Thursday, June 29, 2017
[Alameda County] Oakland nonprofit’s failures went unnoticed by county funders
When a report by the Alameda County civil grand jury was released last month, the revelation that the Oakland City Council disregarded open-government laws was the bombshell.
But that’s not all the report revealed.
It also found that Alameda County provided a $1 million bailout to a financially troubled East Oakland nonprofit. The grand jury found that the county Board of Supervisors gave preferential treatment to the nonprofit, Youth Uprising, over other community-based organizations.
Youth Uprising runs education, employment and wellness programs for at-risk children, and among its board members is county supervisor Nate Miley.
You’d think that would put the county in a pretty good position to know what was going on at the nonprofit, but the report says the county was clueless.
And it shouldn’t have been.
Testimony from witnesses, including county and Youth Uprising employees and an independent auditor helped the grand jury conclude that the county didn’t provide sufficient oversight to properly protect our tax dollars.
If the county, which provides nearly half of Youth Uprising’s revenue, was paying attention, a financial collapse should’ve been detected before it became imminent. Before it required a bailout.
The grand jury didn’t find evidence that Youth Uprising’s shortfalls affected the children it serves. Still, its findings serve as a warning of what happens when organizations funded with public money go unchecked.
It’s a reminder that it’s almost impossible to help the people who need it most when organizations designed to facilitate that help can’t manage themselves.
In the end, we all lose.
Among Youth Uprising’s board members is county supervisor Nate Miley.
Youth Uprising got stuck in the mud three years ago when it attempted to root itself in the education system that has served scores of students in the neighborhood around Castlemont High School, the community the organization primarily serves.
In August 2015, Youth Uprising opened two charter schools — Castlemont Primary and Castlemont Junior Academy. The schools were approved by Oakland Unified School District, which also approved a lease to rent classrooms at Castlemont High School for about $88,000 a year.
The schools were to operate under a separate nonprofit, Castlemont Community Transformation Schools, that emerged from a program started by Youth Uprising.
Instead, Youth Uprising’s financial well-being became entangled in the shaky health of Castlemont Community Transformation Schools. An investigation by the Alameda County civil grand jury found that in the 2014-2015 fiscal year more than $600,000 of Youth Uprising’s funding was used for school expenses.
Both schools didn’t enroll enough students.
Both schools ran out of money and closed within 18 months of opening.
Wait, there’s more.
As Youth Uprising was developing the plan for the charter schools, it received $2.5 million from the San Francisco Foundation for Castlemont Renaissance to develop an affordable housing project in the Castlemont community. But Castlemont Renaissance didn’t have its own bank account, so Youth Uprising acted as a fiscal agent and put the money into its account. For transparency reasons, the accounting should’ve been kept separate.
That raised eyebrows, just not at the county level.
Youth Uprising’s board members raised concerns about its relationship with Castlemont Renaissance, and there were disagreements on transparency from the leadership. The internal turmoil led to board and staff turnover.
Throughout the troubles, Olis Simmons, Youth Uprising’s CEO, remained in control. She also caught the attention of the grand jury, which found “irregularities” in her compensation. According to its report, Simmons stepped away from managing Youth Uprising for significant periods of time in the 2015-16 fiscal year, yet she billed the county for her usual pay of nearly $100,000 for that period.
The report noted that Youth Uprising also collected funds from the San Francisco Foundation for her salary. In total, her pay was more than $200,000 — far higher than the average pay of most heads of Oakland community organizations, the report found.
Still, in May 2016, all five supervisors approved the bailout without an adequate review of the organization they were saving.
And get this: In exchange for the bailout, Youth Uprising was required to provide an outline of how the money was going to be spent before a check was written. Nothing was filed, and the grand jury found “no evidence that the county has followed up on its $1 million bailout to ensure that corrective action has been taken at Youth Uprising.”
It was as good as a blank check, because, just three days after the money was delivered, the grand jury found a transfer of $820,614 from Youth Uprising’s account to a separate account for the affordable housing project.
After all of this, Miley made it clear that Youth Uprising retained his support.
“I think the work Youth Uprising has done is vitally important. I don’t think anything was done wrong,” he told me.
If anything, Miley thinks Simmons got overextended with the schools and housing project, endeavors that were supported by the Youth Uprising board.
“The dream was a big dream in terms of community transformation, but I just think she wasn’t able to achieve the dream,” Miley said.
I’m not as generous as Miley. To me, Youth Uprising lost focus of its core mission: helping children who have to crawl from the bottom with at least one arm tied behind their backs through programming that prepares them for a chance to succeed.
June 28, 2017
San Francisco Chronicle
By Otis R. Taylor Jr.