Dunbar Association's financial problems deeper than expected

The Post-Standard reported that the Dunbar Association, one of Syracuse’s oldest nonprofits serving the black community, has hired an accounting firm to audit its books after discovering its financial problems are even worse than it imagined.

A representative of Key Bank informed Dunbar last month it had maxed out its $10,000 line of credit and did not have enough money to pay its bills, said Steve Williams, chairman of Dunbar’s board of directors.

Williams said he and other board members did not know the severity of Dunbar’s financial situation until the bank official came to a board meeting Jan. 19.

“We started pulling back the layers on the onion .... and realized there was something wrong,” Williams said.

Dunbar will survive the crisis, the chairman said. The chance of Dunbar closing is “... very, very, very minimal,” he said.

Dunbar is examining all its programs, looking for potential cost savings, Williams said. Dunbar may have to cut some jobs, he said.

The association, founded 93 years ago, operates the Dunbar Center at 1453 S. State St. The organization provides a variety of services to children, families and senior citizens.

Dunbar has hired the Fust Charles Chambers accounting firm to do an audit which should be done in three weeks. It is also getting financial guidance from officials of the Syracuse Community Health Center.

“We realize now we need help and this isn’t something we can undertake ourselves,” Williams said. “We are committed to putting systems in place that will help Dunbar achieve sustainability.”

Dunbar’s financial problems came to light last year when the United Way cut off $200,000 in annual funding to the nonprofit because of concerns about its management.

Dunbar hired Julius Edwards as its new executive director last month. He replaced Louella Williams, a former Dunbar board president who became interim director a year ago after the previous director, Sharon Jack-Williams, left in a cost-saving move. (Steve Williams, Louella Williams and Sharon Jack-Williams are not related.)

Steve Williams said Louella Williams and Sharon Jack Williams consistently told the board spending cuts had been made to offset reductions in funding.

But the board discovered otherwise last month after the bank official’s visit.

“The deeper we looked, the more we found out it was more severe than we anticipated,” said Steve Williams, who added he does not know if the financial problems resulted from mismanagement or fraud. The audit may answer that question, he said.

Neither Louella Williams nor Sharon Jack-Williams could be reached for comment.

Dunbar incurred a budget deficit of about $23,000 in 2010, according to Williams. The financial results for 2011 are not available yet.

Reports filed with the IRS show Dunbar had deficits of $155,500 in 2009 and $50,051 in 2008.

Darla Chase, the vice chair of Dunbar’s board, said the organization is as vital to the community now as it was when it was founded.

“For every youth we have in that building participating in a program, that’s one teen that’s not on the street, hanging around on the corner, getting involved in the wrong things,” she said.

When Dunbar’s financial problems surfaced last year, many older Dunbar alumni rallied to support the nonprofit. They formed a group called “The Friends of Dunbar” dedicated to turning around the center.

Williams said the board has told that group of the latest financial setback.

“They were in shock as much as we were,” he said.

Dunbar continues to meet its payroll, but is not paying all its bills, he said. The nonprofit has been contacting creditors to explain the situation and asking for more time to catch up on its payments, he said.

Dunbar Association
Address: 1453 S. State St., Syracuse
Employees: 22
Purpose: A nonprofit that operates the Dunbar Center, a recreation center and human services agency providing after-school care, emergency food services and other programs for youth, families and senior citizens.
2010 budget: $1.1 million
People served annually: 5,000
History: Founded 93 years ago as a settlement house to help blacks migrating from the South.
Who is it named after? Paul Laurence Dunbar, one of the first African-Americans to gain national prominence as a poet. Born in 1872 in Dayton, Ohio, he was the son of ex-slaves who wrote short stories, novels, librettos, plays, songs, essays and poetry. His style encompassed two distinct voices – the standard English of the classical poet and the dialect of the turn-of-the-century black community in America.