NASHVILLE, Tenn. -- A report by state regulators raises some serious questions about potential conflicts of interests with that million-dollar Living the Dream facility near Cookeville.
A lot of the money came from the Upper Cumberland Development District.
That report, obtained by NewsChannel 5 Investigates, comes from the Tennessee Commission on Aging and Disability (TCAD) -- the state agency that controls federal and state tax dollars going to the elderly. It's what led to state auditors being brought in on the investigation.
It focuses on that million-dollar house set up by UCDD that was supposed to become a retirement home for needy seniors, named Living the Dream. For UCDD executive director Wendy Askins, the well-decorated house also became her home.
The report details what it calls a "questionable business arrangement" between Living the Dream and a for-profit company set up by Askins. called L.A. Management.
"You all caught it. We got the information from you all," said TCAD executive director Jim Shulman.
At the heart of the report is Living the Dream. It was set up as a non-profit corporation, later changed to for-profit, then back to non-profit.
To get federal and state funds to pay for care for its residents, Askins set up L.A. Management back in 2010 -- along with her deputy, Larry Webb, who was listed as president.
Then, UCDD signed a contract, agreeing to pay L.A. Management for its services.
Webb signed for L.A. Management, Askins signed for U-C-D-D.
"You cannot contract with yourself, or an entity that you get direct or indirect benefits from that -- that's state law," Shulman said. "And I'm not implying that there was anything like that. That's what's being looked at."
The report also says L.A. Management billed the state for an "unusually high amount of services" for one resident, while UCDD's public guardian program violated policy by placing a client under their control in an unlicensed facility.
That facility was Living the Dream.
"I think that it was just a misunderstanding on their part," Askins told NewsChannel 5 Investigates last week.
In her written response to TCAD, Askins sarcastically accuses the state of just "looking for somewhere to go on a rainy day."
Shulman responded, "If we think there are any problems, then we're going to send our staff out -- and that's why our staff went out on an unannounced site visit."
Still, Askins insists that neither she nor her deputy ever made any profit from that L.A. Management.
But, we've learned that, right after we started asking questions, UCDD lawyers told her to shut it down.
State lawmakers tell NewsChannel 5 Investigates that they are considering holding legislative hearings on UCDD's spending.