Yonkers Mayor Mike Spano’s administration has taken over activities at the Nepperhan Community Center (NCC) building in the wake of a report by the city’s Inspector General (IG) on the nonprofit NCC that found fiscal mismanagement, unpaid utility bills, missing or incomplete financial records, paychecks for employees that bounced and a debt owed to the city of more than $204,000. Spano announced the takeover on April 18. The nonprofit had been operating in the city-owned building at 342 Warburton Ave. Spano said there will be a restructuring and the city will now control the programming that takes place there.
The report by Yonkers IG Liam J. McLaughlin said that the Barack Obama Foundation had raised questions about whether grant money it had given to NCC was properly used and that the Internal Revenue Service had revoked NCC’s tax-exempt status for failing to file required Form 990 reports for 2020, 2021 and 2022. The report said that the people in charge of the NCC had filed paperwork to form a new tax exempt entity called the Nepperhan Cultural Center.
McLaughlin’s report said that bank records showed that NCC had received $650,000 from the Obama Foundation over a two-year period ending in December 2020. A Sept. 13, 2022, letter from the foundation to Dr. Jim Bostic, who was NCC’s executive director at the time, discussed an investigation the foundation had completed and advised that NCC would no longer be eligible for funding from the foundation.
“The Nepperhan Community Center is and will remain an important resource to our city,” Spano said. “My commitment is to keep it operating for the tradition it provides and for the benefit of the people in our community. Unfortunately, if the city does not step in, the Nepperhan Community Center is unlikely to qualify for future federal, state, or local grant funds that are the lifeblood of its ability to stay open.”
Spano said the city’s Parks Department, Office of Aging, and other city agencies will step in to keep programs running at the Nepperhan Community Center, while what was described as “a true organization with a reputable nonprofit board” can be formed.
“This is a city-owned building that we are glad to continue to make available virtually free of charge for programs that serve the community,” Spano said. “In return, the operators must be transparent, provide accountability for the public dollars and private grants they receive, and above all comply with the tax laws and basic accounting rules.”
“Our review revealed pervasive mismanagement by the NCC,” the IG’s report said. “Among the multitude of issues, the NCC failed to maintain accounting and other records, failed to segregate grant funds to properly account for said funds and failed to maintain proper payroll balances to pay employees. NCC management does not maintain policies and procedures consistent with an organization that has received upwards of $3.8 Million Dollars annually of grant funds and other revenues.”
In its conclusion, the IG’s report said in part, “The NCC has served a vital role for the people of Southwest Yonkers since it was founded in 1942. However, the ongoing mismanagement of the organization is not something that can be overlooked. This investigation has determined that NCC has no system of internal controls, comingles grant funds, has failed to file tax returns for the last 3 years, had its not-for-profit status with the federal government revoked, owes the City of Yonkers over $200,000 in back rent, is attempting to create a new corporate entity in an apparent effort to avoid tax filing requirements in prior years, has defaulted in its lease agreement with the City of Yonkers, has failed to pay employees and has had the Obama Foundation cut all ties with NCC. Any one of these issues would threaten the viability of the NCC, however cumulatively these issues appear to be insurmountable with the current board and management composition of NCC.”
