By Jorge Casuso

May 21, 2012 -- The City has given the Pico Youth and Family Center (PYFC) six months to shape up or lose its funding after a financial monitor found irregularities in the non-profit agency's records, including "unexplained salary overages" for its top staff, according to a report by the City.

The report from the Human Services Division to the City Council also questions PYFC Executive Director Oscar de la Torre's dual role as an elected School Board member and administrator of the agency, which has received "well over" $3.8 million in City funds since it was started 12 years ago.

"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 School Board Member or an independent neighborhood leader," the seven-page report stated.

According to the report, de la Torre was issued a duplicate payroll check in October 2010, and the office manager was issued two duplicate payroll checks in October and November 2010.

The duplicate payrolls were discovered after "several rounds of inquiries" by City staff and were repaid "only after City staff disclosed the duplicate payroll checks to the PYFC Board Chair and demanded repayment."

The monitor also found that the center -- which receives an annual operating grant of $307,532 from the City --made $12,171 in excess retirement contributions on behalf of employees and could not verify $15,917 in pension payments, which are required by federal law to be deposited into a qualified employee plan.

City staff requested reimbursement of the $28,088 by February 17, according to the report. The center made a payment in March and another payment this month, but still owes the City $12,816.80.

Over the past seven years, PYFC has had four different bookkeeping or accounting firms, with the current accounting firm giving its notice of resignation in March, according to the report.

"Frequent turnover of accountants hired by the PYFC has resulted in lack of internal controls, incorrect recordkeeping and inaccurate accounting practices," the reports stated. "Since FY 2004-05, not one quarterly fiscal status report has been submitted to the City on time, complete and accurate."

The FY 2010-11 audit, required to have been filed with the City by January 17, 2012, has not yet been submitted, according to the report. The agency has failed to meet the deadline since 2005 and has also been "inconsistent in raising the minimum 25 percent cash match for its program." 

In addition the financial problems, the report lays out inconsistencies in the center's "program focus, communication, operations (including hours of operation) and staff roles."

The report cites one recent example that took place in January, when de la Torre "gave same-day notice to City staff that the agency was closing for a day and a half staff planning retreat" that did not take place.

"Instead, three full-time employees had taken two youth participants to Arizona to participate in a coordinated protest against the banishment of the Tucson Unified School District’s Mexican American Studies program," the report stated.

"Review of PYFC files and data tracking system found that the PYFC has not tracked/measured participant information effectively and accurately," the report stated. "City staff could not verify information contained in the Mid-Year Program Status Report."

To address these issues, the City will require PYFC to develop a program plan with "clear and measureable outcomes" to target "a relatively small but highly demanding group of individuals (between the ages of 16 and 24) who are at risk for violence and incarceration."

"These would include approximately 50-75 older youth including gang involved youth, youth enrolled at Olympic High School and Off Campus Learning Center, youth who have dropped out of Santa Monica High School, and formerly incarcerated youth, including serious habitual offenders and those on parole or probation," according to the report.

The City will give the center a last chance agreement that "will require the Board’s commitment to accept the assistance of new independent oversight for increased accountability along with a tightened and re-focused program," the report stated.

The agreement, which runs from July 1 through December 31 could be renewed for the second half of the fiscal year if the criteria is met.

"The PYFC Board conducted its first ever Executive Director evaluation this year and a process is now in place to do so regularly," according to the report. "The current Board members appear to take seriously their fiduciary and non-profit stewardship roles."