EXCLUSIVE: Michigan launches investigation of health dept. programs
The Michigan Department of Community Health has launched an “internal investigation,” a department spokesperson tells The American Independent.
The revelation of the investigation came in response to questions submitted by TAI about the the department’s 2010 decision to reduce federal AIDS funding distributed to Wellness AIDS Services, a non-profit organization in Flint that provides services to people living with HIV. The funding was largely restored earlier this year.
“Currently, there is an internal investigation being conducted at MDCH which makes answering the majority of your questions not possible at this time,” wrote department spokesperson Angela Minicuci in an email to TAI. Minicuci declined to provide any additional information about the investigation, and it is unclear whether it involves the Wellness funding specifically or some other issue.
According to department official Patrick Yankee, the July 2010 decision to reduce Wellness’ funding and to cut the organization’s contract period from one year to six months was made by Amna Osman, the director of MDCH’s Division of Health, Wellness and Disease Control. One of Osman’s responsibilities is to oversee the state’s response to HIV, which is conducted by the department’s HIV/AIDS Prevention and Intervention Section (HAPIS).
Prior to joining MDCH on September 8, 2008, Osman served as the executive director of Wellness.
MDCH declined make Osman available to answer questions.
In an email to TAI, Yankee cited several reasons for Osman’s decision to reduce Wellness’ funding, including staff turnover, financial management issues, and the findings of an independent audit of Wellness by the accounting firm Yeo & Yeo.
That audit covered the fiscal year ending September 30, 2008, and identified four areas of concern, according to a February 2010 letter written by Debra Hallenbeck, manager of the Quality Assurance and Review Section of MDCH. The letter indicated the state concurred with the findings of the audit.
Those issues were as follows:
Expenditures that were not incurred at 9/30/08 were recorded as expenditures at 9/30/08. These expenditures were reported to the State of Michigan on the FSR and were reimbursed to the Organization, resulting in questioned costs of $16,921. According to management’s response, the organization amended the final FSR and resubmitted to the State of Michigan.
During the testing of forty disbursements, three transactions did not have any support documentation for the expenditures. All three transactions were paid by bank debit card. This finding resulted in questioned costs of $1,333. According to management’s response, the Organization no longer has the bank debit card and a petty cash policy has been put in place.
Payroll was charged to the grant based on a budget. The majority of individuals are charged to the grant 100 percent but time records did not indicate the individual worked on the grant 100 percent, nor were there time records denoting time spent working on the grant for individuals charged less than 100 percent to the grant. According to management’s response, management will require employees to keep proper time records to ensure time spent on the grant is documented.
Expenditures are being allocated and charged to grant based on a budget. Non direct expenditures are not being allocated to grants based on an indirect cost rate or allocation method. According to management’s response, the accountant will use a rate based on the number of FTE’s charged to each grant for allocating expenditures applicable to multiple grants.
As a result of those findings, Wellness AIDS Services repaid the questioned $16,921 through grant reductions in the following fiscal year. The $1,333 was repaid to the state by check.
“Any time an agency has an independent audit finding that shows ‘mis-charged dollars’ it can indicate a lack of proper controls to manage resources,” wrote Yankee, who serves continuum of care unit manager at HAPIS, in response to a series of questions from TAI. “So, this finding played a role in the eyes of the HAPIS grants and contracts staff when making the recommendation to provide a six-month award.”
Osman’s tenure as executive director of Wellness overlapped with at least part of the time period covered by the audit, though it is unclear to what extent she was involved in the issues identified.
Minutes submitted by Osman detailing a July 21, 2008, Wellness board meeting indicate that she was on leave from the organization from June 1 to July 13 of that year, that she would be absent again for an overseas assignment between July 31 and September 2, and that her “official last day” with the organization would be September 15. The minutes also state that Osman told the board she was “willing to come in a completed [sic] the year end activities to ensure the agency ends the year with no disruption.” According to the minutes, “The board agreed that that would be a [sic] needed and good for the agency.”
A source close to Wellness says that Osman was largely absent from the organization after May 2008 due to professional and personal leaves of absence. According to the source, Osman assured the Wellness board that she would be engaged in wrapping up the fiscal year activities but that ultimately, Osman did not actually do that.
(TAI also obtained a version of the audit with similar wording that says it covered the fiscal year ending September 30, 2009 — a year after Osman left Wellness. Both Minicuci and the source close to Wellness confirmed to TAI that the version saying it covered the fiscal year ending September 30, 2008, is accurate, though neither was able to explain the discrepancy.)
Documents obtained by TAI show that in 2010, Yankee and the HAPIS staff raised the possibility of reducing Wellness’ contract period from one year to six months in response to the audit findings and other concerns. Still, they suggested leaving the bulk of Wellness’ federal HIV funding — known as Ryan White Part B – largely intact. But a separate document, titled, “Amna Recommendations,” indicates that Osman recommended cutting Wellness’ Part B funding in half — from $470,000 for the entire previous year to $117,500 for a six month contract.
In a July 19, 2010, letter to Stevi Atkins, Wellness’ current executive director, Osman announced the reduced funding and six-month contract period, writing:
“As you know from your July 14, 2010 meeting with Patrick Yankee, Continuum of Care Unit Manager, we are providing you with six months of funding for these important programs. We will extend this funding for an additional six months based upon: contract compliance; program performance; and, the outcome of a fiscal site review by staff from HAPIS that will allow us to determine if Wellness AIDS Services has sufficient capacity to handle federal and state resources.”
In his written responses to TAI last month, Yankee said there were never any program concerns in relation to Wellness.
“No specific program performance issues were noted, all concerns were in the administrative areas and these have been resolved,” Yankee wrote.
According to Yankee, an October 19, 2010, site review of the organization conducted by HAPIS staff found four areas in need of improvements.
Those finding were:
1. Inconsistent availability of written policies and procedures. Recommendation was to develop a written comprehensive accounting and internal control policy and procedure. Agency to submit written accounting and internal control policies and procedures to HAPIS by January 31, 2011.
2. Lack of full employee/supervisor signature on time sheets. Recommendation: Add place for employee /supervisor to sign to attest. Effective immediately (next payroll period).
3. Actual time and effort is not operating at optimum efficiency. Recommendation: make change to pay date to report actual costs.
4. Challenges in monitoring program and budget, many related to changes in administrative, program and accounting staff. Recommendation: continue to utilize improved systems to monitor cost and ensure consistency with approved budget. Proposed changes in costs or ANY changes in staff must be communicated clearly to DHWDC/HAPIS and approved in advance of making any changes. Budget and narratives should be adjusted and clearly labeled to reflect approved changes.
According to Yankee, in July 2011, the agency found continued concerns with how employee time was being charged to grants.
A subsequent site review was completed in December of 2011. According to Yankee, that review “indicated that the agency now has proper controls in place to demonstrate the capacity to administer federal resources” and resulted in the decision to restore Wellness’ funding.
Osman was not involved in the decision to restore the funding, say two sources who are closely involved in AIDS service organizations in the state and who requested anonymity for fear of retribution.
TAI has been asking MDCH for an opportunity to interview Osman face to face. On March 23, the department indicated such an interview could be scheduled. However, on March 26, Minicuci informed TAI that Osman would not be available.
“We’ve decided not to make Amna available for an interview at this time,” Minicuci wrote in an email to TAI. “If you’d like to send along questions, we’d be happy to answer them for you as always but we will not be arranging an interview.”
In response to this offer, TAI emailed a series of eight questions to Minicuci on March 26. TAI requested a response by March 27 at 5:00 p.m., but at 4:30 p.m. that day, Minicuci emailed to say the department would not meet that deadline.
The next morning, Minicuci emailed: “Being that your request is quite extensive, I’m doing all that I can to see what we’re able to help you with. Again, I apologize for the delay and will let you know as soon as I know more.”
At 11:30 a.m., Minicuci emailed back, writing in part: “Currently, there is an internal investigation being conducted at MDCH which makes answering the majority of your questions not possible at this time. Regarding the investigation, that is all I’m able to share with you.”
Read the primary sources
Photo: Documents detailing operations within the Michigan Department of Community Health, obtained by The American Independent (AMERICAN INDEPENDENT/Todd Heywood).