AMHC fixes slowed by audit

Officials wait to see what went wrong

By REGGIE PONDER
Staff Writer

Sunday, October 25, 2009

Efforts by state mental health officials to get to the bottom of the fiscal meltdown at Albemarle Mental Health Center — and determine if any illegal activity occurred amid the mismanagement of the agency — will have to wait at least a couple more weeks.

The delay in the start of the “forensic accounting” requested by the AMHC Board in January is tied to slow completion of the 2008 audit of the troubled mental health management organization.

Mason Spruill, the accounting firm performing the audit, submitted a draft of the audit last month to the N.C. Local Government Commission. The LGC asked for additional information to be included in the audit, leaving the completion date now up in the air.

“It’s still in the draft stage,” Mark Van Sciver, a spokesman for the N.C. Department of Health and Human Services, said Friday. “We’re expecting it but they’re still working on it.”

Van Sciver said it would be at least a couple more weeks before the audit was finished.

The department’s Division of Mental Health, Developmental Disabilities and Substance Abuse Services has been in a “caretaker” management role over mental health services in the 10 Albemarle counties since the AMHC Board turned the operation over to state officials in January.

The board took the extreme step in the wake of a scalding state review that declared the LME (local management entity) essentially broke and found AMHC administration had misled the board.

AMHC in Decembers announced it would lay off some 80 employees and discontinue “direct services” to about three thousand people in the 10-county area.

During the first week of January the board fired Charles Franklin, AMHC’s longtime director, and the following week the same board relinquished its own authority over AMHC and turned the organization over to state mental health officials to manage it for an unspecified period of time until finances and services were stabilized.

Although state officials made some progress in paying debts — about $1 million in all — to provide service providers, the agency remained in turmoil throughout the first half of this year.

In July, New Bern-based East Carolina Behavioral Heath began managing the Albemarle counties — Pasquotank, Perquimans, Chowan, Camden, Currituck, Dare, Washington, Hyde, Tyrrell and Martin — on behalf of the state. The counties are expected to make a decision in the next few months regarding the shape that mental health service management will take in the region beginning in July 2010.

Meanwhile, local officials are still waiting on state officials to conduct the forensic accounting and determine just what went wrong with AMHC’s finances.

The state officials, for their part, are waiting on the completion of the 2008 AMHC audit.

Dick Oliver, the DMH employee who for a time earlier this year served as “caretaker director” of the struggling AMHC, told Camden County officials at a planning retreat in April that misuse of Medicaid funds under the previous administration might warrant a criminal investigation. Oliver was responding to a question from Camden Commissioner Mike McLain.

But Oliver explained at that time that AMHC was still waiting on the regular audit for the previous year.

McLain asked if the State Bureau of Investigation or anyone else was conducting a criminal investigation.

Oliver explained there might be a criminal investigation if the district attorney is interested. There’s concern about apparent misuse of Medicaid funds, Oliver said.

He said it would be up to the district attorney to ask for a criminal investigation and that no decision was likely until the audit was completed.

In a memo last month to county managers in the AMHC region, State Division of Mental Health Director Leza Wainwright indicated her office still plans to forward the completed audit to the state auditor and the Attorney General’s Office. All agencies that might investigate financial mismanagement at AMHC “have said that they would require the 2008 audit as a starting point for any work or investigation,” according to Wainwright’s memo.

While it remains to be determined whether any laws were violated, Wainwright has indicated to the county manager that some funds clearly were handled badly.

The state also is changing accounting firms for the 2009 audit. Martin Starnes and Associates of Hickory will conduct the audit of this year’s books.