The Washington Blade; Friday, February 21, 1997
Lou Chibbaro, Jr.

The latest, unaudited finance statement comes two months after an audited financial report for fiscal year 1996 showed NAPWA facing severe financial problems that forced the group to reduce its staff and cut back on some of its programs.

Cornelius Baker, NAPWA's executive director, attributed the improved financial picture for the first quarter of the current fiscal year -- which covers the period of Sept. 30, 1996, to Dec. 30, 1996 -- to overall "belt tightening" and improved financial management. Baker said the improvement also stems from agreements reached with various vendors, including the group's landlord, to renegotiate debts and expenses such as the rent for NAPWA's three-floor office suite in downtown D.C.

"We're a leaner organization," said Baker. "But we're still accomplishing the mission we've always set out to accomplish."

That mission, according to Baker and other officials at NAPWA, includes serving as the national advocate and provider of timely information for people with HIV and AIDS in the areas of drugs and treatment regimens, legal rights, government programs, and patient care.

Among NAPWA's most recent accomplishments, Baker said, is the publication of a comprehensive, easy-to-read handbook that guides people with HIV through the complexities of the newly released protease inhibitor drugs and combinations of those drugs. The handbook, "Do You Know Your Options? A Guide to Antiretroviral Therapies," by Dr. Richard Elion of George Washington University Medical Center, is distributed free to people with AIDS.

Last September, NAPWA disclosed that a 30 percent shortfall in revenues it had expected to gain from its wholly owned mail order pharmacy MedExpress led to a budget gap of more than $500,000. Baker said the group responded with changes that resulted in a net reduction in the NAPWA staff from 25 to 19 during the past year, including laying off one full-time employee, merging four full-time positions into two, and suspending indefinitely the filling of three vacant positions -- development director, grass roots outreach director, and community coordinator.

Baker said the MedExpress pharmacy reduced its staff from eight to five during that same period. MedExpress is operated by NAPWA Services Inc., a for-profit corporation wholly owned by NAPWA and located in the same suite of offices as NAPWA.

NAPWA created MedExpress in early 1995 as a means of providing mail order prescription drugs, vitamins, and food supplements to people with HIV at a cost competitive with or lower than that of most other commercial pharmacies. Baker and MedExpress officials were scrambling this week to file corporate papers after an inspection by the Washington Blade at the District's corporation office revealed that the D.C. Department of Consumer and Regulatory Affairs had revoked MedExpress's corporate charter on Sept. 9, 1996. City records show that the city revoked the charter after MedExpress failed to file a required annual report for two successive years and after it failed to respond to a warning notice that the city sent last August to the D.C. law firm Jenner and Block, which serves as MedExpress's corporate resident agent.

Department of Consumer and Regulatory Affairs official Robert Henry said NAPWA Services Inc., the corporate entity that does business as MedExpress, can reinstate its corporate charter as soon as the firm files the two required annual reports and pays $560 in fees, penalties, and interest. Henry said the city's revocation of the NAPWA Services/MedExpress corporate charter does not affect its ability to operate normally and legally as a business, but it does mean the firm is no longer a corporation and cannot take advantage of the legal benefits and protections associated with corporations until its corporate status is reinstated.

Baker said NAPWA and MedExpress officials planned to submit the required papers and payments this week. He said the city sent out notices last year announcing the annual report requirements had changed from an annual filing to a filing once every two years. But the city suddenly canceled those changes, creating confusion at a time when NAPWA's staff was in a period of transition, Baker said. He said neither NAPWA nor MedExpress received any notice from the city disclosing that the MedExpress corporate charter was about to be revoked.

"Some of the administrative matters in the past have not been handled well," said Baker, in discussing the operation of MedExpress. He said NAPWA has arranged for an audit of MedExpress, which is scheduled to be completed in April.

"We're going to get to the bottom of this right now, and we're going to fix this," he said.

Baker said MedExpress filled more than 30,000 requests for drugs and vitamins for people with HIV during the past year. According to Baker, MedExpress does not subsidize the cost of such drugs, and that persons using the mail order pharmacy must pay for the drugs themselves or arrange for their health insurance carrier to pay for them. Baker said many people with HIV living in rural areas prefer using a mail order pharmacy such as MedExpress rather than ordering AIDS related drugs face-to-face in their hometown pharmacies, where they fear public disclosure of their HIV status.

The latest finance report for NAPWA shows a significant improvement for NAPWA compared to the earlier, audited report for fiscal year 1996.

The latest statement, covering the period from Sept. 30, 1996, to Dec. 30, 1996, shows that NAPWA's income for the period was $490,316. The statement shows the group's operating expenses were $400,987, creating a surplus for the quarter of slightly more than $89,000. David Spear, NAPWA's director of finance, said the surplus was due to the receipt of a grant one month sooner than expected. He said that when the grant is accounted for, the first quarter income came in "slightly above" the quarter's expenses, a development, said Spear, that NAPWA views as a significant improvement over the large deficits the group generated during the previous fiscal year.

The audited 1996 report, prepared by the accounting firm Haymaker Berry Group, shows that as of last Sept. 30, NAPWA had "total current liabilities" of $278,894 compared to "total current assets" of $12,839. Total current liabilities represent debts due to be paid in full within 90 days.

Baker said NAPWA has since renegotiated its "accounts payable" debts, averting any danger that creditors would force the group into bankruptcy.

But NAPWA's financial situation, as of late summer and early fall, put the group at risk of financial collapse and prompted discussion among the NAPWA board about the possibility of folding the group.

Baker said the board, staff, and NAPWA supporters from around the country decided NAPWA's mission and its record of accomplishment since its founding in 1983 was too important and that every effort should be made to keep the group from going out of business. He said the board responded by taking a number of rapid steps, including adding new people to its ranks, including Jim Graham, executive director of D.C.'s Whitman-Walker Clinic, who will serve as the chairperson of the NAPWA board. Baker said the board and staff put into place tighter financial controls, cut back on some programs, and took immediate steps to restructure NAPWA's debt.

NAPWA's fiscal year 1997 budget calls for spending $1,529,893 on the group's programs and projects. It calls for raising slightly more than that amount through government and private grants and contracts and private contributions. The budget calls for NAPWA to generate additional revenue from special events, publications, honoraria, and consulting.

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