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Jewish Centers' Parent Tackles Financial Woes

Management: Nonprofit agency institutes bookkeeping procedures designed to prevent the cash-flow problems that threaten to close four of its seven sites.

January 12, 2002|BOB POOL | TIMES STAFF WRITER

Operators of a network of financially troubled Jewish community centers in Los Angeles said Friday they will try to turn their agency around with tighter budgeting and using outside accountants to oversee money management.

The changes are designed to prevent the nonprofit Jewish Community Centers of Greater Los Angeles from ever again being caught by surprise by cash-flow problems like the one that now threatens to close four of its seven sites, officials said.

Jewish leaders initially feared they would have to close five of the centers when they discovered in October that they faced a $2.8-million deficit in their $16-million operating budget. As the extent of the crisis became known, the centers' chief financial officer resigned, and officials announced that cultural and recreational programs would be slashed and 49 employees would be laid off.

Last month, the popular Westside Jewish Community Center was spared from closure and some of its programs and jobs were restored after members raised $113,000. The fates of centers in Silver Lake, Santa Monica, Sherman Oaks and Granada Hills are expected to be decided Tuesday by directors of the agency.

The new bookkeeping procedures announced Friday include the hiring of a Century City accounting firm, Licker+Ozurovich. The firm's founding partner, Andy Ozurovich, will serve as the Jewish Community Centers' chief financial officer.

The changes were recommended by an independent consultant who spent several months studying the organization's financial structure. The consultant suggested that new daily and monthly financial reports be implemented to allow for "accurate management monitoring," officials said.

"With these moves, our agency will have the accountability in place for all our financial systems," Marty Jannol, president of the community centers, said in a statement. "This will allow us to move forward with our restructuring with full financial accountability and transparency for the community."

Using the accounting firm for payroll administration, budget preparation and other bookkeeping chores will save the centers $200,000 a year, said David Novak, a spokesman for the centers.

By more closely monitoring expenditures, directors of the agency will be able to avoid future calamities, he said.

"The agency has always run at a deficit. This year the magnitude of the deficit was too large for us to continue going forward as we were presently structured."

Novak said the centers in Silver Lake and Santa Monica have been put up as collateral for a $1.1-million loan to help with current bills. He characterized the status of those centers and of the ones in Sherman Oaks and Granada Hills as "fluid."

"Some of the Jewish Community Centers will probably be sold. Decisions will be made next week as to programming and which centers may be sold," Novak said.

Although the extent of the financial crisis was a jolt, it came as the result of decades of poor decision-making, said Jannol, a lawyer who lives in Studio City and took over the unpaid position of agency president last month. Declines in revenue accelerated last year as income from activity fees dropped 20%; last fall, nearly a third of the centers' users failed to renew their memberships, he said.

For years, when "all of the indicators pointed to closing centers, modifying programming and relocating, we lacked the courage to make the hard decisions. . .," Jannol said. "Now we're prepared to."

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