ll be glad to do our best to gather that.

(Editor’s note: The nonprofit did not respond to repeated follow up requests for this information. When this interview took place, Mississippi Today had an interview scheduled the next day with former MDHS director John Davis, but he cancelled shortly after Mississippi Today’s interview with Nancy New, citing a conflict, and never rescheduled).

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