By Cindy Schroeder
The Cincinnati Enquirer

COVINGTON - The troubled Northern Kentucky Community Center is the focus of a state police investigation into possible misappropriation of tax dollars.

A lawyer representing one of two competing boards struggling to untangle the nonprofit agency's confusing finances said the center could soon be in receivership.

Covington lawyer Bob Sanders said he plans to file suit within two weeks seeking appointment of a receiver. The court-appointed receiver would take control of the Northern Kentucky Community Center's assets in an attempt to save the debt-ridden agency from foreclosure.

"In my opinion, the center's in bad shape," Sanders said. "The doors are padlocked. They can't pay their mortgage or their utility bills. They've lost their funding from the city, United Way, state and federal grants, and private donations. And the people who worked for the center can't even get their W2s from the center so that they can file their tax returns for last year."

A Kentucky State Police unit specializing in white-collar crime is examining the agency's financial records for possible misappropriation of funds, Sgt. Phil Crumpton, a Kentucky State Police spokesman, confirmed Thursday.

Crumpton said he didn't know what prompted the investigation, how long it was expected to take, or who the possible targets were.

But people interviewed by state police said authorities wanted to know if local, state and federal tax dollars allocated for center programs were used for their intended purpose.

"If the money did not go to support the social service programs it was intended for, then somebody's in a heap of trouble," Sanders said. Based on his conversations with state police, Sanders thinks authorities are seeking an accounting of money the state of Kentucky put into the center's child care and food programs.

Covington Mayor Butch Callery said police asked City Hall employees and elected officials about federal Community Development Block Grant money the city had given the center last year to put people in emergency housing. Callery said the money was never paid to the Housing Authority of Covington, as required.

Sanders, who served on the Northern Kentucky Community Center board in the 1970s and '80s when its members were a virtual Who's Who of Northern Kentucky and the center was a respected social service agency in East Covington, also will be seeking volunteers "to serve on a newly constituted board of directors that will help put the agency back together," he said.

Closed since May, the center is the former home of Lincoln Grant School serving Northern Kentucky's African-American population in the days of segregation. In the 1970s, the community landmark at 824 Greenup St. became a social service agency for East Covington, providing everything from youth activities to educational and food programs.

Sanders represents a center board led by Eastside resident William Walker that formed last June after the original board split over the firing of Executive Director Rollins Davis and Board President Clifford Cooper for mismanagement. For two years before the split, the center had battled accusations of poor recording keeping, non-payment of bills and weak administration.

Walker said the board that he leads has approached a Northern Kentucky man who's familiar with the operation of social service agencies about taking leadership of the troubled center, once the agency is put into receivership. If hired, the man, whom Walker would not identify, also would help the board develop a five-year plan for the agency.

Walker said the shuttered center represents "a sad state of affairs" as far as the neighborhood's concerned.

"Everything in the Eastside revolves around that building," Walker said. "It's within walking distance for most of the community, and for years, it's provided all kinds of vital services. A lot of people - even those who've moved away - have a sense of pride in that building because that's where they graduated from. It's an important landmark that we don't want to see disappear."

E-mail cschroeder@enquirer.com