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Thursday, September 26th, 2013

Report: Local health office mishandled funds

State also criticized for lax grant oversight

By Shelley Grieshop
CELINA - The Mercer County-Celina City Health Department is accused of "wrongful acts or omissions" involving nearly $170,000 in H1N1 grant dollars.
The funds awarded to the local agency between 2009 and 2011 are accounted for and no criminal allegations have been cited, according to the report completed earlier this week by the state Inspector General's Office.
It's unclear if the health department will face any consequences. Carl Enslen, an Ohio deputy inspector general, said the IG's office investigates and issues findings, not penalties.
"Our job is to find out if the money was justly spent," he said.
The IG's office sent the completed, 172-page report to officials at the Ohio Department of Health and the Centers for Disease Control and Prevention, which could take further action, he said.
"There's always that potential," Enslen said. "The federal government may credit the agency against future monies (grants). ... it could hurt the county's bond rating. The decision on what to do likely will come from the state auditor."
The IG's findings are based on an audit initiated in May 2011 after receiving an anonymous complaint, which involved the handling of several Public Health Emergency Preparedness and Public Health Emergency Response grants to be used mainly for preparation and response to the H1N1 pandemic.
The report accuses the local health department and its administrator, Dale Palmer, of excluding or improperly including grant expenditures in required budget reports to the state. Other allegations include improperly tracking employee hours linked to H1N1 work and purchasing equipment, services and other expenses not allowable under grant guidelines.
Palmer, who had not yet seen the IG's report this morning, told the newspaper he's certain the complaint was filed by a "disgruntled, ex-employee." However, he openly confessed errors were made.
"We readily admitted we made accounting errors," he said. "Our focus at the time was helping the community."
Palmer said the department lacked "fiscal infrastructure" such as financial software to properly code expenditures.
"We didn't put expenses in the right categories," he said, adding an improved system is now in place.
Palmer said the state gave local health departments "unrealistic timeframes to spend the money" and dubbed the 2009 H1N1 pandemic "trying times."
"We had five grants awarded to us in 18 months and they all had to be tracked separately," he said, noting the grants totaled $365,000. "We had a short window to expend the money ... all needed prior approval from the state."
During an interview with investigators in July 2012, Palmer said he wasn't 100 percent aware of the grant policies.
"Am I intimate with every aspect of this? Absolutely not," he said.
When he was told some of the funds weren't reported accurately, he replied, "Shame on us. No, that should not have been happening."
The IG's report stated that some of the money was used prior to the grant period or after it expired. Also, grant dollars unspent by the health department at the end of the designated period were kept as carryover and not returned to the state as required, according to the findings.
The anonymous complainant accused the health department of falsifying records, misusing or abusing state funds and failure to exercise adequate oversight of grant monies.
The complaint specifically accused Palmer of trying to hide carryover funds and said he once commented that ODH has only "six people overseeing 800-plus grants, and that he was sure they would just skim the surface and would not look into it any further."  
The complainant refused to document specific instances in writing "for fear of retribution," the report noted.
Mercer County Health Commissioner Dr. Philip Masser said the report will be reviewed by him, the health board and others "in great detail and make sure a process is in place to prevent this from happening again."
"I'm sure there were no intentional misuses of funds. We were just overwhelmed at the time," he said.
Masser said the agency is taking the matter seriously and will correct any issues that haven't already been addressed.
ODH also was reprimanded in the IG report for numerous shortcomings stemming from its failure to properly monitor how the grant money was spent. When questioned about the review of grant documents filed by the Mercer County health department, ODH Infectious Disease Control Consultant Viola Webber replied, "I don't really look at them very much. I really don't."
Several ODH officials interviewed during the investigation said budget constraints and change in management from 2009 through 2011 affected the frequency of on-site reviews. They also cited a lack of communication and knowledge of grant guidelines and objectives.
The IG report provided recommendations to ODH and requested they respond within 60 days with a plan that details its implementation.
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