A.G. Schneiderman & Comptroller Dinapoli Announce Agreement With Met Council To Restore Charity's Operations
Agreement Includes Revision Of Met Council’s Governance Procedures, Oversight And Financial Operations, Repayment Of Stolen Funds To State And City Of New York
Schneiderman & DiNapoli: Working With Met Council To Protect Public Funds And Ensure They Are Used For Intended Purposes Means Vital Community Services Can Resume
NEW YORK – Attorney General Eric T. Schneiderman and Comptroller Thomas DiNapoli today announced an agreement with the Metropolitan Council on Jewish Poverty (“Met Council”) that will allow Met Council to resume receiving public funds, facilitate reform of its governance processes and help ensure that public funds are used for their intended purpose. The investigation, conducted by the Attorney General’s Charities Bureau, followed the September 2013 filing of a felony complaint against former Met Council CEO William Rapfogel and a co-conspirator alleging theft of charitable funds. As a result of this agreement, critical community services have traditionally have been provided by Met Council with public funds can resume, while ensuring public confidence in the distribution of those funds.
“The fact that former Met Council employees and conspirators were able to carry out a large-scale fraud over an extended period of time raised serious questions about the misuse of public funds,” said Attorney General Schneiderman. “The agreement we are announcing today will provide assurance that Met Council is implementing critical reforms to prevent the misuse of public funds, allowing the vital community services traditionally provided by Met Council to resume. This agreement allows the charity to continue its important mission of serving the poor and needy in a responsible fashion.”
"This agreement is an important first step in moving forward. Met Council provides critical services to needy New Yorkers, but there must be accountability for public money and ramifications when wrongdoing happens," State Comptroller DiNapoli said. "Our office will carefully scrutinize state contracts and payments with Met Council to ensure that taxpayers get what they pay for, as well as continue to work with Attorney General Schneiderman on this ongoing investigation."
Pursuant to today's agreement with the Attorney General’s office, Met Council has agreed to implement key reforms to enhance and strengthen its governance, oversight and financial and operational controls, thereby preventing future misconduct. These reforms include:
- implementing enhanced governance and personnel policies that meet or exceed best practices for an organization of Met Council’s size and scope, including prohibitions on political activities and contributions; a code of ethics; and whistleblower, conflict-of-interest and anti-nepotism policies;
- hiring a general counsel and a chief compliance officer;
- establishing several standing committees of the Board of Directors, including a Governance Committee, a Compensation Committee, and separate Audit and Finance committees;
- engaging a new outside auditor;
- revamping its processes for reviewing internal controls and financial activities such as employee compensation and benefits (including credit card use) and vendor selection and payment;
- conducting thorough evaluations of its financial condition, financial management and cost structure to render short-term and long-term prognoses and, where deficiencies appear, to develop a remedial plan of action;
- appointing at least two new independent directors to the board, who will be approved by the state Comptroller as well as two City agencies;
- providing annual training for board members and key personnel in ethics and nonprofit compliance, as well as financial management and fiscal controls;
- submitting to monitoring of its compliance with all legal and ethical obligations by an outside inspector selected by the Agencies.
The agreement also notes that Met Council's Board of Directors has also taken important steps to address the misconduct and help restore the charity’s ability to carry out its important mission responsibly. Among these steps are conducting its own investigation with the assistance of outside counsel and forensic auditors; promptly reporting its findings to the Attorney General’s Office, and replacing certain senior management, including Rapfogel.
This State agreement coincides with two parallel agreements that Met Council has reached with the City of New York. The first is with the New York City Mayor’s Office of Contract Services (MOCS) to establish a Corrective Action Plan; the second is with the New York City Department of Investigation (DOI) to establish a Monitoring Agreement. The Office of the Attorney General thanks both MOCS and DOI for their collaborative efforts to make these possible.
Met Council’s adherence to these agreements will enable the organization to continue its important work serving the poor and needy across New York City.
A copy of today’s agreement can be read here.