City Council Seeks YPI Replacement; Nonprofit Says Ex-Director Swindled Them

City Council Seeks YPI Replacement; Nonprofit Says Ex-Director Swindled Them

by Contributing Editor

Los Angeles City Councilwoman Monica Rodriguez Wednesday filed to add language to her proposal that seeks to help employees of the recently shuttered Youth Policy Institute find employment and possibly recoup their wages.

YPI operated the Youth Source Centers in the northern San Fernando Valley as its lead contractor and employed more than 900 people throughout the city, which included the North Valley Work Source Center in Pacoima, the Family Source Center in Hollywood and two day labor centers in the San Fernando Valley.

YPI announced last Thursday it would close due to financial issues to the shock of many of its employees.

“The closure of these locations creates a tremendous void for our youth, for our families throughout the city of Los Angeles, and it’s had an incredible ripple effect everywhere in the city,” Rodriguez said on Tuesday.

Rodriguez filed a motion Friday seeking a replacement contractor for YPI.

City Councilwoman Nury Martinez said she had received complaints from former YPI employees saying they would not be paid for their last week of work.

“Is that illegal?” Martinez said at Tuesday’s City Council meeting. “What are we doing to help … the 900 people that were working for YPI and worked for an entire week? For those people to be out of basically their hard-earned money is not okay.”

City officials said they’re working with wage-theft investigators to find out what happened with employees’ paychecks.

YPI full-time employees will be invited to a two-day job fair on Thursday and Friday, and about 450 of them are looking for new jobs. The others are or have been in the process of transferring to new employment, city officials said.

Employees who found out about the closure the day it was announced were led through an initial job fair hosted by the city’s Housing and Community Investment Department, city officials said, and some interim services were brought in to the Hollywood Resource Center and other areas.

The former executive director of YPI, a major nonprofit organization that served hundreds of families throughout Los Angeles, was accused by the organization of misusing $1.7 million of the organization’s funds, according court documents examined by the Los Angeles Times, which first reported the information Wednesday.

Employees of YPI alleged in federal court documents in a Chapter 7 bankruptcy filing by former director Dixon Slingerland, who was fired by the nonprofit’s board in September, that he used the organization’s money for many unauthorized and personal expenses, including private tutoring for his children, contributions to his wife’s pension, and “lavish” dining, travel and entertainment, according to The Times.

YPI also alleged Slingerland used the unauthorized funds for political campaign contributions, which would violate federal tax laws.

The court documents allege this unauthorized spending went as far back as 2014, The Times reported.

In an email to the Times, Slingerland denied the allegations.

“I have made several attempts to meet with YPI leadership to resolve any and all issues, including the fact that YPI still owes me money,” Slingerland stated. “YPI has refused to engage in discussions or provide me with the necessary detail needed to clear up these matters.”

An anonymous source representing Slingerland told The Times the organization’s funds were spent on Slingerland’s retirement benefits, not his wife’s, and that those payments had been approved by the board.

The bankruptcy filing, according to The Times, did not say which political committee received the allegedly improper contributions.

Robert Sainz, the assistant general manager of the Economic Workforce Development Department, said the city had staff at all locations the day YPI closed to collect files for each of its clients and referrals.

“We’re hoping to have services up and running within the next two or three days,” Sainz said on Tuesday.

Sainz also said YPI was required to file annual third-party audits for federal funding, and last year there were no significant findings, but the latest audit identified problems.

“If this organization did not close up shop as abruptly as it did, we would have actually had them on sanction, and we would have been working with them to address those weaknesses,” Sainz said. “We also have internal audits that actually happen on our fiscal side, and there’s fiscal auditors that go out at least once a year, that go through the specific city contracts.”

Sainz said they had reviewed weaknesses with the YPI contracts that it asked the organization to address. HCID had two contracts, worth a total of $808,000 that were tied to other funding sources, with YPI when it closed.

YPI, which provided job training, after-school programs and other services, spent $1.3 million more than it took in during the 2017-18 fiscal year, according to a 50-page accounting report submitted to City Hall last week and obtained by the Los Angeles Times.

Just two years ago, Los Angeles Mayor Eric Garcetti praised the YPI for securing $30 million for tutoring and other services, and last year Garcetti announced the nonprofit organization’s n a new city job training program, according to The Times.

Interim YPI Chief Executive Dan Grunfeld, hired last month as part of an effort to save the organization, said last week he and the board of directors had made an “incredibly difficult” decision to shutter the decades-old nonprofit.

“We have explored every option, but in the end, we have realized that we cannot keep it going,” Grunfeld wrote in a letter to Youth Policy Institute’s employees, according to The Times. “I wish this were not so.”

Grunfeld told The Times the organization had reached agreements to transfer after-school programs on 80 campuses to another group, the Santa Ana-based nonprofit Think Together. The move should allow at least 400 of the group’s full- and part-time workers to remain employed, albeit with another organization, he said.

Earlier this month, the organization laid off 26 full-time employees, bringing the total this year to 47. City agencies have withheld funding to the group because its financial reports are past due.

Garcetti spokesman Alex Comisar told The Times city officials were concerned with the audit’s findings and are working to make sure services will not be interrupted. Economic development officials went to the nonprofit’s offices last Thursday to review its finances, he said.

Slingerland, who ran the organization before being fired last month, was named as a co-host of at least seven Garcetti fundraisers during the 2013 mayoral campaign, according to city records.

In their report, auditors concluded that YPI had made unauthorized payments to Slingerland, who had an annual salary of about $400,000. Slingerland’s credit card incurred numerous charges that “lacked a clear business purpose” and his expense reports lacked documentation, auditors wrote.

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All credit goes to Contributing Editor
Originally published on https://mynewsla.com