SAN ANTONIO – It wasn’t just another meeting at Catholic Charities of San Antonio that Thursday morning.
Nearly 100 employees attended the Oct. 3 event known as the State of the Agency conference at the nonprofit’s headquarters at 202 West French Street, just north of downtown.
Also there was the well-known, publicity-friendly president and CEO of the agency, Antonio Fernandez.
It soon became clear he was not going to get off "easy" with what were apparently some very unhappy staff.
Some described the atmosphere as “tense”, while others called it “very tense.”
Part of the reason for the mood: The multi-million dollar nonprofit’s financial, accounting, and other problems revealed by the KSAT 12 Defenders in a series of investigations since July.
A more than 90-minute audio recording of the meeting, obtained by the Defenders days after it took place, included Fernandez making claims to his staff that have since been called false.
During the gathering, Fernandez was recorded saying that possible tough times could be ahead for the agency and its staff.
"For instance, United Way, not just Catholic Charities, but all the agencies overall in the San Antonio and the county, they have cut funding 41 percent," Fernandez said.
However, United Way officials told the Defenders this month that its funding for agencies in the city and county only decreased an average of 9 percent, with some agencies actually getting more funding than in previous years.
They said Fernandez’s claim that funding went down 41 percent across the board for all agencies in San Antonio and Bexar County was false.
Last month, a Defenders investigation revealed that Catholic Charities of San Antonio is greatly misrepresenting how many people it serves each year, using inflated client counts.
In speeches, newspaper articles, and grant essays, Catholic Charities of San Antonio claimed to have served more than 250,000 area residents.
The Defenders spoke with a former officer of the charity who described this as a deliberately concocted "mirage."
Catholic Charities employees revealed to us that instead of simply counting those who receive a direct service from the charity, they are often required to also count clients' family members, even if they receive no direct service or have never even been to the charity.
Additionally, in some programs that the nonprofit offers, the client and their family members are counted each month as new and different clients.
The Defenders interviewed a former vice president of Catholic Charities of San Antonio who was one of many that found the method of counting clients disturbing and deceptive.
As an example, he pointed to an after-school program run by Catholic Charities.
“They're counting up their serving about 3,000 people, when in reality it's serving about 50 kids,” said Peter Stranges, former vice president of programs.
This brings us back to the October staff meeting. In it, an employee asked Fernandez about discontinuing that method of counting clients.
His surprising reply was that it wasn’t his decision but the charity's board of trustees.
“The board decided how we count numbers," the CEO said. “If the board asks us to count a different way, we do what the board says."
In addition, Fernandez also claimed that other chapters of Catholic Charities were using the same inflationary method of deciding who was one of their clients.
"We spoke to Catholic Charities (Galveston) Houston. We're counting like they do," Fernandez said.
The Defenders spoke with several employees from the Galveston-Houston branch of Catholic Charities. They deny using the same or similar counting method as that used at the San Antonio chapter.
Forner VP Stranges previously worked at the Houston chapter for nearly a decade and was involved with client counting there. He also denies that Houston uses the same counting method as San Antonio.
The annual reports from Galveston-Houston tend to back up their denials, as its totals for clients-served are less than half of San Antonio's claim of more than a quarter-million people.
Troubling audits, lack of required background checks
Catholic Charities of San Antonio’s 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 consistently exaggerated values of in-kind donations.
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.
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.
Fernandez critical of the Defenders
Early in the Oct. 3 meeting, Fernandez attempted to downplay the Defenders’ investigations.
“We have one reporter, one TV station, KSAT,” he told his subordinates, "who has had already four negative stories about us.”
“Mister whatever-his-name-is,” he added, apparently referring to reporter Dillon Collier.
Fernandez then went on to compare the investigative broadcasts with what he said were many more “positive” stories by other local outlets.
The audio went on to reveal some clearly uncomfortable moments during the meeting.
Employees had previously emailed in questions for the agency head, which he then read out loud.
For example, early on there was this question:
"If Catholic Charities and Antonio (Fernandez) have nothing to hide," he read, “why does the CEO run away and not face the camera and tell the truth about Catholic Charities?"
An embarrassed silence followed as the employees murmured.
That’s because in the Defenders’ first report, the head of the nonprofit ran from Collier’s questions and sped away in a vehicle driven by a senior staff member.
At the meeting, an employee broke the silence.
"You were exercising, right?" she joked to Fernandez.
Fernandez never answered her or the written question.
The next one wasn’t any easier.
"To restore the reputation of Catholic Charities again," read Fernandez to the crowd, "do you think all upper management should be replaced including the CEO?"
After another, but shorter silence, he answered.
"Maybe," he said. "Maybe all of us."
What he meant became clearer after the next written employee question.
"The problems with Catholic Charities are in upper management and administration," Fernandez read out loud, continuing, "what will be done to fix it?"
His reply became a repeated refrain during the rest of the meeting.
"This is not finance and this is not program, this is all of us," he said, seeming to imply that the charity’s issues were the fault of the entire nonprofit.
"I don't think the problem is upper management," he continued. "I don't think the problems are the programs."
"I think that what it is, is that we have to get better. We need to have more quality, we need to have better people here."
Still, many employee questions had a similar tone:
- "A lot of the staff has lost faith in your ability to lead the agency. Why does the board... not see what the staff sees?"
- "We’re still held responsible for the screw-ups in finance. Why has no one taken responsibility?"
- "Employees don’t know what is going on. How are we transparent, and we don’t know?"
- "Why do the board and the archdiocese not say anything about what is going on?"
At one point Fernandez recommended that staff trust and talk with their supervisors to problem-solve and allay fears.
At that point, a charity supervisor attending the meeting interjected. She described a culture of fear and retaliation for employees 'speaking up'.
"Then they go to HR (human resources)," she said in part, "and it just becomes an uncomfortable situation for them, it becomes a hostile work environment for them."
She added: "So where’s our protection in a sense for not getting retaliated on, because I see it happen."
During the meeting there seemed to be one question that in one form or another kept coming up: Why not face the cameras in an interview with the Defenders?
Once again, Fernandez said it wasn’t his call.
"It was a decision that was made by the board not to go public to KSAT," he said.
However, we did once again ask Catholic Charities of San Antonio for an on-camera interview for this story, along with asking about the claims made by Fernandez about United Way’s funding and the counting method used at Catholic Charities in Galveston-Houston. A Catholic Charities of San Antonio spokeswoman sent us the following statement:
Over the past two years, Catholic Charities has experienced reduced funding to our agencies, along with other non-profits. In addition, we have purchased and implemented software to improve data collection and reporting. We have also consulted other Catholic Charities agencies for guidance on this issue. We respect and protect the privacy of our partners. Catholic Charities values the contributions and support of our partners and we keep that information confidential.
Finally, during the meeting, Fernandez did have this reassurance for his employees: "I am always there for you. And again, if I'm not there for you and you don't tell me, it's on you."