Nonprofit Run by Elected Official Could Lose Its City Funding

A school board member is facing scrutiny from  for the way he's running a nonprofit that caters to youth in the Pico neighborhood.

Santa Monica city staffers say there are problems with oversight and accountability, including multiple payroll and accounting errors, at the , and are asking the City Council to put the organization on notice that it could be stripped of hundreds of thousands of dollars in grant money.

The council is being asked to vote Tuesday night on what staffers in the city's Human Services Division are calling a "last chance agreement." Under the six-month agreement, the city would hire an independent agency to oversee and conduct all of the center's financial operations and a consultant to "provide technical assistance and oversight of" the executive director.

The founder and executive director of the Pico Youth and Family, Oscar de la Torre, did not respond to questions about specific accusations made in a report filed by the Human Services Division, but said generally, the staffers' report is biased and contains inaccuracies.

If the terms of the agreement are not upheld, city staffers recommend complete de-funding of the organization.

It receives $307,532 yearly to provide cultural arts programs and social services, such as counseling, leadership development and tutoring, to 180 youth ages 14 to 24 who live or attend school in Santa Monica. The grant from the city accounts for a majority of the center's revenue, according to its tax documents. The latest 990 form available online is from 2009, when it reported a total of $414,250 in revenue.

Concerns have also been raised that the center has taken on a number of social justice causes and community organizing efforts that go beyond the heart of its mission of keeping teens out of gangs.

"This expansion of mission, while worthy, has diverted program resources from PYFC’s core mission," staffers wrote in their report.

"I'm out doing stuff like this," de la Torre said Monday after s. He's also been seen recently marching with . "But they want me out shooting basketballs with kids."

In their report, city staffers cite an incident in January 2012, when de la Torre reportedly gave same-day notice to city staffers that the center was closing for a planning retreat. Later, city staffers say they learned there was no retreat. Instead, they say three full-time Pico Youth and Family Center employees took two youth to Arizona to participate in a coordinated protest against the elimination of the Tucson Unified School District’s Mexican American Studies program. Closure of the center and the trip itself occurred without informing the organization's Board of Directors, staffers said.

They also say there's no way of ensuring that when he's on the clock, de la Torre is strictly conducting center business, not school or community work.

"Given the Executive Director’s dual role as an elected school board member and agency administrator, over the years there have been concerns about conflicting roles and difficulty in assessing whether the Executive Director is acting on behalf of the PYFC, as [a] school board member or an independent neighborhood leader," staffers wrote in their report.

As for accounting, in August 2010, "after several rounds of inquiry," city staff say they learned that de la Torre and the nonoprofit's office manager received duplicate payroll checks. They say he repaid those checks "only after" the error was uncovered by the city and reported to the center's chair of the Board of Directors, who "demanded repayment."

City staff say they also discovered that the center made excess retirement contributions on behalf of employees ($12,171) and pension payments over a five year period that could not be verified ($15,917). The city revoked $28,088 in grant funds and requested reimbursement by Feb. 17, 2012. They report that the city received an initial payment, but there is still $12,816 outstanding.

De la Torre did say that one of the alleged bookkeeping errors was found by a Pico Youth and Family Center accountant, not by the city. He questioned if any of the issues raised by city staffers were so egregious, why they waited until just recently to propose cutting the grant funding.

The Pico Youth and Family Center was established after July 1999, when in response to a number of gang-related shootings in the Pico neighborhood, the city set out to fund a program that would assist the most troubled, vulnerable, "gang involved" youth in Santa Monica. It looked for organizations that targeted youth ages 16-24 and who had dropped out of local schools, were enrolled at  and/or who had criminal records.

The changes recommended at Tuesday night's City Council meeting are estimated to cost the city an additional $25,000.

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