Important Community Briefing on the JCC

January 29, 2014 | Jewish Federation of Metropolitan Detroit

To Our Friends and Supporters:

We’d like to share with you some important information regarding the Jewish Community Center of Metropolitan Detroit, and the Federation’s efforts to ensure its strength as a central institution of Jewish life in our community.

Most Important

The Federation has been a longtime supporter of the JCC and has stood with it in both good times and bad, just as it does with each of its partner agencies. The Detroit JCC has operated under significant financial challenges and long-term debt for more than a decade. The Federation and the JCC recently discovered that those challenges required immediate action. Below, we explain what action has been taken and what is to come. We wish to stress that JCC members, customers, tenants and partners as well as the community as a whole can be assured the organization will continue to serve as their home for exceptional programs and activities.

Background

In 2012, a Federation task force, together with leadership at the JCC, began working to assess the JCC’s financial structure, and to develop a plan to resolve its debt and build a sustainable working model for the future. This past December it was discovered that the JCC’s financial situation is more critical, and the debt larger, than had previously been thought. It was learned that the JCC’s controller had engaged in improper accounting practices, misrepresenting the true financial state of the organization. That employee was immediately terminated.

Leadership Response

Federation retained two highly reputable outside accounting firms to focus on the situation. One firm was retained to manage the JCC’s financial operations, the other to determine the nature and scope of the accounting irregularities. That work is still continuing, though to date there has been no evidence of theft or other criminal activity. It is clear, however, that there is now a critical need to address the JCC’s ongoing operational needs and financial obligations.

On January 21, the combined boards of the Federation and the United Jewish Foundation voted to approve a $950,000 grant from the General Fund to sustain JCC operations in the short term and begin to reduce its debt. It is clear that additional funds will be needed to continue to support JCCs operations and resolve its debt, though the amount and specifics have not yet been determined. Since the General Fund is the Foundation’s reserve for supporting the community in times of special need, this grant did not come from the Annual Campaign and will not diminish the allocation of Federation funds to other beneficiary agencies.

What’s Ahead?

Together with the outside consultants, the Federation and JCC leadership are working to reorganize the JCC’s business procedures to comply with recognized best practices, and to develop a financial plan for eliminating its long-term debt. A new task force has been assembled, comprised of Federation, Foundation and JCC representatives, to develop and implement changes that will improve the long-term stability of the JCC and better position it to meet the current and future needs of our community. While it’s too early to say what those changes will entail, we are confident that the end result will be a stronger community asset. We look forward to reporting back to you on our progress.

The Federation’s response reflects its role as the Detroit Jewish community leader, dedicated to serving the needs of the Jewish people and building a vibrant Jewish future, locally, globally and in Israel.

Thank you for your ongoing support of the Federation and our Jewish community.

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