Fast-Growing Daycare Program Can't Pay Bills

Hasidic-Run B'Above Won Giant Contract From New York City

Too Far Too Fast? The rapid growth of a little-known child care group may have too much for it to manage.
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Too Far Too Fast? The rapid growth of a little-known child care group may have too much for it to manage.

By Josh Nathan-Kazis

Published November 14, 2012, issue of November 23, 2012.
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A little-known New York City child care network that won a huge city contract for government-subsidized day care programs has had trouble paying its bills, the Forward has learned.

Less than a month after the group — which is operated by a Hasidic rabbi — opened 20 new subsidized child care sites, it told employees that it would be unable to make payroll, according to an e-mail from the group’s chief financial officer, obtained by the Forward.

The network, called B’Above Worldwide Institute, was relatively unknown until this spring, when the Forward reported that it was set to receive contracts worth roughly $31 million annually for 3,000 children at 42 day care centers across New York City. Previously, it had served just 1,000 children at 19 sites. Critics at the time questioned how the network received so many child care slots — 1,000 more seats than the next-largest child care network.

The organization blames its lack of funds on the city, which it says hasn’t lived up to its funding commitments. The shortfall deepens outstanding questions about EarlyLearn NYC, the city initiative that awarded the new contracts to B’Above.

EarlyLearn NYC constituted a massive reorganization of the process by which the city allocates funds for child care programs for low-income families. City officials have questioned the process by which the city’s Administration for Children’s Services (ACS), which oversees the program, chose new child care contractors — in many instances, at the expense of longstanding local providers. New York City Comptroller John Liu called the process a “disaster” in a June statement.

EarlyLearn NYC’s child care centers opened for business on October 1. The centers are now serving 45,000 infants, toddlers and preschoolers in scores of sites around the city. The contracts governing the program, however, have not yet been fully approved. Some are still making their way through the city’s lengthy contracting process, and ACS has extended bridge loans to some of the organizations to help them cover their bills as they await payment from EarlyLearn NYC.

In an email to his staff on October 24, B’Above CFO Jeffrey Stern blamed ACS for his organization’s inability to pay salaries. ACS “has not provided any funding to us for the EarlyLearn program,” Stern wrote. “Until we receive funding from ACS, any payments due our sites, for payroll, leasing, or otherwise will not be met.”


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