One month before one of the largest Jewish charities in the country admitted to donors that it had lost $20 million, the agency’s executive vice president got a $92,000 bonus. Not long after, Gail Magaliff, the group’s former CEO, got nearly $43,000 for unused vacation time.
The Forward reports:
One month before one of the largest Jewish charities in the country admitted to donors that it had lost $20 million, the agency’s executive vice president got a $92,000 bonus.
The signs of the impending disaster that would soon send FEGS Health & Human Services spiraling into bankruptcy, and leave tens of thousands of its employees and clients uncertain about their jobs and their care should have been clear by then to the charity’s executives and trustees. In October 2014, when records show that Ira Machowsky got his bonus, FEGS was already in technical default on a $12 million bond issue. An internal review conducted in November of that year found that three-quarters of the group’s 350 programs were losing money.
Machowsky was expected to become FEGS’s CEO, but instead he was ushered out in December. Months after he left, FEGS’s attorney said in court that AllSector, a for-profit FEGS subsidiary that Machowsky championed, had been a massive financial black hole that swallowed a stunning $72 million of FEGS’s dollars between 2008 and 2014, delivered inadequate products and was a leading cause of the organization’s collapse.
Despite the management failures under his watch, Machowsky not only got his bonus, but also was handed another $35,000 in January, after he had already left the organization, to compensate him for unused vacation days. Gail Magaliff, the group’s former CEO, also got nearly $43,000 in January for unused vacation time. Low-level staffers, meanwhile, had to send dozens of letters to the bankruptcy court, demanding their vacation pay before the group coughed up the funds in August.
Six months after FEGS declared bankruptcy, court documents highlight massive ineptitude in the top ranks of a charity that once held itself out as a paragon of progressive not-for-profit management theory. The documents unveil cushy treatment of executives, and portray AllSector as an inexplicable money pit.
The documents also raise concerns that the quality of care at FEGS sites has deteriorated amid the collapse, describing serious staffing problems at facilities serving thousands of clients with developmental disabilities.
As evidence of FEGS’s mismanagement grows, former FEGS trustees and executives continue to refuse to answer questions about the debacle.…
The consequences of FEGS’s mismanagement have been deeply personal for the vulnerable people in its care. In the months after the bankruptcy, staffing levels at FEGS facilities for people with developmental disabilities fell precipitously.…
Read it all here.
[Hat Tip: Sfek-Sfeika.]