In one year, Belcher received $914,412 from CASE.
A month after the DHHR released the monitoring report, CASE fired Carroll and another employee who worked in the Wheels program. The agency stopped doing business with Belcher.
CASE also challenged the DHHR's findings in a 24-page rebuttal report.
CASE officials maintain that the findings were false or were a "miscommunication" between CASE and DHHR staff members. They say they bought vehicles at "blue book" value, used multiple vendors and distributed dependable cars to clients quickly.
"Over the first 18 months, we had to work the bugs out," said Sandra Graham, director of CASE's Wheels program. "We felt the program was strong. It did tremendous amounts of good. It was of great value to the people it was intended to help."
Belcher said he nearly lost his business after he dropped local customers to help CASE.
"They were in trouble," Belcher said. "They had no money. I took the money out of my own pocket and bought cars.
"Then they dumped me. I thought they'd take care of me, but they didn't. They said I was getting too much of their money."
Belcher said he saved CASE thousands of dollars by monitoring unscrupulous mechanics who inflated prices and tried to perform unnecessary repairs on CASE cars at garages across Southern West Virginia.
"They would tell them they needed this and that done," Belcher said. "I told [CASE] there's no problem with those cars."
CASE and another Wheels program agency received extra money in June 2002 because of unexpected repair costs. CASE got an extra $400,000.
State officials confirmed that mechanics were overcharging the program across West Virginia.
"Repair costs for both of these contractors have continued to increase," wrote DHHR program manager Diane Crump, "as mechanics and garages have begun to recognize this program as a source of income, particularly in rural areas of the state where there are few garages available."
Belcher and Carroll said "welfare cars" depreciated so quickly because program participants abused them. They burned out motors, ripped up transmissions and crashed vehicles, they said.
"They did not screen the people," Belcher said. "They put people in cars who got their driver's licenses yesterday."
State scraps leasing program
State officials praise the three-year Wheels-to-Work program.
But in July, they quietly decided to scrap it for "a more efficient and cost-effective" model in which a single agency will collect donated cars and give them to welfare recipients.
The donated-car program will cost about $1 million a year, versus the $8 million-a-year Wheels program.
Some people questioned from the beginning whether the Wheels program cost too much.
Two years ago, the state's Temporary Assistance for Needy Families program, which receives about $110 million in federal funds every year, was facing a budget shortfall. An independent panel met to recommend spending cuts.
Panel members called the transportation money for welfare recipients "essential." West Virginia is the second-most rural state, and few counties have public transportation. In surveys, welfare recipients identified transportation and child care as their two biggest hurdles.
Still, the panel recommended slashing $4 million from the Wheels program. They determined the cuts wouldn't have much of an effect on low-income residents.
"There seemed to be a lot of overhead and administrative costs," said Susan Sobkoviak, a panel member and a state lobbyist for the National Association of Social Workers. "There didn't seem to be anyone who said the $4 million had to stay there."
The Wheels-to-Work program officially ends Dec. 31. People who made lease payments through the end of August received titles to the vehicles, even if the lease term hadn't expired.
In recent weeks, state legislators have started asking questions about the new donated-car contract. But they've paid scant attention to the lease program, after hearing positive reports about Wheels-to-Work from top state officials.
The DHHR audited each of the four nonprofits, but those reports never left the department's downtown Charleston office.
Two agencies weren't reviewed until after the DHHR decided to abandon the leasing program.
And the department didn't conclude one of those reports until last week. The report for the Human Resources Development Foundation, a nonprofit division of the AFL-CIO, was released just days after the Sunday Gazette-Mail requested it, and after the agency was awarded the $1 million grant for a new program.
When DHHR officials gathered information for their reports, they didn't interview a single Wheels participant about the program and cars.
The CASE monitoring report wasn't shared with legislators, and the DHHR continued to distribute millions of dollars to the Mercer County group.
In an interview with the Sunday Gazette-Mail last week, department officials defended their oversight. They noted that they ordered CASE to "cease and desist" its relationship with Belcher. They also directed CASE to follow a "corrective-action" plan.
DHHR officials said they didn't turn over their findings to legislators because auditors "didn't believe there was any fraud."
Taking cars, jobs away
Seven months have passed since Edith Holbrook's car caught fire on a winding Lincoln County road. She never got another car. She never got another job.
Last week, she sat with her two children at the kitchen table inside her half-built, particleboard house.
Holbrook no longer receives welfare. She doesn't qualify because she got married in September to a man who works for the Lincoln County Public Service District. Still, she and her three kids struggle to make ends meet with her husband's paycheck.
"Sometimes we give up food to pay bills, sometimes we skip bills to eat," she said.
She kept the documents related to her Tercel and the Wheels program. She still has the repair bills, the fire department report, the lease-termination letter. She's even called the governor's office to complain.
A Wheels program official responded that Holbrook's complaint is "basically accurate," according to a memo obtained by the Sunday Gazette-Mail. "However, it appears that at least part of the damage to her original vehicle was due to abuse or neglect" and that she must "make arrangements to pay for the damages."
Holbrook said she wouldn't pay a dime more into the program. She already lost $1,800, and a job. She's trying to find a lawyer.
"It's a program that was supposed to keep people in cars and jobs," Holbrook said. "Not take them away from them."
MONDAY IN THE CHARLESTON GAZETTE: JUNKED CARS, LOST JOBS: Other agencies continued to follow CASE's questionable spending practices. One was rewarded with a new $1 million grant.
To contact staff writers Eric Eyre and Scott Finn, call 346-8964 or 357-4323.