irectors of the metropolitan Washington United Way, the nation's second largest, say they are being denied access to records of the charity, including an audit report that they were told on April 2 found only minor problems.
In fact, the audit uncovered mismanagement at the United Way of the National Capital Area, including inadequate financial controls, unexamined executive expense accounts and below-market-value sales of cars owned by the charity to the families of current and former managers.
More significantly, it found that at least twice management had hidden from the board serious adverse findings by its regular auditors, said Ross W. Dembling, a former director of the charity. Mr. Dembling said he had been given details about the report from Anthony J. Buzzelli, the board member overseeing the audit.
Exactly what the audit found has not been disclosed. Mr. Buzzelli and the charity's management and general counsel will not allow the rest of the board to read it, four directors said.
One of them, Donna Kloch, said she had repeatedly asked to see documents, including the audit and the contract with McGladrey & Pullen, an accounting firm the board had hired to conduct the audit.
"They say again and again that the audit is privileged information and so it is going to the attorney instead of the board," Mrs. Kloch said. "But how can it be privileged from us, the board, because we are the client?"
A District of Columbia law gives charitable board members, or their representatives, the right to examine the charity's books and records.
Instead of receiving the full audit report, board members on April 2 were given a summary by Mr. Buzzelli, chairman of the board's audit committee, formed last fall to investigate the charity's finances.
In comments to other directors and in a public statement, Mr. Buzzelli has said the audit found only minor problems at the charity, which raised $93.5 million last year.
But at an April 17 meeting with members of an affiliate charity, the United Way in Alexandria, Va., Mr. Buzzelli acknowledged serious, chronic problems, Mrs. Kloch and others who attended said.
Some of those present said that an apology was owed to Mr. Dembling, a Virginia lawyer who was ousted from the United Way board last June, a month after he asked questions about possible misuse of money by the charity's management.
Mr. Dembling said that when Mr. Buzzelli came to his office last week he made no apology, but in response to questions disclosed more shortcomings found in the audit, including a lack of basic financial controls.
Mr. Dembling said he had asked why the charity's longstanding accountants, Councilor, Buchanan & Mitchell, had not reported the shortcomings to the board. He said Mr. Buzzelli told him the charity's management had stopped the Councilor firm from sending the critical reports, known as management letters, to the board. Mr. Buzzelli and the Councilor firm have not responded to requests for an interview.
Accounting experts said that auditors worked for directors, not management, and that the Councilor firm was obligated to inform the board of any adverse findings.
United Way, American Red Cross, etc. are a bunch of thieves.