At an hour-long “town hall meeting” at this week’s National Association of Addiction Treatment Providers (NAATP) annual conference in San Antonio, NAATP board chair Cathy Palm and the organization’s attorney answered questions from dozens of association members about circumstances surrounding the March 31 suspension and subsequent firing of longtime NAATP President and CEO Ronald J. Hunsicker, DMin, for misappropriation of some $500,000 of the organization’s funds over a five-year period.
In an opening statement at the session, Palm asked the group’s first, and obvious, question, saying, “What did Ron do?” and answered, “He made NAATP payments on credit cards for personal expenses that were recorded as business expenses.” She explained that payments were made on amounts charged to “in excess of 20 credit cards associated with NAATP” that, according to the Pennsylvania Attorney General’s office, “had been extensively used over a several-year period for what appeared to be both personal and business charges.” The NAATP board had never authorized the CEO’s use of a corporate credit card, said Palm, executive director of Tully Hill Corporation in New York.
As to how the misappropriations could have occurred, Palm stated, “NAATP’s books are on a cash basis and that’s how he could do it. The activity was off-balance sheet. We’re talking about credit cards over here—not authorized by NAATP—and cash statements recording activity over here. The payments were then charged to business expenses. So, when we saw financial statements and saw business expenses allocated there ... they never got out of line with what our budget was. There was nothing glaring for us at one time.”
Hunsicker was hired in 1997 as NAATP president and CEO at a time when Palm says the organization “was nearly defunct” and “running on a shoestring.” At the time, she says that “Ron ran the business out of his basement and did everything,” including maintaining financial records. Because of the dollar amount of NAATP’s budget, Palm says audits weren’t required. Instead, the board relied on regular compilations of financial information, subject to the opinion of an auditor, but not to a detailed auditing procedure. This changed around 2009, when board members asked whether internal NAATP staff could take over financial management responsibilities to free Hunsicker to devote more time to NAATP’s growing membership. Following a training period, that’s what happened.
Palm said that until early 2010, few had reason to doubt Hunsicker’s abilities. “As board members rotated in and out, they came to see Ron as a guy who was pretty accomplished and getting things done. So, we did trust him,” she said. But she acknowledged that she and predecessor board members “had a responsibility to put in place internal controls to prevent bad things from happening. The board takes responsibility—we didn’t do that. We are a group of volunteers who meet three times per year, including this conference, and it was our mistake.”
In a communication sent to NAATP members on May 17 to explain the board’s decision the previous week to fire Hunsicker, Palm stated that NAATP is entering into an “Assurance of Voluntary Compliance” with the state Attorney General’s office “that will acknowledge that, due to the level of trust that existed, there were inadequate internal controls in place. It will also document our commitments to remedy the situation.”
The communication adds that the Attorney General’s office also had initiated a look into NAATP’s attempt to establish a nonprofit foundation, but that this effort was “easily explained to the Attorney General.” The Attorney General’s office has never officially confirmed publicly the existence of an investigation into NAATP, and it remains unknown as to whether it will pursue any official action on the matter.
Timeline of events
According to Palm, the trust that existed between Hunsicker and the NAATP board was shattered this Jan. 26, when Palm received a call from the Attorney General’s office stating that for a year it had been investigating possible financial irregularities at NAATP. Palm said she asked for a written summary, which arrived on Feb. 3. The next day, she brought in accountants and launched an internal investigation. On Feb. 13, she brought in outside legal counsel Nancy Armatas and convened a series of executive committee and board meetings that culminated in Hunsicker’s March 31 suspension, she said. As the investigation detailed the amount and circumstances involved, the board made the decision to fire Hunsicker.
Armatas, a Chicago-based attorney specializing in healthcare and substance abuse work, explained that the board’s primary goal is to get “restitution in full” from Hunsicker. “We believe that the assets exist,” she said. “We will pursue it as long as it takes. It will be a long process and there’s no guarantee that we will get all of the funds, but we are pursuing it.”