The Texas Department of State Health Services (DSHS) released a draft report on June 11 listing 28 findings and recommendations after investigating the STAR Council on Substance Abuse.
The STAR Council serves 18 area counties including Somervell, with offices in Erath and Hood.
The 25-page report, obtained through an open records request, “was limited to issues of financial compliance only,” from fiscal years 2004-08.
A letter from Gary Payne, CPA and unit manager of contract oversight and support for DSHS, to STAR Executive Director Duane Booker said the fiscal compliance review report was initiated after the department received complaints about board governance and management practices. Payne summarized the report stating, “Board Governance during the period reviewed was ineffectual in providing oversight of management and operations of STAR Council.”
He went on to say, “Management appeared to operate unregulated by Board oversight.”
The result, according to the letter, was numerous occurrences of non-compliance with DSHS contract requirements and $315,365.13 in questionable expenses paid through grant funds. If the agency cannot provide supporting documentation for the costs, STAR might be forced to refund $164,359.83 to the state.
The board and STAR Council management have until Sept. 9 to respond to the report.
The findings and allegations stem from the time period when Danny Boitnott served as STAR Council’s executive director. Boitnott served as the executive director from March 2001-August 2008, when he resigned and moved to Commerce.
Findings one through four of the report focused on the board and its members. Among the allegations were that three board members were dismissed “for no stated reason. The common attribute shared by these three members was requesting information and explanations from STAR Council management regarding management practices and operations of STAR Council,” the report states.
One of those members was Tony Mobly.
Mobly said he was a board member from January 2006 to May 2007.
“I was voted off the board when I started raising questions about financial activity,” Mobly said.
One of his concerns was the fact that Boitnott’s signature was the only one required to move money - a point DSHS took notice of as well, even referencing a $100,000 electronic transfer in 2006.
Mobly said the non-profit organization ended up with approximately half a million in excess funds, and he wanted to know where it came from.
One finding points out that STAR’s general ledger and a May 2007 bank statement could not be reconciled and the ledger had more than $1,000 in excess funds.
Also in May 2007, a money market account in the amount of $1,000 was opened with Boitnott’s signature. According to the report, the money market account grew to $228,483.98 by March 2008.
Many employees also wanted to know and began asking questions about “falsified records.” He said the employees were being asked to double bill the state.
The idea goes back to unit rate contracts STAR had with DSHS, who funds the majority of the programs, according to STAR’s Web site www.starcouncil.org.
Mobly believes this is the cause behind the high turnover rate, documented by DSHS at 67 percent during the time reviewed. He said the percentage could be higher if they included employees who left during their initial 60-day probationary period.
A few of those employees took their concerns to the board. The DSHS report states a number of STAR employees filed grievances in March 2007 against Boitnott. But the policy regarding employee grievances against the executive director was changed before the March 7 meeting and the board only heard one of the grievances, citing the new policy.
One matter that complicated DSHS’ research was the fact that the board did not retain written material or minutes from these meetings. The report stated the current board chair, who was unnamed in the report, cited client and personnel confidentiality.
“DSHS has never noted occasions where specific client records subject to HIPPA requirements have been part of Board deliberations of any other DSHS sub-recipient contractors,” the report states.
Under Texas Open Meeting laws, personnel matters are to be discussed in executive session and are not part of public record.
The remaining findings deal with accounting irregularities or misused funds, including unallowable employee bonuses and patient incentives.
One finding states, “Unallowable fees are being charged to clients participating in treatment programs in certain instances (i.e.: re-admittance to program if previously discharged for unsatisfactory attendance).”
The report goes on to say the policy is not supported by state rules and recommends a refund to any clients that were over charged.
Many of the other findings listed in the report cite inadequate documentation of costs. If the proper documentation can be presented, the council might not have to repay DSHS.
In an August 2008 interview, Boitnott denied that the council was under investigation, stating he called the state himself to check out the allegations. At the time, he said his resignation came only after his wife received a new position that required the family to move.
During a telephone interview last week, Boitnott said he has heard about the report, but has not seen it.
“This is the continuing saga of one disgruntled (former) employee,” Boitnott said. “I’d bet money that 75 percent of this is going to be resolved.”
Boitnott’s replacement Duane Booker said the investigation would not distract the organization from their mission and focus.
“We are taking it very seriously,” Booker said. “We will respond in full and in detail.”
Booker said they are cooperating with DSHS and plan to continue in a professional, up front manner with total transparency.