Financial viability of Hammond organization questioned

Auditors are questioning the financial stability of a Hammond youth and family services organization after the organization lost out on hundreds of thousands of dollars the past three years because of canceled state contracts.

But the executive director of the New Horizon Youth Service Bureau said the organization is just as viable as ever, even without the money.

The nonprofit youth service group, formed in 1978, provides local resources for youths and families to help prevent juvenile delinquency in Tangipahoa, Livingston, St. Helena, St. Tammany and Washington parishes.

An audit released Monday by the state Legislative Auditor’s Office says the youth services organization took in about $586,000 in revenue in the 2012-13 fiscal year, more than $515,000 of which was from government grants and contracts, while spending about $617,000, mostly on its therapy services.

The audit says the organization has lost about $394,000 in the past three years, mostly attributed to the canceled contracts, and spent at a $31,000 deficit in the 2012-13 fiscal year. The organization also owes about $90,000 in payroll taxes and penalties.

The organization’s administrators told auditors that the group lost a significant amount of money for its Pathways Homebuilders program, which provides home-based therapy sessions, after losing contracts with the state Office of Juvenile Justice.

The executive director of the New Horizon Youth Service Bureau, Elizabeth Sawyer, said organizations like hers used to provide children’s mental health services.

But in 2012 the state hired Magellan Health Services, of Connecticut, to manage those services, meaning the bureau and other organizations lost revenue from those contracts.

Sawyer said her organization still has enough money to pay the bills.

“We are still, however, getting the same referrals we always got, but we’ve lost that much (money) in contracts,” she said.

The audit says administrators already have developed a detailed plan to handle the financial issues, including modifying salaries and benefits, increasing therapists’ caseloads while eliminating time lapses between cases and finding renters for unused buildings on the organization’s property.

Some of those plans already have been implemented and will be reflected in next year’s audit, the audit says.

The bureau did not cut any salaries but did roll back some benefits, including what used to be a “very generous” vacation and sick leave policy, Sawyer said.

The bureau also adjusted its billing hours from a per session flat rate to an hourly fee for interventions, Sawyer said.

Sawyer said the organization recently became accredited through the Commission on Accreditation of Rehabilitation Facilities.

“We’ve made the adjustments,” she said. “We’re not in the hole.”

In a separate issue, the bureau’s board of directors was able to hold an official meeting only once during the fiscal year because of deaths and resignations, the audit says.

Sawyer said two members died last year and three others resigned recently for personal reasons.

The board will now host its meetings through teleconference and cut down the size of the board from eight to five members, making quorums more feasible, the audit says.