NYC Probe Eyes Nonprofit Exec Bonuses, But Issues Run Much Deeper

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Rich-NYC

 February 23, 2016; DNAinfo

In November of last year, NPQ covered a story about the rescinding of the Northern Manhattan Perinatal Partnership’s (NMPP) $4.2 million contract with the New York Department of Health. Now, New York City’s Department of Investigations has launched a probe into NMPP after news reports surfaced showing nonprofit executives gave themselves $200,000 in numerous bonuses even as they were not delivering on the contract. The bonuses nearly doubled their salaries. The agency’s board is not allowed to award the bonuses under the contract.

Among those receiving bonuses were the executive director ($71,300), the chief financial officer ($87,000) and the human resources administrator ($23,900). The secretary to the executive director, who was also the niece of the HR administrator, received $20,000 in bonuses last year, according to records. It’s reported that the bonus money may have been paid for at least the last seven years, making the totals potentially much larger.

Sydney Moshette Jr., who serves as the NMPP’s vice chairman and whose signature appears on the organization’s IRS form 990, said he was unaware that any bonuses were paid to executive staff.

“‘Bonus’ is your word,” he told the reporter, saying he believed any additional salary payouts were for “administrative costs.”

Yet notations on the checks included “bonus approved board” and accounting entries showed “Reason for Request: Salaries bonuses approved by board.” Many of the amounts were paid in installments from a variety of different fund accounts, including one labeled “infant mortality reduction initiative.”

As Larry Kaplan wrote earlier, the bonuses were among a number of serious management problems. Earlier contractors working with the executive director tried to voice their concerns but were ignored. They then wrote a letter to the Health Department, which issued a warning to the director. Within a month, new allegations surfaced that the director had threatened a staffer with reprisal if she tried to undermine him. “I always win,” he said, and laughed, according to reports.

Matters became more complicated by revelations that the social services agency had hired a career criminal who preyed on their clients. Several clients had complained, but nonprofit officials seemed more focused on keeping things quiet. One client said the executive director told her not to talk with anyone else. She reports, “He said, ‘We don’t want to make a big deal out of it.’”

At its peak, NMPP was a nearly-$10 million-a-year nonprofit with about 120 employees and four locations. Its work focused on helping troubled young women and mothers. Cumulatively, the nonprofit has received more than $50 million in public agency funding over the last 15 years. Revenue, according to its 2013 IRS form 990, was about 86 percent public agency funding and 14 percent “other” contributions; it reported zero fundraising costs. Recently fired executive director Mario Drummonds ran it for 16 years and was credited with much of its expansion.

So much for the wonders of growth.—Kevin Johnson