Excerpts of the Audit of the D.C.-Area United Way

Following are excerpts from the executive summary of an investigation of the United Way of the National Capital

Area by PricewaterhouseCoopers, in Washington. The summary and full 243-page audit report can be viewed on the charity’s Web site at http://www.unitedwaynca.org.

Certain key individuals we requested to interview respectfully declined our written or oral requests to be interviewed on advice of their counsel due to the ongoing criminal investigation being conducted by the U.S. attorney’s office in Alexandria, Va. This list of individuals included, but was not limited to, Mr. Oral Suer. . . .

We were also told by an employee that Mr. Suer, upon his departure from the United Way of the National Capital Area (UWNCA), took away “several station-wagon loads” of UWNCA files from the office. We have had no access to these files and no way to determine what relevant data, if any, they contained. . . . In a number of instances, UWNCA itself no longer had original records, and we had to view these documents at the FBI’s offices. . . . UWNCA records indicated that Oral Suer, former executive vice president, appears to have requested and was paid a large amount of apparently unreimbursed and/or potentially questioned payments. The . . . payments totaled approximately $786,300, for the period 1974 to 2002, and this amount excludes the approximately $1,747,500 in regularly authorized payroll also made payable to him in the same period. These payments often took the form of unreimbursed advances, potentially questionable vacation/sick leave cash payments, and apparently excess deferred compensation paid. . . .

In excess of his regularly authorized compensation and deferred compensation, Mr. Suer received in the period 1974 to 2002 (exclusive of his regular salary, consulting contract, and pension payments) roughly $2.4-million in disbursements from the UWNCA. We also identified apparent repayments recorded in various places to the organization of roughly $961,200, and after factoring in an estimated amount for the value of annual leave and approved deferred compensation, found Mr. Suer to still have received payments in excess of those which he had been officially authorized to receive. We could not definitively verify that all such payments and reimbursements actually were received or made by Mr. Suer, but the best available records indicate they were, and we also gave him credit for any reimbursements referred to in the same records.

UWNCA records also indicate that Mr. Suer apparently requested and was paid from the UWNCA pension plan an excess and apparently inappropriate pension amount of $230,407. The organization later replenished this amount in full to its own pension plan (i.e., UWNCA as an organization reimbursed its pension plan). Upon learning more details of this transaction, the organization has also sought formal repayment of this amount from Mr. Suer. However, as of the date of this report, this amount has not been repaid by Mr. Suer.

Mr. Suer on a number of occasions made payment of his own personal pledges to UWNCA campaigns via UWNCA advances requested by him and paid to him. We found evidence of $20,259 in his own personal contribution pledges being satisfied by his signing over advance checks he requested and received from UWNCA. We also found evidence that in one instance (1989), he was apparently reimbursed by the organization for a $9,000 campaign-pledge payment made.

For the most part, Mr. Suer’s receipt of these advances and vacation and sick leave exchanges were ultimately authorized by Mr. Suer himself, and known only to a relatively few individuals but apparently not to the full board of the UWNCA. (In some instances, it appears that certain of these payments were known to one or perhaps more board members.)

Mr. Suer’s payments of unused vacation and sick leave, assuming his eligibility for 42 possible days of accrued leave per year, equated to his receiving payment for roughly 28 years’ worth of untaken vacation and sick days. This is also despite the anecdotal evidence we received indicating that he was often away from the office and regularly took leave.

We also found a significant number of expense reimbursements made to Mr. Suer that we also believe to be questionable. For example, of the total we could determine Mr. Suer received for expense reimbursements between 1974 and 2002 of roughly $300,000, only 27 percent of this amount, or roughly $90,000, was supported by adequate supporting documentation. The remainder, or roughly $210,000, has been questioned by us as unsupported.

Some of these potentially questionable charges also involved meals at restaurants on weekends. Some of these also included meals and other charges made on weekends in locations near where Mr. Suer’s children attended college. Furthermore, we found evidence of items that either appeared to us to be potentially personal in nature, or had been marked with a “P” allegedly indicating they were personal. This marking was made either by Mr. Suer or another UWNCA employee. Thus, this raises concerns that a number of these charges were unsupported and inappropriate. . . . We could not, however, definitively determine how much, if any, of these apparently personal credit-card charges were inappropriately paid to Mr. Suer.

We have found evidence indicating that at least as early as 1986, the existence of large unreimbursed advances owed by Mr. Suer to UWNCA was either known to or should have been known to William Tull (a then board member) and Councilor Buchanan and Mitchell (“CBM,” UWNCA’s then-outside auditors), as well as by Mr. Suer and Ms. [Mignone “Millie”] Walter, director of finance until 1997. For example, in 1988, Mr. Suer was stated in an internal CBM memo to have unreimbursed advances of $578,174.

We could not find evidence that any immediate action was taken by any of these parties, despite this knowledge by others, to alert the full board and the giving public to the existence of these large unreimbursed advances. Mr. Suer failed to repay these advances quickly and failed to immediately end the practice of taking more advances. We also could find no mention or discussion in the minutes of either the UWNCA board meetings or of the UWNCA Administration & Finance Committee meetings indicating Mr. Tull or CBM had informed the full board of the status of Mr. Suer’s indebtedness. In addition, no disclosure of the amount or extent of Mr. Suer’s large unpaid advances (which might have represented disguised “loans”) appeared in the organization’s notes to the financial statements. In fact, in a number of years, Mr. Suer’s recorded and unreimbursed advances rep-resented almost the entirety of the financial-statement line item “Accounts Receivable — Employees.”

Rather, it appears Mr. Suer was provided with significant time (i.e., years) to eventually reimburse these amounts through means such as forfeiture of his deferred compensation amounts and possibly the awarding of bonuses. We found no evidence that this, however, was considered by or authorized by the full board. Further, we found that the firm was asked by Mr. Tull to monitor Mr. Suer’s advance-repayment status for several years. In certain of the CBM memos, Mr. Suer was also deemed recalcitrant in his repayment efforts. While we could not determine conclusively if these advances were ever fully reimbursed, we found that some of them appeared to be.

We found, in addition, that Mr. Suer received $78,000 in consulting income for the period of time after his “retirement” (from January 2001 to January 2002).

However, [Norman] Taylor, his successor, informed us that Mr. Suer provided little in the way of personal services to earn that amount, and Mr. Taylor believed it to be more in the manner of a payment of a not-to-compete agreement; that is, Mr. Taylor stated that he considered Mr. Suer was being paid so as to not to move his expertise and fund-raising contacts to competitive not-for-profit organizations.