City to tighten oversight
The city is planning new financial oversight measures for 20 Main Street programs in Boston in the wake of allegations that about $20,000 in city funding for Hyde/Jackson Square Main Street( HJSMS) has gone missing.
“We are taking this very seriously,” said Evelyn Friedman, director of the city Department of Neighborhood Development (DND). DND oversees the city’s relationships with the local Main Streets organizations, which are technically independent nonprofits.
It is the first instance of alleged financial impropriety since the Boston Main Streets program was founded in 1995, said Friedman, who is a JP resident.
An investigation by the HJSMS board into what happened to the money is focused on current Executive Director Carlos Schillaci’s time at HJSMS, the board’s lawyer, Marc LaCasse, told the Gazette.
”My job is to help [the board] figure out what they have on their hands, and what steps should be taken,” including possible civil or criminal charges, LaCasse said.
Speaking to the Gazette, Schillaci previously denied any wrongdoing and said he did not know anything about the investigation. He said he resigned as executive director July 1, but that he gave the board one-month notice. He told that Gazette he was injured at work July 14 and has been on medical leave ever since.
LaCasse said Schillaci was officially suspended July 14.
Schillaci said last week that he still has not been contacted by the board or anyone else about the investigation and that he does not have a lawyer. He said he plans to move out of state because his partner is starting a new job, but would not say when he is leaving or where he is going.
The Gazette first reported the board’s investigation into HJSMS’s books after the board contacted Boston Police about financial “discrepancies” July 12.
That investigation is still ongoing, but Friedman and others told the Gazette that it appears that funds given to HJSMS by the city that should have been handed over to the Jamaica Plain Neighborhood Development Corporation (JPNDC) were not making it there.
The city covers Main Streets directors’ $30,000-a-year salary, Friedman said, and a city-managed private foundation provides each of the 20 groups with about $25,000 for operating costs each year.
But, because it is inefficient for HJSMS as a small nonprofit with one staff member to handle its own payroll, the JPNDC, a much larger local nonprofit, actually cuts Schillaci’s paycheck, JPNDC Executive Director Richard Thal told the Gazette.
“We have been helping HJSMS out, pretty much since its inception, by processing its payroll,” Thal said.
HJSMS is responsible for reimbursing the JPNDC for that service with funds provided by the city.
“With any small organization, especially one that gets a fair amount of its money from the public sector, it is common for there to be a backlog of four to eight weeks,” Thal said, “But it had never gotten this high.” Thal said the JPNDC has not been reimbursed in months.
The issues are serious enough to inspire DND to “review all of our practices” regarding Main Streets funding, Friedman said. DND regularly reviews Main Streets’ tax forms and balance sheets, but has not previously looked systematically at their payments and receipts, she said.
“We would have picked this up if we asked for an analysis of their payables,” she said.
The city is also considering imposing restrictions on how Main Streets organizations can make payments, she said.
Prior to Schillaci’s tenure as executive director, Friedman said, HJSMS board rules required two signatures for every check over $50. When Schillaci was hired, that rule was scrapped and he was given a debit card, she said.
“That is another thing we could insist on,” she said. “I don’t know if it would be $50.”
Friedman said the city could enforce new rules for local Main Streets organizations, even though they are independent nonprofits, through contracts the city has with each of the organizations.
HJSMS’s relationship with the JPNDC is rare among city’s 20 Main Streets organizations, Friedman said.
HJSMS is one of three neighborhood Main Street organizations in JP, along with JP Centre/South Main Streets and Egleston Square Main Street (ESMS).
Richard Downey, president of the board of JP Centre/South Main Streets told the Gazette that that group handles its payroll accounting in-house. Centre/South would welcome increased oversight from DND “headquarters,” Downey said. “They are the experts. Especially with a volunteer board, it is nice to have [DND’s] support,” he said.
In an email statement, the ESMS board said, “Egleston Square Main Street’s board of directors welcomes greater city involvement in our programs here in Egleston Square. We look forward to continuing to work with the Menino administration as we build our community, strengthen our business district and revitalize our public spaces.”
The city is also stepping up to keep HJSMS running as the volunteer board conducts its investigation and looks for a new director, Friedman said. “Our staff is working with the board to assist with any projects that were started,” she said.