CONCORD — A state probe of two Manchester charities found failings in financial oversight and misappropriation of funds following the suicide of a top officer in both organizations last September.
Relatives of Donny Guillemette, former CEO and president of CareGivers Inc., reported him missing on Sept. 11, just days after the Attorney General’s Charitable Trusts Unit (CTU) issued a subpoena to him and others in the organization for failing to file annual reports in 2015, 2016 and 2017.
With his disappearance, CTU immediately subpoenaed the organization’s bank records, authorities said. Guillemette’s body was discovered in Merrimack on Sept. 16.
On Friday, CTU revealed findings of its months-long investigation into the organization, which include misappropriation of money and failure on the part of the organization’s then-board of directors to oversee Guillemette and the charity’s finances.
“At CareGivers, only Mr. Guillemette opened the mail and accessed accounts in order to make transactions and review monthly statements,” CTU says in the report’s conclusion. “While directors did receive financial reports, those reports did not receive a sufficient level of scrutiny.”
When CTU conducted a physical inspection at CareGivers and examined Guillemette’s office in the wake of his disappearance, they found an organization in apparent disarray and evidence that the same might be true at another charity.
“Mr. Guillemette’s office contained unopened invoices and financial paperwork relating to a separate charitable organization, Danny’s Team. A subsequent review showed that Mr. Guillemette served as the treasurer of Danny’s Team and controlled its investment accounts,” the report says.
Danny’s Team, which is currently being dissolved, was created in 1989 to provide assistance to people living with disabilities, such as home and auto modifications. It raised money through sporting events such as golf tournaments, according to CTU.
“The boards of directors of CareGivers and Danny’s Team did not exercise adequate financial oversight,” authorities concluded.
CareGivers, which was taken over by New Hampshire Catholic Charities in November, matches frail elderly clients in the Manchester-Nashua area with volunteers who assist with tasks to help them continue to live independently.
Karen Carew, CPA, of Carew & Wells PLLC was hired to conduct forensic accounting.
“Ms. Carew’s work uncovered financial problems that CareGivers had suffered for years,” the CTU report says. “In an apparent attempt to address those financial issues, Mr. Guillemette supplemented CareGivers’ bank accounts by making unauthorized distributions from Danny’s Team funds. Mr. Guillemette also treated CareGivers’ and Danny’s Team accounts as his own, using them to pay personal expenses. Mr. Guillemette then produced financial reports for the CareGivers board of directors that inaccurately reflected its financial standing.”
According to the forensic accounting and examination of emails and financial statements, Carew found Guillemette made multiple transfers totaling $61,250 from Danny’s Fund to CareGivers between 2015 and 2018.
“Mr. Guillemette used his position as treasurer of Danny’s Team to make those transfers, all but $2,000 of which were not authorized by the Danny’s Team board,” the CTU report says.
Further, during this time Guillemette stopped paying bills at CareGivers, allowing accounts payable to increase. There were overdue bills, notices from landlords and creditors, and an invoice from the Internal Revenue Service for payroll taxes that were collected from workers but never forwarded to the IRS, the report says.
Where the money went
Some of CareGivers’ operating losses can be attributed to Guillemette using CareGivers’ funds as extensions of his personal accounts, the report says. While the full extent of how much money was misappropriated or diverted is unknown, according to the report, some of it is.
“From 2015 through 2017, CareGivers paid $16,615 to Rivier University, where Mr. Guillemette had been a graduate student, even though the board of directors never authorized any tuition reimbursement arrangement. He used the Capital One credit card for what is presumed to be a mix of business and personal expenses. He used the PayPal account for a mix of business and personal expenses totaling $18,535 in 2018. Email records show that Mr. Guillemette made many Amazon purchases paid from the CareGivers PayPal account and shipped to his residence. He used the People’s United checking account for a mix of business and personal expenses, and sought to set up an overdraft protection feature,” the report says.
In the end, Carew was unable to determine fully the financial position of CareGivers given the poor records keeping, discrepancies between internal reports and outside accounts, and Mr. Guillemette’s frequent use of CareGivers’ accounts for his own purposes, the report says.
Let it be a lesson
The Charitable Trust Unit says there are lessons for other organizations to be learned from the CareGivers and Danny’s Team fallout.
“Boards of directors at other New Hampshire charitable organizations may find this report instructive of what can go wrong and what steps can be taken to prevent this type of situation,” it says.
The CTU report enumerates the responsibilities of those charged with serving on the board of directors of any charity:
Directors should receive and review financial statements at each meeting that show categories of income, expense, and comparisons with the prior year and with budget.
Directors should participate in the development of an annual budget.
Directors should implement financial policies that deal with access to accounts, payment of bills, and handling of cash, all with an eye toward a division of responsibilities among more than one person.
The organization should create a culture that encourages director questions about its financial well-being.