PICO BOULEVARD — The Pico Youth & Family Center has six months to prove to the City Council that it has a handle on its finances and a clear mission to help those who are most at risk of joining a gang or landing behind bars.

If not, the center, which provides counseling, homework and resume assistance and other support to kids and young adults, would be in jeopardy of losing $307,000 in grant money from City Hall.

Losing that funding would be a significant blow to the nonprofit, which relies heavily on City Hall funding to pay its employees and to purchase materials.

The Santa Monica City Council Tuesday signed off on a “last chance” agreement with PYFC giving the organization until December to refocus after a report by the Human Services Division raised concerns about its accounting practices, volatility in its governing board and alleged lack of clarity about its mission.

The council also agreed to spend $25,000 so that PYFC could hire Social and Environmental Entrepreneurs, an outside consultant, to help it reorganize its management structure and institute best practices so that it can continue to mentor youth.

PYFC Executive Director Oscar de la Torre, a member of the Santa Monica-Malibu Unified Board of Education, acknowledged the small nonprofit has had problems in the past, but that it rectified those mistakes, performed an audit and now is in the process of assessing how it will serve youth over the next decade.

He said the amount of time his organization has been given by City Hall to reorganize and be evaluated is too compressed and could set PYFC up for failure, something he believes is the ultimate goal of a faction within city government because of his prior criticisms of the Santa Monica Police Department and certain policies enacted by the council.

He also was upset with the condition that the center serve only those who are aged 16 to 24 and are the most difficult or troubled, saying he would rather continue helping kids as young as 14 who are just as vulnerable to joining gangs, as well as those who are not in danger of dropping out but are good students just looking for a place to go after school where they feel comfortable.

de la Torre said youth who are on the right path can serve as role models for others and help with homework assignments or provide tips on how to study better for exams.

While he is committed to working with the hardest cases to continue combating gang violence, an important goal for the center, he said that PYFC has evolved over the last decade and city officials should recognize that. As gang violence has been reduced, the focus should be shifted to prevention and reaching kids before they think about joining a gang.

“It’s a bit overwhelming and my fear is that we are being set up for failure, considering that all of this new change will be evaluated in a six month period to determine if we continue to be funded or not,” de la Torre said Thursday.

He is contemplating whether or not to continue as executive director or possibly close the center because of the conditions imposed by the agreement.

“I think in the next two weeks we will determine if this is viable or not,” de la Torre said.

Julie Rusk, director of Human Services, said her staff has been working with PYFC leadership on the agreement, which led to some changes to what she described as a fair agreement to measure success. Time frames were extended and the number of clients to be served was reduced to 50, reflecting the difficulty in reaching some of the most jaded.

“We really want the focus to be on older youth,” Rusk said. “They really don’t have another place to go.”

Rusk said the center, which is independent of City Hall, could continue to provide counseling or after-school programs to younger kids if it so chooses, but would have to find additional funding to make it work.

“We’ve never told them to turn people away,” she said. “We are just looking at this particular group [of older youth].”

Rusk said the center is not being unfairly singled out because of who is at the helm. Instead of turning its back, City Hall is investing more money into the center to help it continue operating and find other means to expand fundraising.

The main reason the last chance agreement was drafted was because audits found that there were $30,000 in excessive payments in retirement plans and other extra payments to employees, Rusk said.

Despite the problems with accounting, the services provided have made a positive impact as several members of the center testified before the council about how their lives have improved since attending PYFC. Some said they came from broken homes and were tempted to join gangs but found a new, loving family in PYFC staff and fellow students. Others said that although they never have been in trouble they attended PYFC because they felt comfortable there and needed advice.

“They’ve helped me out a lot,” said Manny Bravo, a student at Santa Monica College who frequents the center, “and showed me the right way.”

Amanda Seward, chair of the PYFC board and an attorney, acknowledges the difficulties and hard work ahead for the center, but said she is committed to “get it done.”

“We’ve always recognized that we needed to improve,” she said. “[City staff] didn’t tell us anything we didn’t already know. The good news is there was no fraud …. More than anything else it was a lack of controls. Now it’s about getting everyone on the same page and committing to making things right. We welcome the help.”

kevinh@smdp.com