Jun 30

Written by: reh
6/30/2008

June 30, 2008, Monday

10:00AM Jessica arrived in anticipation of our meeting with Sigfredo. We reviewed several historical facts, dates and details. Called Fernando for confirmation of a few items. The whole story:
At the very start Roxana did not understand the management function of an accountant. She was insulted by Sigfredo’s prying. On his part, by virtue of his position as a “Licencia” from Teguci, Sigfredo’s approach was pretty heavy handed. We hired Fernando who is also an accountant who studied in Teguci. Things improved but Sigfredo continued to beat the drums of probable corruption that he is trying to save us from. The original agreement with Sigfredo was that he provide two weeks of accounting services per month for $350 per month. This accounting service would include enough time in Valle District to assure that materials moved as per our management system and that all accounting is accurate and complete. With Fernando’s arrival, Sigfredo (and his very capable assistant, Cristobal) spent less and less time in Valle District and actually quit conducting on-site inspections. All of Sigfredo’s correspondence continued to carry that edge of suspicion even though Fernando could document all transactions and Sigfredo never did on-site inspections.

I came to understand that Sigfredo works with several US companies with Honduras interests. Most of these companies have a very marginal US presence in Honduras. By causing doubts within the US organization about the competence or integrity of the Honduras staff, Sigfredo increases his influence and billable hours while actually doing very little. As Fernando got his feet on the ground, our need for Sigredo decreased. His ’07 audit letter (as full of disqualifiers and lacking in supporting documentation as it was) marked the time for going our separate ways. By this time, Sigfredo had quit receiving calls from Jessica and Fernando and only communicated with me on a limited bases. I believe this was his attempt to demonstrate his aloofness to our staff and his importance to us. It didn’t work. By this time (late ’07) I was spending much more time in Valle District evaluating the Program than Sigfredo was and knew his stated concerns had no bases in actual observations or data. Before my February ’08 visit, I sent an email to Sigfredo stating that I would be in country and that we would set up a meeting with him once my schedule was settled. Both Fernando and Jessica tried to call Sigfredo; he would not return their calls. When I got in country, I called and left a message; no return call. I assumed he had gotten tired of fooling with us and moved on; I went on about my business.

In late April, I received an email from Sigfredo stating that he thinks Fernando’s conduct is similar to Roxana (where the observations came from, I don’t know as neither Sigfredo nor Cristobal had visited Valle District since January and had not toured our Project since October, ’07). Then, in May, I received a very stern demand for 6 month’s pay.

Back to today’s meeting:
11:45AM Sigfredo arrived; a few minutes of small talk. Then I explained to Sigfredo that, prior to my February visit, each of us (Fernando, Jessica, and I) had tried to call him but he didn’t respond; I knew he was not happy with our management system and assumed he had moved on. At that time I wanted to discuss his involvement as an outside auditor to review our books every six months as Fernando can take care of the month-end books. I did not understand the email of May and would like him to explain what services he has provided this year that we should pay for. He said he had never been notified and had been available so we owed him the money and he was sure any lawyer would agree with him. I said I was very disappointed and concerned to hear talk of a lawyers, that we would each spend more on lawyers than his claim is worth and that I am confident that we would prevail. Sigfredo said “Oh, I would never call a lawyer; I just wanted to make a point.” I said “OK, tell me what I would be paying for?” After a few minutes of both making indefinite and general statements, I said “Sigfredo, some of the confusion is mine but you did no work. I will offer $350 to get us up to date and put all of this behind us.” Sigfredo said “That’s ok if I continue as the independent auditor.” I said “We must separate the two issues. First we must get your email and the past behind us. If we settle in good faith, I will talk with our Executive Committee about the future; I can promise nothing”. Sigfredo: “With no promise of future work I would need at least 2 month’s pay ($700)”. Me: “Sigfredo, I consider any amount up to $500 as a good faith settlement and would ask the Exec Committee to consider future work. Anything over $500, I would consider bad faith and the door to future work will be closed. Sigfredo: “$500 is acceptable”. Me: “I will have Fernando write a check for $500 and a letter stating that your account is paid in full and that you have no further claims against L4L. If I am not in Honduras, Jessica will arrange to deliver the letter for your signature and that check for $500. We will complete this transaction before the end of July.” Meeting adjourned.

1:45PM Dr Avila called, gave his apologies and asked if we could meet at 4:00PM.

4:00PM Dr. Avila and I discussed the lunch program. He made some calls and said he expects we will have a meeting with the UN Thursday morning. I should get a call tomorrow. Adjourned to the bar. Dr. Avila is a true advocate for L4L and is a well respected, influential person; our relationship with him will produce positive results in it’s own time.

6:00PM End of day.

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