Embattled local addiction treatment provider Samadhi has laid off more than three quarters of its workforce amid a funding crisis that now includes the loss of support from a major donor, the NoVo in Kingston foundation. Samadhi Board President Kathy Nolan said Wednesday that remaining staff would oversee a restructuring effort that includes working to increase insurance reimbursement rates for its outpatient drug treatment program and shifting responsibility for the nonprofit’s finances away from founding executive director and board member David McNamara.

“It’s a pretty thin way through at present given the difficulties and obstacles we have faced over the past two years,” said Nolan. “So [the outpatient treatment program] is where we’re putting our energies right now and we’re continuing to plan and assess if there are any additional actions we can take that would help.”

Last week the nonprofit, which incorporates mindfulness and cutting-edge therapies in its treatment and outreach programs, abruptly shut down an emergency housing program at a former motel in Saugerties. The closure of the 27-bed facility came after Samadhi officials said they learned that they would not be reimbursed for $400,000 for individuals who stayed there while ineligible for or not enrolled in an emergency housing program run by the Ulster County Department of Social Services. Officials at the nonprofit, Nolan said, mistakenly believed that they would be given an opportunity to retroactively enroll qualified clients in the housing program and be reimbursed for their earlier stay. (DSS Commissioner Michael Iapoce has said that the nonprofit had been consistently informed about reimbursement requirements since they began participating in the emergency housing program in 2023.)

After laying off staff at the Saugerties facility, Nolan said Samadhi leadership realized that deeper cuts were needed to maintain fiscal viability. By this week, Nolan said the nonprofit had laid off 25 of 33 employees. In addition, Nolan said, she anticipates the group will end its lease at the county-owned building at 368 Broadway that houses the outpatient treatment program and consolidate all operations at a building on Sawkill Road that serves as its administrative headquarters. Nolan added that Samadhi would continue to operate its street outreach program, which is funded through a contract with the state Office of Alcohol and Substance Abuse Services (OASAS) and the outpatient treatment program, albeit at reduced levels.

“We’re down to eight people right now, which is pretty close to the minimum we need to provide any meaningful services,” said Nolan.

Nolan said Samadhi’s finances have taken another hit with the decision by NoVo in Kingston to discontinue support for the program. Nolan said that while Samadhi’s long-range plan had always been to move away from grant funding and become self-supporting based on insurance reimbursements and contracts, officials had hoped for another infusion of funds from the foundation which has poured billions of dollars in projects programs in and around Kingston for the past decade. Records show that NoVo has donated more than $2 million to Samadhi since 2020. In a statement to Kingston Wire, NoVo in Kingston Director Megan Weiss-Rowe confirmed that no additional grants to Samadhi are forthcoming in the immediate future.

“Our current funding commitments to Samadhi have been fulfilled and no additional grants are planned,” Weiss-Rowe wrote. “This difficult decision was based upon NoVo in Kingston’s own due diligence and review of Samadhi’s financial and organizational management, and was arrived at after months of discussion throughout last year with Samadhi’s executive director.”

Nolan acknowledged that the decision by NoVo to halt its sponsorship of Samadhi was based on the nonprofit’s inability to provide the results of an outside audit of its 2023 financials. The audit, which is now nearly a year overdue, follows one of Samadhi’s 2022 records that included a “qualified opinion” — a serious red flag in the accounting world — based on auditors’ inability to account for $55,000 in ATM withdrawals from the group’s accounts. That audit prompted Ulster County Comptroller March Gallagher to stop payment on a $797,000 county contract to provide outreach services. Gallagher has said that she will not release more than $100,000 in funds owed to Samadhi for services already rendered under the contract until she sees the results of the 2023 audit and is assured that adequate financial controls are in place.

Nolan said the audit has been delayed because difficulties getting proper documentation to auditors had pushed the probe into tax season. But she conceded that the final document would likely contain additional qualified opinions. Nolan said that some of the fiscal controls suggested in the audit of 2022 records, which was not completed until late 2023, had not yet been fully implemented at the time. Nolan added that the 2023 audit was also likely to show problems with payroll tax reporting. Nolan said that she believed the nonprofit would pass the audit and remain qualified for contracts through entities like OASAS that do not consider a qualified opinion a deal-breaker.

“We have made improvements [since 2023] and we will continue to make improvements as we try to get through a challenging time,” said Nolan.