DHS Investigation Claims Top Administrators

James Toews and Cathy Cooper step down after program mismanagement revealed
March 18, 2011 -- The state’s top two administrators for the Division of Seniors and People with Disabilities have lost their jobs in connection with an investigation into a federal grant program that helped transition seniors from nursing homes to residential settings.
James Toews, assistant director and long-time employee at the Department of Human Services, was stripped of any management duties but will remain on staff as a policy advisor until after the legislative session. And Cathy Cooper, who’s worked at the agency for 31 years, will retire.
The news was delivered to state lawmakers this week from Erinn Kelley- Siel, acting director of DHS, and first reported by the Oregonian.
“I’m taking the opportunity of this management change to begin the transition to a more streamlined reporting structure,” Kelley-Siel wrote legislators. “James and Cathy have served our state for many years, and their work has helped Oregon achieve its well-deserved reputation for excellence in the service of seniors and people with disabilities.”
So far three state employees have lost their jobs over the alleged mismanagement of a $40.2 million federal grant program known nationally as Money Follows The Person. In Oregon, the program is called On The Move, and it’s intended to pay for equipment and building modifications that could make the difference in allowing someone to receive care at home rather than a nursing home.
The state had drawn down $17.9 million of the federal funds and spent $6.4 million in state general fund dollars before it was halted last August. The program has served 279 seniors and people with disabilities since 2008.
A missed deadline to report to the Centers for Medicare and Medicaid Services about re-investment dollars began to raise red flags. In August 2010, program administrator Julia Huddleston resigned and an investigation into the program was launched.
Results of that investigation were released this week. Investigators found no criminal wrongdoing, but did find considerable mistakes by Huddleston, saying she “knowingly and intentionally failed to follow state procedures.”
The report found no direct fault by Toews and Cooper, however, saying their level of management was “consistent with the level of supervision for similar upper level management positions.”
Nonetheless, Kelley-Siel decided to dismiss both long-time employees. She also said she would take more direct control over the federal grant program and called for an in-depth audit of the $24 million already spent.
“Oregonians appropriately expect their government to operate accountably, efficiently and transparently,” Kelley-Siel wrote legislators. 
A review of the program by the fraud investigation unit within DHS alleges general mismanagement on the part of Huddleston, program director.
She allegedly failed to report figures accurately to CMS and loaned money to providers for costs not directly related to client services. Loans were offered with zero interest and no specific repayment plan in direct violation of the grant program, according to the report.
Investigators also allege Huddleston used state equipment for personal use, kept inadequate and disorganized records and made promises to providers she was unauthorized to make.
In the biggest case, the Clatsop Care Center started a $7.5 million building project on promises it would receive $1.8 million on Oregon On the Move grant funds. When the program was halted, those funds were denied.

To Learn More

For past reporting at The Lund Report click here. 
For a summary of the investigation click here.
For the full 134-page report click here.
For Erinn Kelley-Siel’s remarks to legislators click here.



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I highly recommend reading the entire report. It is a fascinating read and clearly establishes responsibility for the mismanagement on Julia Huddleston, a felon previously convicted for forgery. What the report also shows is how James Toews and Cathy Cooper took all of the appropriate steps upon learning of the mismanagement by Huddleston. Usually, administrations try to hide these things and cover them up. I can’t help but wonder about the message being sent to the State’s top executives around wrong doings in their organizations. All organizations, public, private and non profit, have bad apples. It’s nearly impossible to avoid. As a taxpayer, I want leaders that remove the bad apples to be rewarded, not punished.

I know many things about another programs that Ms Huddleston knowingly mismanaged with federal money and grant monies. Cooper and others even higher up knew about the mismanagement and REFUSED to act. In fact, DHS rewarded her by giving her (JH) another program

I know that another program was also knowingly mismanaged by Huddleston involving Medicaid and RWJ grant funds. When DHSs' senior management became aware of the problem, they ignored it and rewarded her by giving her (JH), The Money Follows the Person program.

After reading this report, I don't get it. We were supposed to save money by relocating people out of nursing homes and then we spent 2 and a half to three times more per person to serve them in unlicensed foster care homes? There are some serious problems and corruption in Oregon's foster care program. Poor care, virtually no oversight, rampant abuse of vulnerable people and now apparently also corrupt public officials who pay unlicensed contractors to remodel these homes, add family rooms and skylights and pay out $20,000 per home in start up funds? My guess is this initial report only scratches the surface of what they are going to find once they start their payment by payment analysis. It is only a matter of time until the feds are going to be all over this program. Medicaid fraud is rampant in the foster care system and this report is only the tip of the iceberg. State officials have been ignoring problems in adult foster care homes for years.

The real tragedy here is that the OTM program was haulted. The intention was to save Oregon money by moving people from skilled nursing settings to community based settings that would cost about half as much per month. The other advantage of community based settings was an increase in quality of life due to residential settings and a minimum of institutional elements and restrictions on personal freedom. I am so disappointed that seniors and people with disabilities lost out on what should have been an excellent opportunity for them and for the taxpayers providing their social safety net. This is another voice to confirm that people were shouting about Julia Huddleston and Linda Wolke's conduct during this project. When Toews was contacted with concerns regarding their behavior, he was non-responsive. The OTM program is a good thing for Oregon. The administration of the program was poor. It is outrageous that no criminal charges have been filed. DHS should conduct a comprehensive project of employees hired prior to 1986 when criminal history checks were required to ferret out the rest of the felons working at the agency.