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State issues damning report on Hay House

Matthew Lane • Feb 4, 2020 at 7:30 PM

KINGSPORT — State investigators have issued a report on the John R. Hay House of Sullivan County, finding that the nonprofit organization made questionable salary payments to an employee and employed convicted felons — including a registered sex offender for nearly two months.

The investigation into allegations of malfeasance was done by the Tennessee Office of the Comptroller of the Treasury in conjunction with the Tennessee Department of Corrections (TDOC) and the Tennessee Bureau of Investigation. The investigation began after the TDOC identified and reported fiscal and contractual issues at the Hay House and was limited to records from July 2017 through January 2019.

Founded in 1981, the Hay House (427 E. Sullivan St.) provided aid and assistance to people with criminal records. It ceased operations in June 2019. The nonprofit was funded primarily through an annual TDOC grant, along with some funding from the United Way and payments by residents for room and board. The Hay House was governed by a nine-member board of directors, which appointed Chuck Walsh as its director, along with other employees responsible for the day to day operations.

EMPLOYING A CONVICTED FELON

Investigators found that the Hay House employed Walsh’s son-in-law, Eric Monday, who was a convicted felon. According to the report, Monday began working at the Hay House in December 1997 as a transportation officer until March 2000, when he was hired by TDOC as a corrections officer.

In July 2000, TDOC fired Monday after he admitted to smuggling a knife to an inmate and then promising to pay that inmate to harm another inmate. Monday subsequently pleaded guilty to attempted second-degree murder.

However, in February 2014, the investigative report states Hay House again employed Monday as a case officer, eventually rising to the rank of facility manager.

QUESTIONABLE COMPENSATION

According to the report, Monday was indicted for theft while working at Hay House and received questionable compensation.

In January 2019, Monday was indicted on five counts of theft of $1,000 or less. The matter is currently pending in Sullivan County.

The indictment rose from several incidents in February and March 2018, when Monday and an offender at Hay House allegedly took items from a Kingsport store. These thefts took place when Monday was purchasing supplies for Hay House.

Investigators say Hay House continued to pay Monday after he was arrested in April 2018 and until he was terminated in June 2018 for “lack of work” due to “budget cuts.” Since he was terminated for “lack of work,” Monday was able to file for unemployment in July 2018.

Investigators say there’s more than $7,100 in questionable payments to Monday from April 2018 until June 2018. Some of his time sheets include time off for vacation and excused leave, neither of which is allowed under the policy of Hay House.

REGISTERED SEX OFFENDER

Investigators found Hay House employed a registered sex offender as a cook from August 2018 until October 2018.

Neither the TDOC grant (that funds the nonprofit organization) or Hay House policy specifically states that employees must pass a background check. However, investigators say it should be reasonably expected that the purpose of a background check would be to determine that people who supervise those with criminal records do not have criminal records of their own.

The report further lists two internal control and compliance deficiencies: that TDOC did not detect Hay House employed convicted felons and that TDOC did not detect an employee accrued and used leave in violation of Hay House policy.

Sullivan County District Attorney Barry Staubus said he intends to submit the matter to the grand jury later this month to determine if there was any criminal activity or just administrative problems with the Hay House.

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