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SEABHS scrutiny now includes CPSA
By Thelma Grimes/Wick Communications
The Arizona Attorney General's office is not the only agency investigating Southeastern Arizona Behavioral Health Services, Inc.'s (SEABHS) business practices.
Neal Cash, president of the Community Partnership of Southern Arizona Regional Behavioral Health Authority (CPSA), said if service changes are not implemented, SEABHS could lose public funding.
CPSA has not yet sent a "Letter of Cure" to SEABHS, but they have many concerns. Cash explained that a "Letter of Cure" would outline corrective measures SEABHS must take to continue receiving CPSA funding.
In the 2008-09 fiscal year, Cash said SEABHS received $35 million from CPSA.
If management of SEABHS operations does not improve, and in a worst-case scenario, the contract was not renewed, Cash said patients would have an alternative. Pantano Behavioral Health Services in Tucson is expanding, and Cash said CPSA is interested in bringing more of those services into communities such as Benson, Willcox, Nogales, Clifton, Safford and Sierra Vista.
If Pantano expands services, Cash said it would create competition for funding with SEABHS.
"SEABHS does receive a significant amount of money each year," Cash said. "We are concerned about the operations and services. We want to be assured that proper care is being provided."
Cash said CPSA has a say in how SEABHS handles the services and delivery of care, but despite concerns, does not have authority over decisions by the non-profit's governing board.
CPSA doesn't feel patients are at risk, Cash said, but has questioned staffing levels at the eight different facilities throughout Cochise, Graham, Greenlee and Santa Cruz counties. CPSA is also concerned about business operations, which has become the focus of an Attorney General's investigation.
Last month, the SEABHS board fired 14-year CEO Dana Johnson, who along with other employees has been named a suspect in the state's ongoing investigation.
The state authority has already indicted one SEABHS employee for allegedly embezzling $30,665 over a four-year period.
Johnson is being investigated for borrowing $150,000 and never repaying it.
Documents obtained by Wick Communications show that Johnson asked an executive committee for the loan in 2004.
Current board members Dick Hamilton and Bill Inman were on the executive committee that approved the original loan in April 2004. Other members of the committee included Walter Mares and Fren Lawson.
In an April 29, 2004 memorandum to the board, Johnson said she was requesting the board's approval for a short-term, fully secured loan for an "investment opportunity that is mutually beneficial."
"For me, I have a minimal risk opportunity that will supplement my income and eventual retirement," Johnson said. "For SEABHS, this is a fully-secured loan; contingency covered by life insurance, and at a significantly higher interest than the funds are currently earning."
A copy of the 2004 promissory note shows that Johnson agreed to make 36 monthly payments of $750, starting June 15, 2004.
The former CEO even agreed to pay a 5 percent fee if the payment was more than 10 days late.
The committee voted unanimously to approve the loan, but with little oversight from the governing board, third-party auditors found three years later that Johnson had made no payments.
It was at that point that Johnson asked the committee for an extension. Records showed that the committee approved the extension on Sept. 25, 2005. Hamilton, along with current board members Kathleen Kruger and Ann Morrison voted for the extension.
Morrison is Inman's wife. The couple represents the Clifton area.
In a Sept. 24, 2008, memorandum, Johnson said, "In April 2004, the board's executive committee approved a secured loan to me in the amount of $150,000. I am requesting that the term of this loan be extended through 2010, although it is my intention to pay down the principle balance, if not fully pay off this obligation well before that."
Similar to the 2004 promissory note, the September, 2008, agreement has Johnson promising to make monthly payments at a 6 percent interest, and a 990 form filed with the IRS in 2007 said she would put up her life insurance policy and pension as collateral.
However, documents show Johnson never followed through with her promise. The beneficiary named on her 401K plan is spouse Lee Dapper, and not SEABHS. Dapper is also listed as the beneficiary to the life insurance policy signed by Johnson on June 20, 2008.
Marcelino Varona Jr., a new board member, has been pushing for changes, and at the Dec. 9 board meeting called for the board to take action to protect the company if Johnson does not repay the full $150,000 with interest.
The board approved a measure for Legal Director Rose Weston to take the necessary steps to go to court if necessary.
CPSA has also raised concerns over the company's loaning Johnson money.
In Nov. 25, 2008 letter, Cash told Johnson the Arizona Department of Health Services (ADHS), Division of Behavioral Health Services, Office of Integrity had been alerted about the loan, and CPSA requested information on their behalf.
However, Cash said CPSA did not have the authority to require SEABHS to disclose the documents being requested.
ADHS asked that SEABHS provide all documentation regarding Johnson's loan from meeting minutes and promissory notes to the employee's background.
Roberto Rivera, of the ADHS Office of Program Integrity, said in November 2008, that they have concerns about the loan and with how it was reported to the IRS in the 2005 and 2006 990 forms.
An email sent to a SEABHS auditing board on Nov. 25, 2008, shows Johnson was not surprised by the ADHS inquiry.
"Hey folks. Well, here is 'the other shoe.' I have been expecting this for awhile," she said. "I am going to have a conversation with our attorney just to make sure we are indeed OK with this, as I expect we will have to be responding in some way so CPSA is Ok with this BHS. Goodness . . ."
With SEABHS expenditures coming under scrutiny from ADHS and the Attorney General's office, auditing costs for the agency are skyrocketing.
In an Oct. 29 report, SEABHS Controller of Finance Heriberto Contreras said the board was told at one point that auditing costs were around $300,000 in 2008-09. But after checking, Contreras found that the non-profit had paid the KLK accounting firm $499,343.29 between July 2008 and June 2009.
Contreras said there was some confusion as to how much SEABHS actually spent because KLK was listed in the accounts under two different names.
Last year, besides half a million in auditing fees, SEABHS spent $650,000 managing a 119-car vehicle fleet.
With a $17.9 million budget, the City of Benson spent $18,000 last year on a third-party audit that is required annually by law.
As the SEABHS board tries to move forward, hire a new CEO and get the company finances under control, there are still questions about how things got so out of control.
Varona, the former mayor of Nogales, and others involved with the investigation have said the problem has been a complete "lack of oversight" from the governing board on how Johnson was managing the non-profit that has grown into a 400-employee corporation.
Long-time board members such as Inman and Hamilton argue that the board should not micromanage, while Varona argues that it is the lack of management that has led to employees being named as suspects in criminal investigations, loans not being repaid and funding providers questioning SEABHS' ability to care for the mentally ill.
Besides Johnson's being named a suspect by the Attorney General and a former SEABHS employee being indicted for embezzlement, another employee is being investigated for vehicle fraud.
Benson Police Chief Paul Moncada confirmed last week that his department and the Nogales Police Department have assisted the Attorney General in investigating numerous employees.
Neal Cash, president of the Community Partnership of Southern Arizona Regional Behavioral Health Authority (CPSA), said if service changes are not implemented, SEABHS could lose public funding.
CPSA has not yet sent a "Letter of Cure" to SEABHS, but they have many concerns. Cash explained that a "Letter of Cure" would outline corrective measures SEABHS must take to continue receiving CPSA funding.
In the 2008-09 fiscal year, Cash said SEABHS received $35 million from CPSA.
If management of SEABHS operations does not improve, and in a worst-case scenario, the contract was not renewed, Cash said patients would have an alternative. Pantano Behavioral Health Services in Tucson is expanding, and Cash said CPSA is interested in bringing more of those services into communities such as Benson, Willcox, Nogales, Clifton, Safford and Sierra Vista.
If Pantano expands services, Cash said it would create competition for funding with SEABHS.
"SEABHS does receive a significant amount of money each year," Cash said. "We are concerned about the operations and services. We want to be assured that proper care is being provided."
Cash said CPSA has a say in how SEABHS handles the services and delivery of care, but despite concerns, does not have authority over decisions by the non-profit's governing board.
CPSA doesn't feel patients are at risk, Cash said, but has questioned staffing levels at the eight different facilities throughout Cochise, Graham, Greenlee and Santa Cruz counties. CPSA is also concerned about business operations, which has become the focus of an Attorney General's investigation.
Last month, the SEABHS board fired 14-year CEO Dana Johnson, who along with other employees has been named a suspect in the state's ongoing investigation.
The state authority has already indicted one SEABHS employee for allegedly embezzling $30,665 over a four-year period.
Johnson is being investigated for borrowing $150,000 and never repaying it.
Documents obtained by Wick Communications show that Johnson asked an executive committee for the loan in 2004.
Current board members Dick Hamilton and Bill Inman were on the executive committee that approved the original loan in April 2004. Other members of the committee included Walter Mares and Fren Lawson.
In an April 29, 2004 memorandum to the board, Johnson said she was requesting the board's approval for a short-term, fully secured loan for an "investment opportunity that is mutually beneficial."
"For me, I have a minimal risk opportunity that will supplement my income and eventual retirement," Johnson said. "For SEABHS, this is a fully-secured loan; contingency covered by life insurance, and at a significantly higher interest than the funds are currently earning."
A copy of the 2004 promissory note shows that Johnson agreed to make 36 monthly payments of $750, starting June 15, 2004.
The former CEO even agreed to pay a 5 percent fee if the payment was more than 10 days late.
The committee voted unanimously to approve the loan, but with little oversight from the governing board, third-party auditors found three years later that Johnson had made no payments.
It was at that point that Johnson asked the committee for an extension. Records showed that the committee approved the extension on Sept. 25, 2005. Hamilton, along with current board members Kathleen Kruger and Ann Morrison voted for the extension.
Morrison is Inman's wife. The couple represents the Clifton area.
In a Sept. 24, 2008, memorandum, Johnson said, "In April 2004, the board's executive committee approved a secured loan to me in the amount of $150,000. I am requesting that the term of this loan be extended through 2010, although it is my intention to pay down the principle balance, if not fully pay off this obligation well before that."
Similar to the 2004 promissory note, the September, 2008, agreement has Johnson promising to make monthly payments at a 6 percent interest, and a 990 form filed with the IRS in 2007 said she would put up her life insurance policy and pension as collateral.
However, documents show Johnson never followed through with her promise. The beneficiary named on her 401K plan is spouse Lee Dapper, and not SEABHS. Dapper is also listed as the beneficiary to the life insurance policy signed by Johnson on June 20, 2008.
Marcelino Varona Jr., a new board member, has been pushing for changes, and at the Dec. 9 board meeting called for the board to take action to protect the company if Johnson does not repay the full $150,000 with interest.
The board approved a measure for Legal Director Rose Weston to take the necessary steps to go to court if necessary.
CPSA has also raised concerns over the company's loaning Johnson money.
In Nov. 25, 2008 letter, Cash told Johnson the Arizona Department of Health Services (ADHS), Division of Behavioral Health Services, Office of Integrity had been alerted about the loan, and CPSA requested information on their behalf.
However, Cash said CPSA did not have the authority to require SEABHS to disclose the documents being requested.
ADHS asked that SEABHS provide all documentation regarding Johnson's loan from meeting minutes and promissory notes to the employee's background.
Roberto Rivera, of the ADHS Office of Program Integrity, said in November 2008, that they have concerns about the loan and with how it was reported to the IRS in the 2005 and 2006 990 forms.
An email sent to a SEABHS auditing board on Nov. 25, 2008, shows Johnson was not surprised by the ADHS inquiry.
"Hey folks. Well, here is 'the other shoe.' I have been expecting this for awhile," she said. "I am going to have a conversation with our attorney just to make sure we are indeed OK with this, as I expect we will have to be responding in some way so CPSA is Ok with this BHS. Goodness . . ."
With SEABHS expenditures coming under scrutiny from ADHS and the Attorney General's office, auditing costs for the agency are skyrocketing.
In an Oct. 29 report, SEABHS Controller of Finance Heriberto Contreras said the board was told at one point that auditing costs were around $300,000 in 2008-09. But after checking, Contreras found that the non-profit had paid the KLK accounting firm $499,343.29 between July 2008 and June 2009.
Contreras said there was some confusion as to how much SEABHS actually spent because KLK was listed in the accounts under two different names.
Last year, besides half a million in auditing fees, SEABHS spent $650,000 managing a 119-car vehicle fleet.
With a $17.9 million budget, the City of Benson spent $18,000 last year on a third-party audit that is required annually by law.
As the SEABHS board tries to move forward, hire a new CEO and get the company finances under control, there are still questions about how things got so out of control.
Varona, the former mayor of Nogales, and others involved with the investigation have said the problem has been a complete "lack of oversight" from the governing board on how Johnson was managing the non-profit that has grown into a 400-employee corporation.
Long-time board members such as Inman and Hamilton argue that the board should not micromanage, while Varona argues that it is the lack of management that has led to employees being named as suspects in criminal investigations, loans not being repaid and funding providers questioning SEABHS' ability to care for the mentally ill.
Besides Johnson's being named a suspect by the Attorney General and a former SEABHS employee being indicted for embezzlement, another employee is being investigated for vehicle fraud.
Benson Police Chief Paul Moncada confirmed last week that his department and the Nogales Police Department have assisted the Attorney General in investigating numerous employees.
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Reader Comments
The following are comments from the readers. In no way do they represent the view of willcoxrangenews.com.
M. Montminy wrote on Dec 24, 2009 10:24 AM:
" It is a shame that this has happened to Seabhs. Therapist and caseworkers and administrtors in Benson have had enough. It is hard to supply services when there isn't money or people there. A lot of good people with long work histories were let go. I don't think people understand how hard it is for clients to have thier therapist suddenly disappear.
Not to mention that a lot of good people who worked so hard were passed over for raises for three or more years. So they moved on to different jobs. It seems to me that the best people with the most years with Seabhs were let go. Just to help lift some of the financal burden. Being a consumer of Seabhs, I have to say I feel Like I have been let down. No therapist and very little casemanagement has taken its toll on many consumers. Shame on those people who would take away from those who need it the most! "
Not to mention that a lot of good people who worked so hard were passed over for raises for three or more years. So they moved on to different jobs. It seems to me that the best people with the most years with Seabhs were let go. Just to help lift some of the financal burden. Being a consumer of Seabhs, I have to say I feel Like I have been let down. No therapist and very little casemanagement has taken its toll on many consumers. Shame on those people who would take away from those who need it the most! "
Joe wrote on Dec 26, 2009 10:14 AM:
" Good people have been let go without giving a reason and unqualified people have been promoted to supervisors. SEABHS has probably just gotten too big and should be split up. Some rotten eggs have taken over and are doing a job on the agency. "
Phyllis Birch wrote on Dec 26, 2009 6:22 PM:
" Since my daughter has been involved with SEABHS I knew there was something wrong with this organization. I read an article that said it hasn't effected the patients. This is so wrong! I even called up Congress Woman's Giffiords office. The man that identified himself as Dan has stated "" I don't know if we can do anything because we are federal! Guess what, my daughter is disabled. I would like to know how much federal money they received. My daughter receives Medicare which is federal. I also heard Cochise County is the poorest County. Well, giving out $150,000.00 loans to the CEO could of help the patients of SEABHS! Mental Illness is a disease just like cancer, heart , kidney etc. . People with mental illness needs to be treated like a Human Being! "
al ronquillo wrote on Dec 27, 2009 2:20 PM:
" need to investigate practice at san manuel behavorial health agency lying to court clients to sign up for meetings which results to be treatments an a nurse putting addiction certificate on non addicts or healthy non users an losing employment possibly rest of life.hurting alot of people.district attorney knows,judges ,doctors,but know body does anthing about it. "
james keegan wrote on Dec 29, 2009 6:18 AM:
" " Good old corporal punishment would solve most "behavioral problems" more effectively, and exponentially less expensively, than medication or "therapy".
-----------------------------------
James keegan
flights to Melbourne "
-----------------------------------
James keegan
flights to Melbourne "
Upset and angry wrote on Feb 3, 2010 1:28 PM:
" My daughter was at the Puff in Benson, about 2 and a half years ago for substance abuse. The family believing that this was the best thing that could happen to my daughter. What a mistake! One day the staff decided to go out for a day to Sierra Vista, my daughter told the staff she did not feel well and did not want to go. I took some persuasion and my daughter gave. On the way over she didn't feel any better. The staff and clients got off at a fast food restaurant, where my daughter fainted and fell right on her face, causing severe bruising. My daughter and I went to visit her and took pictures of her face. We were so angry and the staff did not have the sense or dignity to call the family and let us know what happened. Not even an apology. We talked to several people at SEABHS, but this never went anywhere. Why didn't they listen to my daughter. My daughter was coming down from her usage, and that should have been taken seriously. Why couldn't a staff stay at the center with my daughter, if she wasn't feeling good. Was this outing more tor them (the staff)? We in trusted a loved one for care not for them to be careless. Seabhs should have compensated my daughter for the injuries sustained in that fall, to the extent that an employee from the fast food place, was the first one to offer aide to my daughter. Thanks so much SEABHS! Now that I have a computer I can post my complain for the public to see. I wish I would have had a computer back then. "
Independent wrote on Dec 23, 2009 2:22 PM: