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Saturday, March 15th, 2014

Health department to repay $240,000

State audit found problems with grant bookkeeping

By Shelley Grieshop
CELINA - The local health department must pay the state more than $240,000 for improperly handling six grants received in the past five years.
Services will not be cut, and no employee layoffs are expected, local officials said Friday after the release of a special investigative audit by the Ohio Department of Health. The amount owed will be paid from the approximately $400,000 in 2014 carryover funds, local officials said.
The initial amount owed by the Mercer County-Celina City Health Department was $271,132. However, the sum was reduced by $30,000 on Friday after the local agency provided documents proving a Child and Family Health Services Program grant was properly documented.
No criminal action is alleged by the state, and the money in question is accounted for.
Health department administrator Dale Palmer told the newspaper after the monthly board meeting Friday that he is sorry for the errors committed and recognizes the seriousness of the situation, which he blames on poor bookkeeping skills.
"These audit findings were based upon an agency, at that time, which lacked the necessary skilled financial staff that is necessary in today's business climate," he said. "We are sincerely remorseful to our community. However, today, this health district is one that is highly skilled and dedicated to serving and protecting the greater community."
The health department has 30 days to pay the full amount, which represents 17 percent of its annual $1.4 million budget. Officials said the action would leave a $55,000 balance at the end of the year. Palmer said beginning next year he may have to advance funds from other programs to cover deficiencies in the general fund.
The deadline to pay may be extended. Palmer plans to appeal the state's findings within the required 15-day deadline, he said.
"We know what the amount is," he told board members Friday. "Honestly, there's not a lot we're going to be able to reduce, but we'll do our best."
The ODH report said the errors were due to insufficient payroll documentation, time and activity records not tracked or reported, misclassification of expenditures, financial reports that didn't match general ledgers, service agreements not reflecting information for contractors hired during the H1N1 pandemic and outdated and deficient internal accounting control policies and procedures.
The health department, as part of the audit process, had already devised a correction plan that includes improvement of documentation for accountability of grant funds. A new software accounting program was installed last year, and the health department plans to use a Software Solutions program soon to be implemented by the county, Palmer said.
"There's no doubt we'll need our fiscal officer to keep closer eyes on the books," board president Dr. Ed Hosbach noted after Friday's meeting.
Hosbach said the grants in question - most related to the 2009 H1N1 (swine flu) pandemic - were awarded when staff members were busy with multiple tasks such as countywide immunizations and illness tracking. The H1N1 grants carried tight deadlines and strict guidelines, he said.
"Grants are a lot of work," Hosbach said. "It's a lesson learned."
Five of the grants in question were from the state's Public Health Emergency Preparedness program; the remaining one was a Child and Family Health Services Program.
Palmer said current and future grants will not be affected by the audit findings. A PHEP grant currently funds the full salary of registered nurse Deb Scheer, who is the director of emergency preparedness and the area epidemiologist.
Hosbach said he is confident the health department will regain good fiscal footing based on belt tightening the last two years.
The health department in April 2012 established a cost-cutting plan to battle losses of local government funding and failure of a 0.6-mill, countywide property tax levy in November 2011. The levy would have collected $530,274 annually or about half of the agency's budget.
The health department is funded by grants, fees for services and money from political subdivisions - villages, townships and the city of Celina. A member of each political subdivision is represented on the health department's district advisory council, which meets at 7 p.m. Monday.
The audit by ODH was prompted by findings of an audit released in September by the Inspector General's office. That audit was initiated by an anonymous tip about alleged wrongdoing by the local department. The IG's report accused the local health department of "wrongful acts or omissions" for H1N1 grant dollars received between 2009 and 2011.
The IG's office stated that some errors by the local department were due to money used before or after grant deadlines and unspent dollars kept as carryover instead of returned to the state.
The IG also berated ODH for inefficient practices in overseeing grant funds to local health departments.
An executive session was held to discuss personnel issues related to the audit, and the board members took no action.
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