As FEGS prepares to close its doors in the wake of a major deficit, several other agencies under the UJA-Federation umbrella will be taking over some of its $250 million network of employment and guidance programs. They include the Jewish Board of Family and Children’s Services, Jewish Community House of Bensonhurst, the Jewish Community Center of Manhattan and the Jewish Child Care Association, with the transfer of contracts taking effect as early as April 1, The Jewish Week has learned.
To date, Jewish social service agencies cited will take over about 7 percent of the 172 FEGS programs assigned by city and state authorities; another 100, or so, are yet to be assigned.
Connect to Care, UJA-Federation of New York’s initiative to help those affected by the recession with such things as employment and career-transition services, will be continued. UJA-Federation expects to issue a request for proposal, according to documents obtained by The Jewish Week. Its Connect to Care-Single Stop program — in which an employment adviser is onsite — will be continued at the Jewish Community House of Bensonhurst.
The City of Long Beach will be taking over FEGS’ Superstorm Sandy work in the city. Long Beach had funded the contract with a projected takeover date of March 1.
April 1 is the projected date for the transfer of most of the nearly 200 programs that have found a new home. The transfer of about 100 others has yet to be finalized, including state supported housing in Suffolk and Queens and early intervention services funded by United Way of Long Island.
FEGS (Federation Employment and Guidance Service) announced in January that it plans to close after 80 years, citing a $19.4 million budget deficit in 2014. The $250 million agency served 135,000 New Yorkers annually — among them about 20,000 Jews — in such areas as health/disabilities, home care, job training and immigrant services.
An eight-member UJA-Federation task force led by two of its former presidents was assembled to monitor the dissolution of FEGS, the Jewish community’s major social services agency, to ensure that many of its programs are transferred by the city and state to UJA-Federation’s network of 97 other agencies.
“We want to make sure that where FEGS programs align with our mission that we are able to transfer them to … the most appropriate relevant agencies in our network,” said Elana Broitman, UJA-Federation’s senior vice president for agency relations. “I don’t want to leave the impression that all [FEGS’ clients] will be serviced by UJA-Federation, but we are worried about all of them, of course.”
Eric Goldstein, UJA-Federation’s CEO, announced creation of the task force in an email to donors last Friday. In it, he disclosed also that in light of the financial collapse of FEGS, his organization has “brought in healthcare industry experts to closely examine specific issues that could affect other human-service agencies, such as the financial and operational impact of changes in how health care is funded.”
“We are exploring more intensive ways to train trustees regarding governance and accountability, and agency executives on business management and governance,” he added.
The two former presidents spearheading the task force established last Dec. 18 are John Shapiro and Jerry Levin. The other six members are described as “veteran lay leaders.”
Levin told The Jewish Week that until now the task force has “focused 100 percent in making sure clients receive continuity of service. … I’m sure a lot of lessons are to be learned [from FEGS’ dissolution], but we are not focused on that now. We are focused on the immediate problem. I’m sure we will later go back and take steps to try to make sure it does not happen again — but a lot of it is not in our control.”
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A FEGS spokeswoman said in an email that the organization was forced to close after a financial analysis that included input from outside financial and restructuring experts found it was no longer financially viable.
“The $19.4 million deficit FEGS reported in fiscal year 2014 was a result of multiple factors, including poor financial performance on certain contracts, contracts that did not cover their full costs, investments in unsuccessful mission-related ventures, write-offs of accrued program revenue, and costs resulting from excess real estate,” the spokeswoman wrote. “A forensic assessment has not uncovered any fraud or malfeasance to date.”
But both the offices of both the state attorney general and the Manhattan district attorney are reportedly conducting their own investigations.
Broitman noted that the $5.1 million in core operating and targeted grants UJA-Federation awarded FEGS for the current fiscal year represented 2 percent of FEGS’ overall budget.
“We are the largest single philanthropic funder and the 2 percent we provide is critical to FEGS’ leveraging these government dollars and complementing the government dollars with targeted programs,” she said.
Deputy New York City Mayor Lilliam Barrios-Paoli was quoted last week as saying that most of the city’s contracts with FEGS have already been transferred to other nonprofits.
“Life will go on and services will continue,” she said. “The state has to figure out what happens with the … mental health practice and clinics that they have. That’s well on its way as well. It is tragic that it happened to FEGS, but services will not be affected.”
FEGS has many state contracts, and spokespersons for different state agencies said negotiations to transfer FEGS’ contracts and licenses were still ongoing.
“The state is committed to ensuring the continuity of care for all individuals served by FEGS as FEGS works through its current financial difficulties,” the spokespersons said in a joint statement. “We are working to resolve this situation in the best interest of the individuals receiving critical services and the people who support them.”
A FEGS spokeswoman said, “Where appropriate, certain equipment will transfer to the new providers taking over our programs.”
She declined to comment when asked about the millions of dollars worth of buildings and land FEGS owns. But she said no decisions have made about filing for bankruptcy or dissolution.
“Our full attention remains on our clients and I can’t speculate about corporate decisions and actions to be taken in the future,” she said.
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Among the other nonprofits picking up FEGS’ state and city contracts are: Henry Street Settlement, Good Shepherd Services, United Cerebral Palsy, Association for the Help of Retarded Children, Catholic Charities Community Service, Goodwill and Presbyterian Social Services.
Officials at FEGS have said they hope that the nonprofits to which their contracts are transferred also hire FEGS employees. There are about 2,200 employees, 1,400 of whom are members of District Council 1707 of the American Federation of State, County and Municipal Employees District Council, according to Larry Cary, an attorney for the union.
“Representatives of the city and the state have said they have no authority to require the receiving programs to hire FEGS employees,” he said, adding that the union plans to contact each nonprofit to which a program is transferred.
Neal Schweifel, assistant executive director of operations at Life’s Worc, a Garden City, L.I., organization that provides residential support and community services to the developmentally disabled, said he has already hired a half-dozen FEGS employees. And he said he would be increasing his staff of 900 as Life’s Worc adds additional homes.
Schweifel added that the transfer of FEGS programs was very fast, with the state issuing a request for proposal and giving potential providers just a week to respond.
