The former executive director of Just Food — who until last week also was the mayor of Lawrence — intentionally misled board members about a variety of financial matters, the nonprofit’s board has determined.

Jeremy Farmer, 32, dismissed the organization’s outside accountant without the board’s knowledge more than a year ago, an attorney who is working with Just Food’s board said Friday. Without an accounting firm reconciling the nonprofit’s books, Farmer was able to leave more than $61,000 in federal and state payroll taxes unpaid, said Lawrence attorney Dan Watkins.

In one of his few statements about the matter, Farmer previously told the Journal-World that “nothing was done intentionally” regarding the unpaid taxes but rather was just a matter of his “not doing it right.”

In this file photo from 2011, Jeremy Farmer is shown in his role as executive director at Just Food, 1200 E. 11th Street.

Watkins said the board’s investigation into the matter makes it clear the matter was not just an oversight on Farmer’s part.

“I would say his limited responses don’t seem credible,” Watkins said.

Watkins also said of Farmer: “He misled board members.”

Watkins said the organization is still trying to determine whether there is information that should be turned over to prosecutors for possible criminal charges against Farmer.

“That is to be determined,” Watkins said. “No conclusions have been reached on that at this point.”

Attempts to reach Farmer for comment were unsuccessful Friday.

Farmer last week resigned from his position at Just Food, and then two days later resigned his position on the Lawrence City Commission, and paid the city for about $1,100 in personal expenses that had been charged to his city credit card after they were questioned by city administrators.

The Just Food board of directors sent a message to supporters on Friday afternoon, and said Farmer’s mismanagement of the food bank — which is the largest in Douglas County — shocked them.

“Our board was shocked and disappointed to learn that Mr. Farmer regularly ignored and circumvented internal control procedures that were put in place to avoid the financial issues we are currently facing,” Kristi Henderson, the board’s president wrote in the message.

Kristi Henderson

Among the allegations:

• Farmer dismissed the agency’s accountant “without board consideration or knowledge, and misrepresented an ongoing relationship.”

• He submitted the agency’s 2014 income tax return to the local United Way for purposes of gaining funding, but never filed the tax return with the IRS. Watkins said board members believe it was wrong to have presented the incomplete tax return to the United Way. Watkins said Just Food is working to repair its relationship with the United Way, which has been a key funder of the food bank.

“We very much want to continue working with them as a key partner,” Watkins said. “We’re going to make every effort to work with the United Way to have it be satisfied that our operations are working as they should be.”

Watkins said Just Food is not in imminent danger of closing its doors. He said the organization does have enough money in its bank account to continue funding operations. But he said the organization does not have enough money to pay all of its tax liabilities at once and still be able to fund operations.

The nonprofit is working on payment plans with both the IRS and the state of Kansas. Originally, it was only reported that federal withholding taxes were unpaid. Watkins said a review has found that there is about $6,100 in unpaid state withholding taxes. The amount of unpaid federal withholding taxes is now estimated to be just less than $56,000. Previously it was believed the taxes went unpaid for all of 2014 and into 2015. Watkins said it now appears there may have been unpaid taxes in portions of 2013, as well.

Watkins said the survival of the food bank will depend upon reaching agreements with the taxing entities, and also successful fundraisers by the nonprofit.

“Just Food needs help from its supporters right now,” Watkins said. “It needs help both with its food mission and with getting back to even with the taxing authorities.”

Watkins said, thus far, discussions with the taxing entities are going well.

“We’re being transparent with them about the situation, and we’re hopeful,” Watkins said.

Watkins said the board became aware of the unpaid taxes in “late July.” The board became aware when an IRS agent came to the Just Food offices. Watkins said it is now clear that the IRS had sent previous notices to the organization, but those notices were never communicated to the board.

Watkins said the board is still determining what happened to the more than $60,000 in payroll taxes that were included in the organization’s budgets but were not paid. Watkins said it appears that the money was used to cover other operational expenses. He said the money was not set aside in reserve to pay the taxes.

Among the operational expenses the organization pays is the salary of its director. Farmer’s salary in 2012 was about $30,000, but the board gave him an almost 100 percent raise the next year to nearly $60,000, according to board financial records.

Watkins also confirmed that an audit of the organization’s finances was not completed for 2014, nor had Farmer taken any steps to schedule an audit. The board has since hired the Lawrence-based accounting firm McFadden Group to conduct a full financial review, and the board is in the process of hiring a firm to conduct an audit.

It is not clear from conversations with Watkins how the Just Food board went for such an extended period of time without realizing that an outside accountant was not working for the organization. Previously, an outside accounting firm handled the organization’s tax returns and payroll processing.

“Every nonprofit relies on its director,” Watkins said. “When they let you down like Jeremy did, you don’t expect that. It was kind of a bolt out of the blue.”

The board is continuing on with fundraising activities. It has scheduled a “Chef’s Table” dining fundraiser for Thursday at the Cider Gallery. Watkins said members of the public can give to the nonprofit knowing that the organization has a system in place to safeguard their donations.

“The board is very aware of the need to make sure people’s donations are used in the way people want them to be,” Watkins said. “There is a heightened awareness from the board. There is certainly a heightened awareness.”