CHILDREN YOUTH INVESTMENT TRUST CORPORATION PERFORMANCE OVERSIGHT HEARING

APRIL 18, 02013

OPENING STATEMENT GOOD MORNING. I AM COUNCILMEMBER JIM GRAHAM, CHAIRPERSON OF THE COMMITTEE ON HUMAN SERVICES. THE TIME IS _______________, ON THURSDAY, APRIL 18, 2013 WE ARE IN ROOM 123 OF THE HISTORIC JOHN A. WILSON BUILDING AT 1350 PENNSYLVANIA AVENUE, NW, FOR THE BUDGET OVERSIGHT HEARING OF THE CHILDREN AND YOUTH INVESTMENT TRUST CORPORATION. WE WILL FIRST HEAR FROM PUBLIC WITNESSES AND THEN EXECUTIVE DIRECTOR ED DAVIES. I WANT TO WELCOME ED DAVIES, EXECUTIVE DIRECTOR OF THE TRUST, BACK TO THE COUNCIL. HE AND HIS STAFF CONTINUE TO WORK HARD AT BOTH CHANGING THE CULTURE FOR YOUNG PEOPLE, BUT ALSO THE CULTURE AT THE TRUST.

THE MAYOR HAS PROPOSED TO KEEP THE DC CONTRIBUTION TO THE TRUST AT $3 MILLION IN FY 2014. THESE FUNDS ARE DEDICATED TO PROMOTE A CULTURE OF POSITIVE YOUTH DEVELOPMENT THROUGHOUT THE DISTRICT OF COLUMBIA BY SUPPORTING COMMUNITY BASED PROGRAMS AND INITIATIVES THAT SUPPORT CHILDREN, YOUTH, AND FAMILIES. EVERYDAY WE SEE EVIDENCE OF THE GREAT CONTRIBUTIONS YOUNG PEOPLE CAN MAKE TO OUR CITY AND NATION. PROGRAMS FUNDED BY THE TRUST HELP CHILDREN AND YOUNG PEOPLE DREAM BIG FOR THEMSELVES - - AND OUR COLLECTIVE FUTURES. THE TRUSTS FUNDING IS DEDICATED IN FOUR AREAS: OUT OF SCHOOL TIME / YOUTH DEVELOPMENT PROGRAMS. PROGRAMS FOR OLDER YOUTH 14 24 YEARS OLD. PARENT CENTER PROGRAMS. SUMMER PROGRAMS. IN ADDITION TO THE FOUR PROGRAMS AREAS WHERE THE TRUSTS ROLE IS LARGELY A GRANT MAKER AND HAS A
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GRANTS MANAGEMENT ROLE, MR. DAVIES TESTIFIED AT THE MARCH PERFORMANCE OVERSIGHT HEARING THE TRUST IS ASPRIRING TO STRENGTHEN ITS ROLE IN OTHER AREAS AS WELL: AS CONVENOR / COLLABORATOR; CAPACITY BUILDER; AND ULTIMATELY AS A SYSTEMS BUILDER. THESE ARE IMPORTANT ROLES - - AND I BELIEVE EXACTLY THE ROLE THE COUNCIL ENVISIONED IN 1999 WHEN IT ESTABLISHED THE TRUST. AS WE ALL KNOW, AND I HAVE COMMENTED ON THIS NUMEROUS TIMES SINCE BECOMING CHAIR OF THIS COMMITTEE, THE TRUST IS A UNIQUE ENTITY IN THE DISTRICT OF COLUMBIA. IT HELD GREAT PROMISE WHEN IT WAS ESTABLISHED IN THE 1999 BUDGET SUPPORT ACT TO PROVIDE OUT-OF-SCHOOL PROGRAMS FOR DISTRICT YOUTH. $15 MILLION WAS APPROPRIATED IN FY2000. THE ACT PROVIDED THAT THE MONEY WAS AVAILABLE ONLY IF THE COUNCIL APPROVED A RESOLUTION SUBMITTING BY-LAWS THAT A NON-SERVICE PROVIDER, NON-PROFIT ORGANIZATION CONTAINS BOARD OF DIRECTORS COMPOSED ENTIRELY OF VOTING MEMBERS APPOINTED BY THE MAYOR AND COUNCIL.

THE TRUST AND ITS GRANTEES WERE ALSO MANDATED BY LAW TO PROVIDE ANY INFORMATION RELATING TO THE GRANT REQUIRED BY THE MAYOR OR A MEMBER OF THE COUNCIL. IT WAS CLEAR FROM THE BEGINNING - - AND TODAY AS WE SIT HERE - - THAT WHATEVER ITS CHARITABLE 501(C) (3) STATUS, THE TRUST WOULD NOT BE INDEPENDENT AND WOULD INSTEAD BE GOVERNED BY AND ACCOUNTABLE TO DC GOVERNMENT. AFTER A LENGTHY INVESTIGATION BY THIS COMMITTEE LAST YEAR OF THE TRUSTS ROLE IN THE FORMER COUNCILMEMBER THOMAS FRAUD CASE, WE CONCLUDED - AND THE COUNCIL AGREED - - THAT THE TRUSTS GOVERNANCE STRUCTURE NEEDED A SECOND LOOK. ADVOCATES, YOUTH SERVING ORGANIZATIONS, AND PHILANTHROPISTS HAVE BEEN TELLING US FOR YEARS THE TRUST NEEDS MORE INDEPENDENCE FROM THE DISRICT GOVERNMENT. LAST YEAR THE COUNCIL PASSED BSA LANGUAGE REQUIRING THE MAYOR AND THE COUNCIL CHAIRMAN TO APPOINT AN ENTIRELY PRIVATE SECTOR TASK

FORCE TO REVIEW THE CURRENT GOVERNANCE STRUCTURE AND MAKE RECOMMENDATIONS FOR CHANGE. ROBERT BOBB, PRESIDENT OF THE BOARD OF TRUSTS BOARD OF DIRECTORS, TESTIFIED AT THE PERFORMANCE OVERSIGHT HEARING, HE AGREED THAT A TASK FORCE TO REVIEW THE INDEPENDENCE OF THE TRUST IS NEEDED. EARLIER THIS SPRING, CHAIRMAN MENDELSON RENOMINATED ONE BOARD MEMBER, AND NOMINATED ONE NEW BOARD MEMBER AND AN EX-OFICIO BOARD MEMBER TO REPRESENT THE COUNCIL. THE CHAIRMAN HAS YET TO CONVENE A COMMITTEE OF THE WHOLE MEETING ON THOSE NOMINATIONS. I VERY MUCH WANT AND HOPE THE TRUST CAN SUCCEED. AND I WILL CONTINUE TO DO WHAT I CAN TO SUPPORT THE TRUST BECAUSE I SEE THE POTENTIAL FORVERY GOOD, NECESSARY WORK, THAT CAN HAVE A LASTING IMPACT ON THOUSANDS OF LIVES. HOWEVER, THERE IS A STRUCTURAL ISSUE THAT MUST BE ADDRESSED - - AND WITHOUT ADDRESSING THE ISSUE - - I FEAR THE TRUSTS POTENTIAL WILL NEVER BE REALIZED.

THE TRUST IS NOW ALMOST 15 YEARS OLD. WELL OVER $100 MILLION OF DISTRICT OF COLUMBIA FUNDS HAS PASSED THROUGH THE TRUSTS DURING THOSE 15 YEARS - - AND YET - AS THE FY 2010 AUDIT POIGNANTLY POINTS OUT - - IN 2010 81% OF THE $17 MILLION TRUST BUDGET CAME FROM ONE SOURCE - THE DISTRICT GOVERNMENT. IN 2013 - - THAT PERCENTAGE WAS OVER 90%. THE AUDIT STATES, A SIGNIFICANT DECLINE IN FUNDING COULD ADVERSELY IMPACT THE FUTURE OF THE TRUST. THE TRUST IS DEPENDENT UPON THE DISTRICT OF GOVERNMENT IN A WAY THAT I AM CONFIDENT - - IT WOULD ADVISE ALL OF ITS GRANTEES NEVER TO BECOME DEPENDENT ON ONE SOURCE FOR ITS ENTIRE FUNDING. IN FACT, THE TRUST MAY EVEN DISCOURAGE SUCH DEPENDENCE. I WANT TO SAY THAT AGAIN - - THE TRUST IS - - AND HAS BEEN - - DEPENDENT - - AND I WOULD SUBMIT AN UNHEALTHY DEPENDENCE - - ON THE DISTRICT OF COLUMBIA MAYOR, DISTRICT AGENCIES, AND THE COUNCIL - - FOR TOO LONG. IF THE TRUST IS GOING TO BE A TRUE CONVENOR, COLLABORATOR, AND CAPACITY BUILDER FOR COMMUNITY

BASED ORGANIZATIONS, IT IS TIME THE TRUST TAKES SERIOUS STEPS TOWARDS INDEPENDENCE FROM THIS GOVERNMENT. IT IS TIME IT PRACTICES WHAT IT PREACHES. I AM BECOMING MORE AND MORE CONVINCED - - AS LONG AS THE DISTRICT CONTINUES TO USE THE TRUST AS A PASS THROUGH FOR INDIVIDUAL DISTRICT AGENCIES - - THE TRUST WILL BE BOGGED DOWN WITH MANAGING GRANTS AND NOT BUILDING THE SYSTEM THAT MR. DAVIES - - AND SO MANY ADVOCATES WANT TO BUILD. IDEALLY, AFTER 15 YEARS, A MUCH MORE COHERENT, ROBUST, AND EFFECTIVE POSITIVE YOUTH DEVELOPMENT SYSTEM OF SERVICES AND SUPPORT PROGRAMS, SHOULD BE IN PLACE. WE ARE NOT THERE YET. AND PART OF THAT RESPONSIBILITY LIES WITH THIS GOVERNMENT - - AND PART OF IT LIES WITH THE TRUSTS DEPENDENCE ON THIS GOVERNMENT. BUT AS LONG AS THE LAW REQUIRES - - AND AS LONG AS MILLIONS OF DOLLARS IN REPROGRAMMINGS - - SOME APPROVED BY THE COUNCIL - - AND OTHERS NOT - - THIS COMMITTEE WILL CONTINUE TO HOLD HEARINGS AND HOLD

THE TRUST ACCOUNTABLE FOR DISTRICT FUNDS THAT PASS THROUGH THE TRUST. THIS IS THE TRUSTS FY 14 BUDGET OVERSIGHT HEARING. IN ADDITION TO THE $3 MILLION THAT MAYOR HAS PROPOSED TO SEND TO THE TRUST IN FY 14 FOR THE FOUR PROGRAM AREAS MENTIONED EARLIER, THE TRUST WILL ALSO MANAGE MILLIONS OF DOLLARS OF GRANTS FOR DISTRICT AGENCIES. THEY WILL ALSO MANAGE THE FEDERAL GOVERNMENTS $19 MILLION OPPORTUNITY SCHOLARSHIP PROGRAM. THE PURPOSE OF THE HEARING IS TO PROVIDE THE PUBLIC AN OPPORTUNITY TO EXPRESS ITS CONCERNS AND SHARE ITS RECOMMENDATIONS / PRIORITIES FOR THAT FUNDING. WE ARE ALSO HERE TO LEARN HOW THE TRUST WILL INCORPORATE THOSE CONCERNS AND RECOMMENDATIONS IN DEVELOPING ITS PLANS TO SPEND THAT $3 MILLION. THE COMMITTEE HAS THREE RESPONSIBILITIES: 1. MAKE SURE THE PROGRAMS THAT THE TRUST PROGRAMS REFLECT THE INTERESTS AND NEEDS OF CHILDREN, YOUTH, AND FAMILIES.

2. THAT THERE ARE PROGRAM EVALUATIONS IN PLACE TO ENSURE THE BEST RESULTS AND FINANCIAL MONITORING SYSTEMS IN PLACE TO MAKE SURE FUNDS ARE USED APPROPRIATELY. 3. AND FINALLY, TO CHALLENGE THE TRUST TO HOLD ITSELF ACCOUNTABLE TO THE SAME LEVEL OF PERFORMANCE - - PROGRAMMATICALLY AND FINANCIALLY - - AS IT EXPECTS OF ITS GRANTEES. I WILL FOCUS ON SEVERAL AREAS DURING THE COURSE OF THIS HEARING: 1. THE DEPARTMENT OF YOUTH REHABILITATION SERVICES AND THE TRUST HAVE BEEN WORKING CLOSELY SINCE THE FALL OF 2008 ON STRUCTURING THE LEAD ENTITY / DC YOUTHLINK SERVICE COALITION. BY THE END OF FY 14 OVER $30 MILLION WILL HAVE BEEN INVESTED IN DEVELOPING THIS SYSTEM FOR YOUNG PEOPLE IN THE JUVENILE JUSTICE SYSTEM. THERE IS CLEARLY PROGRESS BEING MADE IN ALL ASPECTS OF DC YOUTHLINK. WE HEARD AND SAW EVIDENCE OF THOSE IMPROVEMENTS ON

MONDAY IN THE TESTIMONY OF 8 YOUNG MEN AND A MOTHER OF A DYRS YOUTH. BUT WE NEED MORE SYSTEM BUILDING. WE NEED TO A GREATER SENSE THAT THE $30 MILLION IS MAKING A LASTING DIFFERENCE IN THE LIVES OF DYRS YOUTH - - AND THE PROGRAMS AND COMMUNITIES SUPPORTING DYRS YOUTH. 2. IN FY 13THE TRUST WILL MANAGE OVER $9 MILLION FOR DYRS IN DC YOUTHLINK FUNDS ALONE. $4 MILLION CAME TO THE TRUST FOUR DAYS PRIOR TO THE END OF FY 12. THE TRUST DIDNT RECEIVE A FINAL SPENDING PLAN FOR THE $4MILLION UNTIL JANUARY 2013. THIS IS A PROBLEM. DYRS HAS PLACED A FINANCIAL RESPONSIBILITY ON THE TRUST WITHOUT A CLEAR PLAN IN PLACE FOR DISPENSING THOSE FUNDS. WE WILL DISCUSS THE $4 MILLION TRANSFER IN MORE DETAIL. 3. THE FY 2010 AUDIT REVEALED OVER $1.3 MILLION IN UNSPENT DISTRICT FUNDS LEFT OVER IN THE TRUST BUDGET. THE SAME WILL BE TRUE IN FY 13 DUE TO

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TRANSFERS LIKE THE $4 MILLION I JUST MENTIONED. SEVERAL LARGE GRANTS WILL BLEED INTO FY14 DUE TO DYRS LAST MINUTE TRANSFER OF FUNDS WITH NO CLEAR DIRECTION ON HOW TO SPEND. THIS HAS SEVERAL CONSEQUENCES: a. IT THROWS OFF THE TRUSTS ACCOUNTING. ACCORDING TO THE FY 2010 AUDIT, $6.9 MILLION - OR 1/3 OF THE TRUSTS BUDGET HAD TO BE READJUSTED IN ORDER FOR IT TO BE BALANCED AT THE END OF THE YEAR. THE AUDIT SUGGESTS THAT THE TRUST - - IN FY 10 - - DID NOT QUALIFY AS A LOW RISK AUDITEE. b. ADDITIONAL FUNDING REQUIRES ADDITIONAL TIME TO RESEARCH AND WRITE GOOD RFPS. c. GIVEN THE SMALL GEOGRAPHICAL AND RELATIVELY SMALL # OF SERVICE PROVIDERS, THE SAME ORGANIZATIONS TEND TO REPLY TO ALL OF THE RFPS. d. AND FOURTH, SHOULDNT THERE BE MORE THOUGHT, PURPOSE, AND STRATEGIC THINKING

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BE GIVEN TO SPENDING $ 4 MILLION??? IS THIS THE WAY TO BUILD A SYSTEM?

I AM NOT BLAMING THE TRUST FOR TAKING THE MONEY. NOR AM I ENTIRELY BLAMING DYRS FOR THE LAST MINUTE TRANSFER. I THINK IT IS IMPORTANT THAT WE DO INVEST IN YOUNG PEOPLE TRYING TO PIECE THEIR LIVES AND THEIR FAMILYS LIVES BACK TOGETHER. BUT WE NEED TO BE SMARTER AND MORE STRATEGIC IN OUR SPENDING. I THINK MR. DAVIES WOULD AGREE.

4. I WANT TO KNOW MORE ABOUT THE FY 13 ONE CITY SUMMER INITIATIVE. I WANT TO HEAR ABOUT THE PROGRAM AND THE FUNDING SOURCES. LAST YEAR, CFSA CONTRIBUTED $820,000 TO THE $2.5 MILLION TO THE SUMMER PROGRAM. AS I STATED IN THE PERFORMANCE OVERSIGHT HEARING, THE ONE CITY SUMMER INITIATIVE EXEMPLIFIED THE CAPACITY OF THE TRUST TO MANAGE OR ORGANIZE MULTIPLE PIECES OF A VERY COMPLICATED AND IMPORTANT

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PUZZLE. THE FUNDING FOR SUCH SUCCESSFUL PROGRAMS SHOULD BE CONSISTENT AND RELIABLE. AND IT IS NOT CLEAR TO ME RIGHT NOW HOW THE FY13 PROGRAM WILL BE FUNDED / NOR THE FY 14. 5. AND FINALLY, FY 14 SPENDING PLAN AND THE TRUSTS SPENDING PRIORITES. $3 MILLION IS NOT A LOT OF MONEY. ON MARCH 1, 2013 THE TRUST HAD $9.7 MILLION CASH ON HAND. THAT IS A LOT OF MONEY FOR A NON-PROFIT. A LOT OF IT IS CARRIED OVER FROM FY 12 UNSPENT DISTRICT FUNDS. I WANT TO HEAR HOW THE FOUR PROGRAM AREAS WILL BE FUNDED. I WILL NOW CALL THE FIRST WITNESS.

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