February 25, 2008

NC wastes millions in mental health reform

Once again news about North Carolina highlights that millions are being wasted by the state - this time in mental health reform. Dempsey Benton, the new leader of the state's department of Health and Human Services, is making an effort to reduce costs and waste but the state has already wasted at least $400 million attempting to treat more mentally ill people in their communities and fewer in the state's four psychiatric hospitals.

Once again this has taken place during Governor Easley's watch as recently seen with other political appointees made by Easley committing major and costly blunders while managing DOT, DMV and other state divisions. Changes in mental health treatment during the time of another of Governor Easley's appointees, Hooker Odom, former leader of DHHS, allowed practices to be put in place that has allowed millions to be wasted by questionable providers providing questionable services for mentally ill patients with virtually no specific controls over services provided. Even with much finger pointing between Easley and various state representatives trying to shift blame to each other, poorly planned changes were made during Easley's administration with insufficient controls and procedures to insure funds are spent for needed treatments and valid services and paid to legitimate providers.

Department officials defined too loosely the community support services companies would offer, and they agreed to pay too much for it according to a news report. Responsibility for enacting the changes fell to Health and Human Services, led for six years by Carmen Hooker Odom, Gov. Mike Easley's appointee. They didn't think through all the details of providing adequate services for mentally ill patients and were overwhelmed by the task and still are. Hooker Odom announced her resignation from DHHS last May, two weeks after informing Easley about what she called a "deeply disturbing" audit of mental-health providers.

News and Observer
February 24, 2008
The Associated Press

State wastes millions in mental-health reform

RALEIGH, N.C. - North Carolina has wasted at least $400 million in its efforts to treat more mentally ill people in their own communities and fewer in the state's four psychiatric hospitals, The News & Observer of Raleigh reported Sunday.

An investigation by the newspaper showed that local governments, forced to stop offering treatment, were replaced by providers trying to make money, using mostly high school graduates instead of licensed professionals. In a few months, the cost of the community support program was $50 million a month, more than 10 times what the state had expected.

Providers took some clients to movies or shopping, charging taxpayers $61 an hour, according to the newspaper's investigation. Meanwhile, some seriously ill people went without treatment.

It was almost a year before the state reacted.

Hundreds of providers have abused the system, the state now says. Read more...

February 7, 2008

Fire LyndoTippett - It's time for him to go

North Carolina's DOT has found itself behind the bulls eye once again after a new state auditor's report reveals that the department has incurred additional costs on behalf of NC taxpayers to the tune of an extra $152 million over the last three years on 390 completed projects. The extra costs are related to mismanagement, poor planning and because of schedule changes, environmental reviews and design changes. The report states that 73 percent of those projects missed their projected construction starts. Forty percent of the projects missed that mark by more than a full year.

According to Les Merritt, NC's State Auditor, "DOT is a multi-billion dollar state agency that appears to operate on hunches and intuition rather than hard data analysis. As a result, taxpayers paid $152.4 million in unnecessary construction costs."

Merritt's report indicated that the auditors found that DOT does not track or analyze delays or successes in its road-building projects, despite repeated warnings and recommendations during the past 10 years from auditors and consultants. The auditors also said that if the department had an effective system for tracking performance, officials might have seen that delays cost taxpayers over $150 million.

"The lack of performance management practices has been pointed out to DOT before," the auditors wrote.

As expected, DOT officials are disputing the findings rather than admitting they happened and are not focusing on working toward solutions. Debbie Barbour, director of preconstruction for the department, claims engineers have only a rough guess of how long a project will take when funding is approved and says the detailed engineering has not been done up front (as it should be). She states that since the engineering work has been done at approval time, the estimated completion date can't take into account problems along the way. She also argues that environmental problems, obtaining permits and other issues are out of control of the department and says it is unfair to say projects are late because of those and other issues.

Signs continue to surface that the DOT is a poorly managed organization and unacceptable practices from the top down cause virtually everything DOT touches to be poorly done, to introduce avoidable significant problems and delays into projects and to cause taxpayers to pay more for substandard work that does not meet growing needs of the state.

It's time for Governor Easley, who takes much of his direction from his staff of buddies that help him make unwise choices and appointments of "good old boys" to state leadership positions, to realize the severity of problems in DOT and other state organizations and fire top leaders like Lyndo Tippett and mid-level management people like Debbie Barbour and at least make a feeble effort to re-establish a little control and get something for the billions of dollars spent on roads and projects while he is still in office.

Read the full article about findings in the study...

News and Observer
February 7, 2008
Dan Kane and Benjamine Niolet, Staff Writers
Delayed road projects cost millions

An audit of three years of completed state Transportation Department projects found many of them finished behind schedule, leading to what auditors say is an additional $150 million in inflation-related construction costs.

"DOT is a multi-billion dollar state agency that appears to operate on hunches and intuition rather than hard data analysis," State Auditor Les Merritt said. "As a result, taxpayers paid $152.4 million in unnecessary construction costs."

The 43-page audit released today looked at 390 highway projects completed between April 2004 and March 2007. Auditors said that 73 percent of those projects missed their projected construction starts. Forty percent of the projects missed that mark by more than a full year, Merritt said.

The audit said that the permitting process, environmental reviews and design changes caused many of the delays.

Department officials say the auditors held the department to an unfair standard. The $150 million figure is oversimplified and doesn't account for some $80 million the department saved by expediting projects within the same time frame.

The auditors based a project's start date and projected completion date on when the transportation board approved money for preliminary engineering. The problem with that method, said Debbie Barbour, director of preconstruction for the department, is that engineers have at that time only a rough guess over how long a project will take. Since no engineering work has been done, the estimated completion date can't take into account problems along the way.

"In developing a project, there are certain things that are outside the department's control, such as obtaining an environmental permit," Barbour said. "We don't really have control of the time frame on every activity in the approval process."

The auditors found that the department does not track or analyze delays or successes in its road-building projects, despite repeated warnings and recommendations during the past 10 years from auditors and consultants. The auditors said that if the department had an effective system for tracking performance, officials might have seen that delays cost taxpayers $150 million.

"The lack of performance management practices has been pointed out to DOT before," the auditors wrote.

But department officials say the department has implemented several new programs and processes since 2001 that wouldn't have been evident in the time period the auditors examined. The department has worked with the state Department of Environment and Natural Resources to streamline environmental permitting. The department measures whether it met target dates for acquiring property for a project or opening bids.

And the department has spent $3.6 million to hire a consultant to help officials change the way the department does business.

Bill Rosser, the state highway administrator said that the department works hard to finish projects on time, but road building is a complex and expensive business. Rosser said if the auditors looked at a newer set of projects, the findings would be much different.

"We would like to be responsive and deliver our projects," Rosser said. "We're always looking at the way the process works." Original source ...

February 3, 2008

NC's poor roads tied to bad politics, poor management and Governor Easley's bad choices

News continues to flow regarding North Carolina DOT's inability to solve major funding issues and failure to avoid major problems providing safe and adequate roads for the state. Under the leadership of Governor Easley's appointee, Lyndo Tippett, the organization continues business as usual with more of the same after promising to get advice from a consulting firm to help solve internal problems.

News broke in late January about another costly failure on the new I-795 between Wilson and Goldsboro rivaling the botched I-40 scandal that cost taxpayers some $22 million to repair in 2007. The new I-795 road is crumbling under weight of traffic after only two years of service and will likely cost some $7 million more to the state's taxpayers.

The latest report indicates the department's problems are still strongly tied to politics and fund raising issues that continue even after attempts by the state to separate politics and fund raising from the DOT organization 10 years ago, force disclosure of members fund raising records and require the board have members
with special skills in such fields as the environment and mass transit. Even that effort has failed and board membership "remains a plum spot for big political fundraisers who continue to ignore conflicts of interest and the wider needs of the state beyond their own districts"...
News & Observer
Dan Kane and Benjamin Niolet, Staff Writers
February 03, 2008

N.C. road building still mired in politics

Reforms in a 1998 law have failed to separate the state Board of Transportation from political fundraising

Nearly 10 years ago, state legislators championed a series of reforms for the scandal-plagued N.C. Board of Transportation that were intended to take the politics out of building roads.

Future appointees would have to disclose their political fundraising. Five of the 19 seats would be reserved for people with special skills in such fields as the environment and mass transit. Members would have to avoid even the appearance of a conflict of interest.

"The board's policies, effectiveness and integrity are important to almost every citizen," Beverly Perdue, then a state senator, said on Sept. 23, 1998, the day the bill cleared the legislature. "The public has demanded reform, and this bill lays the groundwork."

That groundwork has proven a weak foundation. A decade after Perdue hailed the reform law, the 19-member DOT board remains a plum spot for big political fundraisers who continue to ignore conflicts of interest and the wider needs of the state beyond their own districts.

For example:

* The fundraising disclosure rule is toothless. The only fundraising that board members must disclose is contributions directly handed to them. Asking people to give to a campaign or holding fundraisers -- two common ways to raise campaign money -- aren't considered fundraising on disclosure forms.

* Two of the five seats intended to bring more professionalism to the board have been given to fundraisers best known for running restaurant chains.

* Conflicts of interest continue to surface. Last month, board member Thomas Betts Jr. of Rocky Mount resigned after he sought to raise $20,000 in campaign money from country singer Randy Parton and the others behind the struggling performing arts theater in Roanoke Rapids. Betts had directed $2.5 million in road work to the theater over the previous year. He sought campaign money for Perdue, now lieutenant governor, who is seeking to be the next governor.

* Some at-large members, who are supposed to look out for the entire state, are steering their discretionary money to their home districts.

The board oversees a department with a $3.8 billion budget and a serious public image problem. A chorus of lawmakers, public policy advocates and even transportation department employees say that the department is dysfunctional -- at a time when the state's transportation needs are growing dramatically. A special "blue ribbon" legislative panel is meeting to figure out how to get the department back on track.

The department even bungled trying to fix itself. It hired a consultant at a cost of $3.6 million to help assess its strengths and weaknesses and foster change. But the department refused to disclose the terms of the contract and any findings until Gov. Mike Easley ordered them made public.

The board's makeup and activities have emerged as a campaign issue in the gubernatorial election. Perdue's rival for the Democratic nomination, State Treasurer Richard Moore, has made it a key part of his campaign. Last month, among other proposals, he announced that he would not appoint fundraisers to the board. Perdue has not called for banning fundraisers from the board.

Ten years ago, Perdue's DOT reform bill won favor over a stricter bill initially filed in the House that would have banned fundraisers from the board, required five experts in various areas, and taken away the governor's power to appoint the transportation secretary.

Last month, Easley said trying to ban fundraisers from the process would just push the money underground.

"When you get into the fundraising business, if people want to participate, they'll find a way, just like the squirrel into the bird feeder," Easley said. "I want to know how much somebody's given who's been appointed and I think people want to know as well."

Finding wiggle room

But when Easley was elected governor in 2000, two years after the reform bill passed, he quickly found wiggle room in the transportation reform law. Easley's counsel, Hampton Dellinger, asked Grayson G. Kelley, a senior deputy attorney general, for an interpretation of what made someone a fundraiser under the new law. (Dellinger is now a Democratic candidate for lieutenant governor.)

Kelley focused on the phrase "personally acquired" in the law. He said that meant the only disclosure required was of "funds the appointee personally accepted from a donor and physically transferred to the campaign, executive committee or political committee."

To make sure he had understood the intent of Perdue and other sponsors, Kelley said, he talked to the legislative staff who drafted the law. He said they support his view "that a narrow construction of the disclosure provision was intended."

Perdue declined to be interviewed for this report. Her spokesman, David Kochman, released a statement saying the legislation was a "starting point" for reform and stronger than the version passed by the House. Easley also declined to be interviewed.

With the opinion in hand, Easley's staff advised his appointees to the board in a memo that they did not have to disclose fundraising if it did not involve collecting the checks.

Shortly afterward, appointees Louis W. Sewell Jr. of Jacksonville and D.M. "Mac" Campbell of Elizabethtown wrote "none" on their fundraising disclosure forms. Interviews with other Easley fundraisers, and an internal Easley campaign document obtained by The News & Observer, show that Sewell helped meet a $125,000 fundraising goal in Onslow County, while the campaign counted on Campbell to help raise $50,000 in Bladen County. (An Easley spokesman, Seth Effron, said neither Easley nor Dave Horne, the campaign treasurer in 2000, could confirm the document's authenticity. Effron said Easley declined to comment on the information within it.)

Another Onslow County fundraiser for Easley, Joe Henderson, said that he, Sewell and another man solicited contributors by phone and held a reception for Easley at an inn that has since been torn down.

Sewell, who also served on the board under former Gov. Jim Hunt, did not return messages left at his home or at work. He is a retired executive with the Golden Corral steakhouse chain. In 2005, Easley awarded him one of the state's highest honors, the Order of the Long Leaf Pine.

Campbell confirmed that he raised money for Easley in 2000 and 2004 by holding fundraisers at his lakefront cottage, but he did not have to disclose his efforts because he did not collect the checks. He cited the Easley memo.

Another appointee, Lanny T. Wilson of Wilmington, said in his 2000 disclosure form that he would follow up with information about his fundraising, but no such documentation is on file with the legislature or the Governor's Office. Wilson said he doesn't remember whether he provided it and said he didn't have to anyway because he did not "personally acquire" contributions.

In the disclosure he filed for his reappointment in 2005, Wilson listed totals he raised for 17 candidates, including Easley. He also wrote that he held a fundraiser for Easley. But other than family members, Wilson does not list the names of any contributors. The form asks for the names of contributors; the law says that appointees are required to disclose contributions.

Some report fully

Three other DOT board members members provided more information.

Cameron W. McRae of Kinston, who owns a string of Bojangles' restaurants, provided a spreadsheet that listed not only contributors, but also everyone he solicited. They contributed $126,000 for Easley in 2000.

G.R. Kindley, the former mayor of Rockingham and a builder, and Paul Waff Jr., an Edenton contractor and developer, also provided lists of contributors. They raised $38,000 and $24,000, respectively.

"I wanted everybody to know who was contributing," Kindley said in an interview. "I think it's important to know."

Waff, who left the board in 2002, said he was appointed after he went to R.V. Owens -- a renowned fundraiser for Easley, state Senate leader Marc Basnight and other Democrats -- to express an interest in a seat.

Easley's appointee for transportation secretary, Lyndo Tippett, a CPA from Fayetteville, was also required to fill out the disclosure form. Like Sewell and Campbell, Tippett wrote "none" where the form asked for the names of those he had collected campaign contributions from. He attached an explanation that said he delivered bundles of contribution checks to the campaign in Raleigh, but he did not collect them from individual contributors. He said in an interview that he did not look to see who wrote the checks or the amounts.

Tippett said his disclosure was a "textbook" example of complying with the law.

Tippett was a member of the Cumberland County steering committee for the campaign, which held two fundraising events. In an interview, Tippett said that he helped organize at least one fundraiser, which Easley attended. He said he had a file on the fundraiser, but he couldn't remember what it contained. He said he didn't know if the file was still available.

"I don't know if it's still there," he said. "The shredder came through town a few months ago and shredded all the files whether it was personal or business. I have no idea at the moment."

The transportation secretary also said it was not his concern what board members reported regarding their fundraising.

"They don't report that to me, so I don't have a problem with that," Tippett said. "Not my issue."

Easley named Sewell and McRae to two of the five newly created at-large seats on the board. Though the three other at-large members were required to have "expertise" in environmental issues, mass transit or government-related finance and accounting, the two seats Sewell and McRae took did not have to meet that requirement. Sewell had to have only "broad knowledge of and experience in transportation issues affecting rural areas." McRae had to be "familiar with the State ports and aviation issues."

The reform law requires Sewell, McRae and the other at-large members to represent the interests of the entire state. But records of an economic development discretionary fund that lawmakers created in 2005 shows that Sewell, McRae and another at-large member, Larry Helms of Union County, have so far directed their allotments -- a total of $5.5 million -- to their home transportation districts. Original article ...