Catholic Charities exaggerates number of clients served per year, employees say

Charity claims publicly it served 254,000 people in one year

SAN ANTONIO – A former vice president of Catholic Charities of San Antonio and other former and current employees say the organization is greatly misrepresenting how many people it serves each year. 

The nonprofit has repeatedly claimed that it serves more than 250,000 clients. 

It has appeared in the group’s annual report for fiscal year 2018, been cited at board of directors’ meetings and publicly proclaimed in newspaper articles.

For example, the headline of a recent Express News article read “Team effort by Catholic Charities served over 250,000.” The author of the Aug. 18 story was the group’s CEO, Antonio Fernandez.

“I think it’s misleading,” said Peter Stranges of the figure. Stranges was the vice president of programs for the charity, often considered the “number two” position at a social services nonprofit.

“I don’t think it tells a very accurate picture of the number of clients you’re serving,” he added. “And on top of that, I think it’s unfair to do this ‘stuff.’”

Catholic Charities Annual Report

That “stuff” is what some workers at Catholic Charities call a “unique system” for counting who is being served by the nonprofit’s programs that they said was instituted after CEO Fernandez was hired in 2013.

“There started to become a huge focus on numbers,” remembers ‘Alex’, a longtime employee of Caritas Legal Services, the law clinic run by Catholic Charities. The former worker said that the main number that mattered was the number of clients served per month and that quotas were even instituted after Fernandez took over.

Financial records paint troubling picture of Catholic Charities

“They would check on us quarterly to see if we were making our numbers,” said ‘Alex’, adding that the “new counting system” soon followed.

‘Alex’ said many employees had the same reaction: “It just didn’t seem like it was right.”

The reason? ‘Alex’ and numerous other charity employees who spoke with the KSAT 12 Defenders said originally, when a person or "client" came in to a charity program for direct help, they would be counted as one client.

So what changed?  

Employees said that suddenly the charity’s upper administration wanted them to start asking all clients how many family members they had at home. Then they would be added to the client total too, as indirect clients, whether they had ever been seen or had ever even walked through the door.

In real terms, this meant where once the charity might have counted only one client, now if that person had five family members, they could count him as six clients.

“You're making it seem like you're helping all these people,” said ‘Alex’, “but in reality you're only doing about half the work.”

When asked if the figure of a quarter-million served was accurate, ‘Alex’ replied: “No.”

Adults without required background check worked with children at Catholic Charities

However, an internal charity PowerPoint presentation called State of the Agency Fiscal Year 2018 shows explosive client growth for Catholic Charities.

A bar graph chart shows for 2013 that the amount of clients was more than 50,000 and well below 100,000.

Yet, it also shows that by fiscal year 2017 the amount of clients counted was over a quarter-million.

While the Catholic Charities’ employees interviewed by the Defenders all agreed there had been an expansion in the amount of programs being offered, they also all stated that they didn’t believe it accounted for such a high increase in reported clients.

But Stranges said there is another aspect to how clients were counted that played a part in that 250,000 figure.  

He said many of Catholic Charities’ programs have the same clients from month to month. Yet, he and other charity employees say that those clients would be counted each month as a unique new client.

So, previously, where there had only been one client, now the year end total could show 12 individuals. 

On top of that, he also said since any family members were also being counted as clients, they also could end up being counted the same way -- five relatives could end up being counted as 60 individuals at the end of the year, an exponentially higher number.

Stranges points to Catholic Charities After School Program as an example.

“About the same group of 50 kids come” each month says the former executive, but adds that most months, “They report 210” because of the counting technique that’s used.

“They’re counting them as unique clients plus the families every single month,” said Stranges.

A charity document obtained by the Defenders supports his claim. Called Fiscal Year 2018 Clients Served, it shows that for a number of months the After School Program reported 210 served.

The year-end total for the program shows nearly 3,000 clients served.

Fiscal Year 2018 Individuals Served

Local and national experts in nonprofit administration expressed dismay to the Defenders about counting clients this way.

The head of another Texas-based nonprofit, who spoke with the Defenders on background, said it would be virtually impossible for an agency with a staff of its size to provide direct services to that large of a group, year after year.

‘Pattern of problems': City moves Catholic Charities to ‘high risk' status, withholds funds

He also questioned the validity of counting family members as receiving services, since they had no direct interaction with charity staff.

‘Pattern of Problems’

Issues with numbers have been a continuing event with Catholic Charities of San Antonio.

A Defenders investigation last month revealed that the city of San Antonio placed Catholic Charities in “high risk” status and withheld more than $2,000 in funding after a review of the local nonprofit this summer uncovered a list of concerns.

The issues included the nonprofit being unable to provide source documents for payroll, health insurance, workers compensation and office supplies for programs in which it received money from the city.

The charity was also unable to provide documentation to the city proving that its internal financial recordkeeping had been properly compared with bank records.

Additionally, the Office of the Governor and the Texas Attorney General’s Office separately placed financial holds on grant funds awarded to the charity after it repeated failed to turn in necessary documents, records obtained by the Defenders show.

Troubling audits, lack of required background checks

Catholic Charities’ 2018 audit was the second audit in a row that found policies “not consistent with accounting principles generally accepted in the United States of America.”

The findings included checks over $2,500 processed without the required two signatures, a new bank account opened but not reflected in the general ledger accounts, missing support documentation for credit card purchases and the value of in-kind donations being consistently exaggerated.

The results of the audit have caused at least one program partner to deny a request for funding from the agency.

The Texas Veterans Commission in January rejected Catholic Charities’ request for funds from a general assistance grant, citing material weakness in the charity’s audit.

The commission had awarded Catholic Charities $300,000 for both the 2017-2018 and 2018-2019 grant terms.

CLICK HERE: Adults without required background check worked with children at Catholic Charities

The same audit revealed that more than 50 paid volunteers in the nonprofit’s foster grandparent program did not have their backgrounds properly screened prior to working with children.

How many clients?

Stranges said other Catholic Charities don’t report clients the same way as the San Antonio chapter.

He previously worked for nearly a decade at the Galveston Houston branch where he says the data is handled differently, with an emphasis on counting clients who receive a direct service from the charity.

In fact, in their 2017-2018 annual report, the Houston chapter reported 102,519 “lives impacted” and notes that there is some client duplication due to the same people being enrolled in multiple programs.

“They openly say they serve about 100,000 people a year” said Stranges of his Houston employer.” And I do believe that Catholic Charities San Antonio serves about the same and that's something to be very proud of.”

He added, “There's absolutely no need to say you're serving a quarter-million people.”

2017-2018 Catholic Charities Galveston-Houston Annual Report

So, why is the San Antonio chapter different? Nonprofit experts, consultants and employees tell the Defenders that the issue may be money. 

They said when it comes to winning grants and awards, especially from the federal government and from foundations, big is better.

The industry term for it is “capacity,” that a funding provider likes to see that a charity has a strong infrastructure and one sign of that is the amount of clients they have successfully served.

In fact, the Defenders have obtained grant applications written by Catholic Charities San Antonio. In some of them, in the “narrative” section of the form even larger yearly totals are cited for the charity  “over 280,000 people” in one; 292,445 “beneficiaries” in another.

So what does Catholic Charities have to say?

The Defenders contacted the nonprofit and requested an on-camera interview with Fernandez about how it counts clients. 

A Catholic Charities spokeswoman sent back the following statement:

Regarding Catholic Charities’ client counts, the numbers presented in the report account for duplicated and unduplicated, as well as direct and indirect clients. For example, if a single mother requests food to feed her family, we count her and her children. Assistance is being provided to each of them. We also count how many times and when they request assistance to help us understand the extent of her needs and how we help her create a path to self-sufficiency.
It is important to us to continue to improve our policies and procedures in order to deliver quality, impactful programs and services. This includes the way we count clients and points of service delivery. To that end, we already invested in a Customer Relationship Management platform to assist in accurately tracking and managing clients and also their case management. The system is scheduled for full implementation by end of Fiscal Year 2020.

We continue to assess our strengths and weaknesses while moving forward to effectively serve our clients and remain transparent in our data collection and reporting.

While the experts consulted by the Defenders said that when it comes to providing food for a family, it’s appropriate to count all family members as having been served, former and current Catholic Charities of San Antonio employees said many of their programs only provided a direct service to one individual at a time.

Stranges said he tried to get Fernandez to change the San Antonio chapter’s methods for counting clients.

“And he pretty much brushed me off,” says Stranges, “and said 'No, the way I do it is fine. The board knows about it, it's not a big deal. This is an okay way of counting things.’”

This summer, after only 10 months at Catholic Charities of San Antonio, Stranges resigned.

He said in good conscience that he just couldn’t stay.

But, he also said, he’s still haunted by a conversation that he had with a fellow senior manager after looking at some of the charity’s inflated client numbers.

“I was saying, ‘These numbers don’t make sense to me,’” he said. “And she’s like ‘Well, it’s the point of no return. We can’t really go back at this point,’” said Stranges.

Editor's note: This story has been updated for clarity.

About the Authors:

Emmy-award winning reporter Dillon Collier joined KSAT Investigates in September 2016. Dillon's investigative stories air weeknights on the Nightbeat and on the Six O'Clock News. Dillon is a two-time Houston Press Club Journalist of the Year and a Texas Associated Press Broadcasters Reporter of the Year.

David Raziq is the executive producer for the Defenders investigative team.