But it won't release the money until the Hispanic Liaison can show that salaries are less than 25 percent of its annual budget.

Ilana Dubester, the Hispanic Liaison's executive director, said the decision is good news but problematic. The agency's annual audit for fiscal 2005-2006 won't take place until October, as it does every year. That means the group will have to go without $20,000 in United Way money until then, she said. The grant would have started July 1.

"We are going to see if there is any way to schedule [the audit] sooner," Dubester said.

In June, United Way officials denied the Hispanic Liaison's funding request. The agency, which is based in Siler City and helps Latinos integrate into Chatham County, has received money from the United Way for 11 years. Last year, the agency received $20,000, and this year it requested $23,000.

The group's founder and supporters claimed the United Way board was punishing the organization for participating in an immigrants' rights demonstration in April in Siler City and a national boycott May 1 that asked immigrants to take the day off from work and school to attend rallies.

United Way officials said the agency was denied funding because it was spending too much on salaries. The agency's administrative costs were listed as 36.5 percent of its annual budget. The United Way's threshold is 25 percent.

But in an e-mail message obtained last month by The News & Observer, United Way Executive Director Dina Reynolds wrote to a citizen that "members of our board and many of our donors are concerned about the recent political activism engaged in by the Hispanic Liaison.

"There were also concerns raised that encouraging illegal activities, such as keeping children away from school, should not be supported with United Way funds," Reynolds wrote in the message dated June 9. "Undoubtedly, these concerns weighed on the decision to deny funding the agency."

Dubester said she explained the administrative costs in the application to the United Way. She said two new managers -- an executive director and associate director -- had spent most of the year learning their jobs and less time raising money. Then the new executive director resigned, she said.

Since she stepped back in as director, Dubester said, administrative costs are down to 23.5 percent of this year's projected budget. She presented this information to the United Way board of directors in a special meeting July 14.

The board then voted to fund the Hispanic Liaison after it receives financial statements and an IRS tax form for the year ending June 30.

Board Chairman Eric Andrews did not return a message left on his cell phone Monday, but in a news release, he said if the Hispanic Liaison does not meet its projected administrative costs, the United Way will distribute the money to other member agencies that serve the Latino population.

"We would also assist the Hispanic Liaison staff and board in developing a plan to reduce their administrative costs so that they will qualify for funding next year," he said in the release.

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