Philly has terminated its contract with The Consortium, a mental health provider for over half a century

Philadelphia has terminated its $3.8 million contract with mental health services provider The Consortium Inc., funding that allowed the group to work with 2,500 city residents with limited ability to pay.

Mayor Cherelle L. Parker’s administration took the step last month after The Consortium, which is based in West Philadelphia, let its nonprofit status lapse and amid allegations that it submitted financial audits to the city with a “fraudulent” letter claiming they were from an accounting firm, according to a July 18 notice from the city, first reported by Axios.

City Solicitor Renee Garcia said that these problems reflect a pattern of governance issues and financial mismanagement at The Consortium, and that renewing the contract “poses a risk to the City’s operations and more importantly to vulnerable residents receiving mental health services.”

The Consortium has provided mental health, substance use disorder, and intellectual treatment for youths and adults under various contracts with the city for over five decades. It also provides mobile crisis unit coverage for West and Southwest Philadelphia.

John White Jr., president and CEO of The Consortium, said his organization is attempting to get the administration to reverse the decision. He blamed the problems on a former employee he says didn’t file the proper paperwork to maintain the agency’s tax-exempt status, a condition of its contract with the city’s Department of Behavioral Health and Intellectual disAbility Services.

The same employee was responsible for the problematic audits submitted to the city, White said.

The organization has since regained its status from the IRS and is working to provide new financial audits for 2022 and 2023. It already provided the city an authorized audit for 2021, White said.

“We identified a problem, we fixed the problem,” he said.

The Consortium will continue to receive city funds until the end of the year, to give the city time to find a new provider and to provide a transition period for patients.

“The City will work swiftly with the Consortium for a smooth transition since Philadelphians’ mental health is a top priority for the Parker Administration,” a city spokesperson said in a statement.

The Consortium has benefited from a high profile in Philadelphia. When Biden administration officials launched a national mental health lifeline — 988 — in the summer of 2022, they came to Philadelphia for an event at The Consortium’s headquarters.

The West Philadelphia organization was thrust into the news two years prior, after two Philadelphia police officers shot and killed Walter Wallace Jr., a 27-year-old who was undergoing a mental health crisis. Wallace was a patient at The Consortium and received care there just days before his death a few blocks away.

Despite being so near, and despite three 911 calls saying Wallace was in crisis, no one contacted The Consortium. The incident exemplified for some in city government the need for a more robust behavioral health response in addition to, or instead of, police response.

Following the incident, the city invested more funds into mobile crisis units. The Consortium is the mobile crisis provider that covers West Philadelphia.

The biggest chunk of the funding that The Consortium receives annually from the city — about $1.5 million — funds mobile crisis response, the organization said. They were dispatched about 1,200 times last year in West Philadelphia, Southwest Philadelphia, and other parts of the city in 2023.

Last week, The Consortium launched a Change.org petition urging the Parker administration to reverse course. It has garnered more than 1,100 signatures.

“My hope is that the city will see what they’ll be losing,” White said.