PICO BLVD — City Hall is threatening to pull the plug on one of the few organizations that serves at-risk youth in Santa Monica over problems with financial accountability and oversight.

According to a report, the Pico Youth and Family Center (PYFC), which receives $307,000 in local grant funds, has been plagued by bad accounting practices, volatility in its governing board and a lack of clarity about its mission despite years of direct involvement by city officials.

That’s resulted in $30,000 in excessive payments in retirement plans and other extra payments to employees.

As a result, the Human Services Division, which oversees municipal grants to nonprofits, has recommended that the City Council approve a “last chance agreement,” which would give PYFC six months to bring in an outside organization to fix its financial and organization.

PYFC Executive Director Oscar de la Torre, a member of the Santa Monica-Malibu Unified Board of Education, acknowledged that the small nonprofit has had problems in the past, but that it rectified those mistakes and has continued to serve at-risk youth.

“The report says nothing about the impact that we’ve had,” de la Torre said. “It fails to mention that gang violence is at an all-time low and the hundreds of young people that we serve.”

The seven-page report details over a decade of history between City Hall and the leadership of PYFC from the days that it was a program under the stewardship of larger nonprofits to the time that it became a stand-alone agency.

According to the report, three outside organizations came in to provide organizational support and structure to PYFC.

Each left within six months to a year of taking over operations because they could not give the program the level of oversight that it needed to be successful, according to the report.

In some estimations, it was when PYFC struck off on its own and incorporated that problems began. The small staff had difficulty balancing the dual responsibilities of working with youth and managing paperwork.

Amanda Seward, chair of the PYFC board, described it as a matter of experience and also of necessity. The small organization has to deal with extreme circumstances like shootings in the community, and it’s hard to keep boots on the ground and behind a desk.

“If there’s a report due to the city in two days, they might not do that report because they’re focused on the shooting,” Seward said. “We need someone who’s always focused on the administration who doesn’t get tied up into all of those things.”

It created a barrier between the organization and its critical funding source, City Hall, which hasn’t received a financial report since 2004 that was on-time, complete and accurate, according to the report.

The group had gone through four accountants in seven years, financial reports were not making it to City Hall and when they did, serious questions were raised.

City Hall began tightening its oversight of PYFC in July 2011 by attending board meetings and conducting regular reviews of financial controls.

An October 2011 visit revealed missing grant money tied to three extra payroll checks — two to former Office Manager Yolanda de Cordova and one to de la Torre — and $28,088 in excess payments to retirement accounts.

All but $12,816.80 of that money has been returned, and de Cordova and one accountant no longer work with the center.

The remaining money linked to retirement accounts is still under dispute between City Hall and PYFC.

Most if not all of that money was funded through the municipal grant, which is another point of contention between City Hall and the organization.

Each grant has a 25 percent cash match condition attached to it, meaning that the group has to raise at least 25 percent of its grant in order to be eligible for that money, said Julie Rusk, Human Services manager with City Hall.

According to Rusk, last year was the only time that PYFC has met its cash grant.

Other issues, like inconsistent hours of operation and working with a wider range of youth, also drew the eye of City Hall, according to the report. City officials want PYFC to be leaner and get back to its roots by focusing on the population that is most at risk of joining gangs. That means focusing on local youth aged 16 to 24 who have either joined gangs, have served time in jail or juvenile hall, or dropped out of local high schools.

The organization has six months beginning July 1 to get its house in order with the help of the organization Social and Environmental Entrepreneurs (SEE).

It will also refocus its attention on its target population, she said.

“Serving this population is such an important and unique mission,” Rusk said. “That’s why we’re going to such lengths to make it a success.”

In de la Torre’s eyes, the additional oversight is welcome, but it would be an overstep to say that the organization had failed.

“In our 10 years of service, we have supported many young people and are proud of our work. We are always willing to improve and strengthen ourselves in the areas where we have not been so successful,” de la Torre said. “But no one can make the case that we are a failure.”

ashley@www.smdp.com

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