THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, March 17, 1995 TAG: 9503170568
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY PERRY PARKS, STAFF WRITER
DATELINE: ELIZABETH CITY LENGTH: Medium: 77 lines
More than $100,000 from the coffers of the Albemarle Area United Way was improperly diverted for personal use over a period of nearly two years, an audit has revealed.
As a result, many public service agencies will be deprived of sorely needed funding.
The United Way's former executive director, J. Graham Foreman, is the target of a criminal investigation into the losses, said Mike Johnson, an assistant district attorney.
Foreman, who resigned in February after being suspended without pay, has not been charged.
He is the only person suspected of wrongdoing, said United Way Chairman Jerry Miller, who disclosed the results of the audit Wednesday night.
A specialist with the State Bureau of Investigation was expected to meet with auditors soon to work on details of the investigation, Johnson said. The district attorney's office hopes to present a case against Foreman to the grand jury May 8.
Foreman, who had served as the United Way's only paid employee since he was hired for the $14,500-a-year job in July 1992, could not be reached for comment.
The agencies that receive money from the United Way were told Wednesday that they would not get a total of about $45,000 they had been slated to receive April 1. United Way officials said they weren't sure about the following quarter's funding.
``It's going to be very devastating to some of those agencies to not see this money,'' Miller said Thursday.
But the United Way simply does not have money to distribute, he said. He would not disclose the agency's current fiscal standing.
Cherry, Bekaert and Holland, the Greensboro accounting firm that conducted the audit, told United Way officials that $102,000 had been misappropriated or diverted.
United Way directors were alerted to the problems after discovering that two versions existed of the organization's year-end audit.
The version Foreman apparently sent to a state licensing office in January suggested that the United Way had up to $50,000 more than what was reported in the official version prepared by a Hertford accountant, officials said.
Miller said United Way funds were regularly diverted through an unauthorized bank account in the agency's name from March 1993 through January of this year.
Donor checks were deposited in the account without board members' knowledge, Miller said, and the money was diverted.
Misused donations were listed as uncollected pledges in United Way records. Miller said the agency's rate of uncollected pledges had increased.
David Bonebrake, executive director of the Boys and Girls Club of Elizabeth City, a United Way agency, urged the organization to move quickly to rebuild the trust of donors.
Otherwise, he said, ``the true hardship will fall upon the children, the homeless, the hungry, the abused. Those are the true victims.''
United Way officials have filed a claim with the agency's fidelity bond, which is a form of insurance. They have also hired an Elizabeth City law firm, Trimpi and Nash, to pursue repayment by Foreman, Miller said.
The United Way board of directors has also begun measures to more closely follow the financial activities of its employees, Miller said. A new executive director has not been hired.
Meanwhile, the 20 agencies in seven Northeastern North Carolina counties served by the Albemarle Area United Way are struggling to cope with the loss of a major funding source.
``It's already starting to hurt us,'' Bonebrake said.
Activity and membership fees at the Boys and Girls Club will have to be increased to offset a possible $15,000 gap in the next six months, he said.
The Albemarle Hopeline, which runs a shelter and other services for abused women and children, will be $4,000 short for the next three months.
KEYWORDS: UNITED WAY INVESTIGATION EMBEZZLEMENT by CNB