The Police Athletic League of Delaware, which was harshly criticized in a scathing report last fall by New Castle County's auditor, appears to have quickly righted itself.

By implementing all of the major reforms recommended in the report, the once-malfunctioning agency is in its best financial shape in a decade, PAL officials said.

The changes began in November, after a News Journal story about Auditor Bob Wasserbach's report and just before the County Council voted 10-3 to give the centers in Hockessin and Garfield Park more than $200,000 in increased payments over the next two years.

Robert Jameson replaced Jim Riggs as executive director and former County Executive Tom Gordon replaced Vince D'Anna as board chairman days before the council took its vote.

At the time, PAL officials said they needed the money to continue to operate. But some council members wanted evidence that PAL had tightened financial controls before they would OK the money.

Gordon, who was on the board when the troubles took place, said things have improved in the past six months, and vowed they would continue to get better.

"We got a little lax when it came to policies," he said.

Before the audit, the board met infrequently and the staff didn't do a good job of managing the agency's finances, Gordon said.

In January, the PAL board began meeting regularly, and since then, it has adopted policies to eliminate nepotism and conflicts of interest, protect whistleblowers, establish better financial controls and retain important documents for a longer period of time, board treasurer David Grimaldi said.

The PAL chapter, established in 1984, has also joined the Delaware Association of Nonprofit Agencies, ended its relationship with a third-party fundraiser that took 62 percent of every dollar raised and no longer pays for 100 percent of the agency's full-time employees' health care benefits. 

The four employees now pay 20 percent of the cost.

Five new board members have been added, Jameson said. Five vacancies on the 20-person board remain, but should be filled next month.

Marcus Henry, general manager of the county's Community Services Department that worked closely with PAL on implementing the improvements, said he was satisfied with the results.

"PAL has shown commitment and leadership in stabilizing its financial situation," Henry said.

Tightening control

PAL runs afternoon recreational, athletic and educational programs for children at the centers during the day, and the county runs a variety of programs for adults in the evening.

The annual budget is about $1 million, which comes from rent paid by the county as well as state aid and a mix of federal and private grants.

The agency is on track for a $250,000 surplus for its current budget year, which ends June 30. It had a $420,000 deficit in 2008 and was $200,000 in the red in 2009.

"The county money helped, and the tighter financial controls resulted in more revenue," Grimaldi said. "Before, we ran deep deficits every year and were teetering on insolvency. I think this is a turning point."

Other reforms have produced additional positive results, Grimaldi said. For example, revenue from dances has gone up about 75 percent since the new oversights have been installed.

Gordon said records about attendance and collections had been poor; so it is not known if more people are attending dances, or if someone was stealing the money.

The new nepotism policy led to the resignation of board member Joseph Freebery, whose wife, Jo Ann Freebery, is PAL's site coordinator.

The agreement for the county to give PAL more money has helped ease years of tension, Gordon and Henry said.

In order for PAL to improve financially, the county needed to give the organization more money or use the facilities less frequently, so the centers could be rented out to other groups, Gordon said.

"There's more work to do," Gordon said. "We've got some more money for rents, but we need to talk with the county about them using it less so we can use it more for kids programs and for other events."

"When more kids occupy the places during critical hours, crime goes down and we make better citizens," he said.

Tom Kovach, Lisa Diller and Robert Weiner were the three County Council members who voted against giving PAL the additional $200,000.

"New policies are nice, but we need results," Kovach said. "We won't continue to support them unless they demonstrate positive results. We'll be watching and hoping."

Weiner unsuccessfully lobbied last year for the county to take control of PAL. He complained the board and staff were full of "political cronies" such as Gordon; Joseph Freebery, brother of Gordon's former top aide, Sherry Freebery; and D'Anna.

"I was aghast at the conduct of the previous board, which was a textbook example of how an agency should not be run," Weiner said. "I'm encouraged by the new board's conduct so far and look forward to seeing how they perform over the next few years."

Four of the five new board members -- Iris Donato, Na-Tasha Williams, Edwin Barlow and Lee Jarmon -- are community members with no political connections, Grimaldi said. The fifth, William Oberle Jr., is a former state lawmaker who is an unpaid lobbyist for the Delaware State Troopers Association.

The county owns the land on which the centers are located, which are leased to PAL for $1 a year. PAL had the structures built at both sites and the county later built an addition at Garfield Park.

The agreements between PAL and the county, which remain in effect until 2043 at Garfield Park and until 2040 at Hockessin, state the buildings become the county's property if PAL fails to operate functioning centers.

From 2003 to 2007, the county paid the Hockessin PAL $12,500 a month and Garfield Park PAL $10,666 a month, mostly to lease space for county programs.

In 2008, those payments were cut by 4 percent because of the county's budget woes.

As part of the agreement, the county increased those payments by $4,460 a month for both facilities. Those additional payments total $107,000 during the two-year period of the proposed lease amendment.

The county also gave the centers two one-time payments that totaled $97,000. One was for $44,480, which represents a giveback of the 4 percent reductions in monthly payments from 2008 to 2011. The other was for $52,520, which is an eight-year, 2 percent retroactive increase in payments. The second one-time payment is to account for electric and other costs that went up over the past eight years, while the county's payments to PAL didn't increase.

Council is scheduled to get an update today on what's happened in the last six months.

"I will be happy to see the improvements," Diller said. "The whole goal is to get this thing functioning so that kids can be served."