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April 27, 2016

D.C. Youth Group That Got Taxpayer Millions Goes Bankrupt

A Washington, D.C., nonprofit serving at-risk youth that received millions of dollars in government funds annually is bankrupt and will close down, The Washington Post reports.

The decision by the D.C. Trust's board was attributed in part to overspending on and by staff at the organization, which funded more than 70 after-school and anti-violence programs for District youths. Board members said the nonprofit, formerly known as the D.C. Children and Youth Investment Trust Corp., did not have enough money to cover operating costs and promised grants to other groups.

Board members said 40 percent of $5 million that the D.C. government allocated to the group last year went to rent, salaries, and other overhead and that two former trust officials used taxpayer money to cover tens of thousands of dollars in credit-card charges, some for personal expenses. One of the two, ex-executive director Ed Davies, said he had repaid the nonprofit for all personal purchases. He blamed its financial woes on years of mismanagement and on underfunding by Mayor Muriel Bowser's administration.

The organization has been plagued by scandal in recent years. Former D.C. Council member Harry Thomas Jr. was sentenced in 2012 to 38 months in prison for using the trust and other nonprofits to embezzle $350,000 in taxpayer funds. In 2013, Congressional investigators criticized the organization for lacking controls to properly administer a $20 million-a-year, federally funded school-voucher program.