State officials are expanding their review of how a Hartford nonprofit spent more than $15 million of public funding after a forensic audit found signs of potential fraud.
The state Department of Economic and Community Development (DECD) announced Tuesday it will direct an auditing firm to comb through financial records from numerous organizations connected to the Blue Hills Civic Association.
BHCA, a Hartford nonprofit, distributed millions in state funding to its partners, passing on money it received through annual appropriations in the state budget.
Because of poor record keeping and other deficiencies, auditors said they were unable to track all of the money, leading them to recommend a wide-ranging review of entities funded by BHCA.
Auditors documented patterns of conduct that they said "strongly suggest potential fraud and misappropriation of public funds by BHCA and related parties."
The audit, made public on Tuesday, also provides new insight into state Sen. Doug McCrory's role steering BHCA's activities. Auditors uncovered records that indicate the nonprofit acted under McCrory's direction to award funding to people and groups he selected.
A grand jury subpoena served on the state last year shows federal authorities are now investigating McCrory and his connection to some of those same entities. Among them is a consultant who provided services to BHCA, and received money from several state programs.
McCrory is an influential Democrat who represents parts of Hartford, Bloomfield and Windsor. He has not responded to multiple requests for comment.
Answering questions from reporters Wednesday, Democratic Gov. Ned Lamont said he believes McCrory should "step back" from his leadership positions in the legislature in light of the facts uncovered by the audit.
"Maybe Doug will come back and have some response and tell us what happened," Lamont said. "But right now, I'd be very strict. ... I'm not sure he should stay in the positions he's in right now. Otherwise, there's an election coming up in less than a year."
State Senate Republicans on Wednesday called for legislative hearings into how the state funds nonprofits. Members of the GOP previously called for stronger oversight of legislative earmarks, which allow lawmakers to direct funding to favored groups with little transparency.
State Sen. Jeff Gordon, a Republican who represents Woodstock, said in an interview the Government Oversight Committee should take up the issue this year.
"We might need to change some laws to have better oversight on taxpayer money when we're talking millions and millions of dollars," Gordon said.
Pattern of poor oversight
The state's economic development office froze funding to BHCA last year and hired the firm Clifton Larson Allen to conduct a forensic audit of its programs after the organization disclosed it lost $300,000 in a wire transfer fraud.
Auditors studied procedures at the organization from January 2020 through June 2025. They found BHCA operated without adequate policies, oversight or accountability mechanisms.
The nonprofit routinely sent money to other organizations without firm agreements in place, and failed to document how it was used, or follow up on discrepancies in spending, the audit found.
Auditors determined at least $208,000 in payments either violated standards that prevent conflicts of interest, or were used to pay for work that wasn't done.
The list of payments in question includes $168,000 provided to consultant Sonserae Cicero and a company she controls, SHEBA Consulting, LLC.
The money was intended for a variety of tasks, including updating the nonprofit's employee handbook and board policies, and providing training for board members and staff, according to the audit.
Records show Cicero billed the nonprofit for 300 hours of work on the handbook alone, at a rate of $280 an hour, according to the audit. However, auditors found a BHCA employee was tasked with carrying out the project, and there was "no evidence of substantive work product, meaningful policy updates, or documented involvement" by Cicero.
The lack of supporting documentation and other factors "strongly suggest potential fraud and misrepresentation," they concluded.
"The findings underscore a broader pattern of inadequate internal controls, ineffective oversight, and a disregard for proper financial management, all of which enabled questionable transactions to occur without detection or accountability," the audit reads.
The chairperson of BHCA's governing board did not respond to a request for comment.
In a letter to the community in April 2025, former Blue Hills Executive Director Vicki Gallon-Clark stressed the organization’s financial records were routinely audited in the past, and “have always been transparent and strong.”
Gallon-Clark also did not respond to a request for comment.
Consultant under scrutiny
Cicero is a focus of the subpoena served on DECD last year, which orders the agency to produce communications between state officials and McCrory concerning Cicero and entities she controls. The subpoena also instructs state officials to compile “all documents concerning any personal or non-professional relationship” between McCrory and Cicero.
Cicero, a human resources professional, is CEO of a nonprofit that has received hundreds of thousands of dollars in public funding in recent years, including from DECD, state records show.
Her organization, SHEBA Resource Center, Inc., also has professional relationships with a range of social services organizations in the Hartford area, according to documents it submitted previously to the state.
In a statement provided Wednesday, Cicero's lawyer did not directly address the findings of the audit, but said Cicero "has become a voice in and for the community" through hard work and dedication.
"Those who know her, know what she stands for," attorney Nick Oberheiden said. "Those who don’t know her, may use the obscurity and rumors of an unconfirmed investigation, to write about her personal life, work ethics, and business dealings."
"It won’t rupture the trust people have in her. It won’t break her down," Oberheiden said. "If challenged, Ms. Cicero will stand firmly by her ethics and values and defend them against yet unknown sources."
Internal records show McCrory's control
BHCA's internal communications portray McCrory as a driving force behind major funding decisions.
In one example, material from a January 2024 board meeting lists 11 organizations the nonprofit picked to receive pass-through funding from the state. Documents from another meeting later that month read: "Senator McCrory identified the organizations in this packet based upon his experience and knowledge of each agency. He also determined the allocated dollar amount for each agency," according to the audit.
The list includes the nonprofit controlled by Cicero, known as SHEBA, or the Society of Human Engagement & Business Alignment, which was tapped to receive $600,000, according to the audit.
Documents reviewed by the auditors suggest McCrory also arranged for groups that received state dollars from BHCA to pass on portions of the money to other organizations, according to the audit.
In one instance, an October 2024 email shows a local YMCA was intended to pass $25,000 it received from BHCA to an area gospel church, according to the audit. BHCA's executive director wrote in an email that "Senator McCrory has allocated funds to the YMCA that are designated for" the church, according to the audit. Auditors were unable to determine if the transfer ultimately took place.
The document also highlights McCrory's role in delaying BHCA's disclosure of the wire transfer fraud to the state. A timeline the organization created shows the theft occurred in October 2024. Staff became aware of the missing money in December 2024, but didn't alert DECD until March 2025.
According to the audit, before doing so, BHCA's executive director met with McCrory. She reported to the nonprofit's staff several days later that McCrory wanted the organization to wait until receiving an FBI investigative report before notifying the state, the audit states.
State promises tighter controls
Reflecting on the findings, DECD Commission Daniel O'Keefe said it demonstrates budget earmarks require greater scrutiny.
Auditors didn't fault the state's economic development office, finding DECD followed established protocols in executing its administrative and oversight responsibilities, such as enforcing grant reporting requirements.
However, the firm suggested steps to strengthen grant monitoring, including verifying how organizations that receive pass-through funding from another group use the money.
O'Keefe said DECD will immediately hire more staff to monitor groups that receive funding directed by the legislature.
The state's budget office also issued a new policy requiring more due diligence on earmarks before they're awarded, and creating a process for state agencies to withhold funds.
In a prepared statement, Lamont called the audit's findings "deeply troubling," and said they underscore why the state needs stronger guardrails around funding directed by the legislature.
"At the same time, we remain committed to supporting legitimate community organizations," Lamont said, "but that support must be grounded in strong oversight, clear accountability, and rigorous safeguards that protect Connecticut taxpayers."
