Nebraska auditor accuses state contractor
Posted: Thursday, June 19, 2008
LINCOLN, Neb. (AP) -- State Auditor Mike Foley said his office has uncovered rampant financial impropriety at a business that contracted with the state to care for autistic people.
The top executive of the Autism Center of Nebraska said it is wrongly accused, but the auditor maintains that his six month investigation turned up evidence pointing to possible over billing of hundreds of thousands of dollars by the business and questionable spending of thousands more on personal items.
Among the findings in the audit is that nearly $20,000 was spent on home improvements, $14,000 on meals, and that the business double-billed and forged employee time sheets when trying to overstate the number of hours employees spent working under the state contract.
Foley accused the business of "deliberately falsifying records to deceive state officials in a clumsy attempt to improperly inflate the hours of service supposedly provided to its developmentally disabled clients" and that the business's actions could warrant criminal prosecution.
The audit findings have been handed to Attorney General Jon Bruning.
"We're in strong disagreement with his statements and mischaracterizations," said Randy Bojanski, chief executive of the Autism Center.
Foley said the business started by Bojanski and his wife, Rhonda, racked up $140,000 in charges to 18 different credit cards over nine months and that there is little documentation to show whether the expenses were related to the care of clients of the center.
Among purchases described in the audit as questionable -- including nearly $2,000 at Bed Bath & Beyond, $700 to buy a Rottweiler and roughly $200 spent beautifying fingernails -- were $14,000 in charges for hundreds of meals that appeared to be for executives of the center and not clients.
The most popular dining spot was the Bellevue Keno Casino, where more than $1,400 was spent. The audit says alcohol was purchased with the credit cards on at least four occasions.
The state Department of Health and Human Services said it would end its contract with the autism center.
Nonetheless, people served at the center under the state contract were safe and appeared to be receiving good care, said John Wyvill, director of the state health department's Developmental Disabilities Division.
Bojanski said that the center received a "glowing review" from the state earlier this month for the care it was providing people.
Bojanski said that about $21,000 of the credit card expenses were for personal items. But the spending was appropriate, he said, because the charges were to be covered by money the Autism Center owed him and his wife for taking care of an autistic man in their home and looking for housing for the man.
The remainder of the credit card charges were for business-related expenses, he said. The spending at Bed Bath & Beyond, for example, was to outfit a home where Autism Center clients stayed.
"There's been no taking of state money for personal use," Bojanski said. "We financed a lot of our operations using credit cards."
The Autism Center has served 52 autistic and developmentally disabled people under its state contract and received $2.3 million in state and federal funding from June 2007 through April. The biggest portion of clients served by the center under its state contract were people who lived in their own homes and who were cared for by center employees.
The Autism Center's leadership has expertise in community-based programs for the developmentally disabled. Executive director Rene Ferdinand was Nebraska's administrator of developmental disabilities from 2004 to 2007.
Foley is challenging more than $226,000 in billings to the state. He said the service billings weren't backed by records and questions whether the services were actually provided.
Also highlighted in the audit is what Foley described as a "sweetheart leasing deal approved by the organization's board that resulted in tens of thousands of dollars in rent payments on an empty house for 10 months."
The approximately $30,000 in rent and went to a separate fund formed to benefit the Bojanskis' children, Foley said. About $17,000 in government money was spent building a new deck for the house and $2,800 for a new furnace.
The home was owned by Rhonda Bojanski's parents, Foley said.
According to Foley, Rhonda and Randy Bojanski were allowed by the center's board to be both landlord and tenant of the home and told the board the home would be used for clients of the center. Instead it remained empty while government money paid for improvements to the home.
The Bojanskis now own the home. Improvements were necessary to make it meet codes required of group homes, Bojanski said, adding that the roughly $30,000 was used to pay the mortgage, not put in a fund to benefit his children.
The home was not used, he said, because clients the business expected to live there decided not to.
It will be up to the Department of Health and Human Services to decide whether to demand that the center repay the state for the home-related expenses and which credit card expenses were unrelated to its contracted work and should be repaid.
Foley said the center will be asked to repay the $226,000 worth of billings that weren't adequately documented. Most of those billings, an auditor in his office said, were for care provided to state clients.
Auditors do not know exactly how much state money was spent inappropriately because the billings, questionable credit charges, home-improvement costs and other items were paid for with a mix of state and federal dollars.
The audit also said the business kept two sets of employee time records -- one set that recorded actual time spent working under the state contract and another that "doubled the number of hours."
The business alternated between giving the auditor's office and the state health department the incorrect set of time records, Foley said.
In at least one case, Foley said, it appeared an employee's signature was forged on a time sheet that exaggerated the number of hours actually worked and that were billed to the state.
"I'm not saying we're completely infallible. We may have been looking at time sheets and correcting them," Bojanski said. "The auditor looked at less than one-tenth of 1 percent of the time sheets involved and said ... 'Something's wrong,"' Bojanski said.
Bill Dittrick, attorney for the center, said Foley demanded documents related to pay not required under the state contract. Some employees were salaried and didn't fill out time sheets, he said.
Foley repeatedly blasted executives of the business and their attorneys for trying to interfere with the investigation and said three law firms were used by the center.
On at least one occasion, the center used government money to pay an attorney, according to Foley's office.
His office's investigation began after a former employee of the center tipped off government officials, Foley said.
"I think there's more to this story we don't know," Foley said.
On the Net:
The Autism Center of Nebraska: http://autismcenterofnebraska.org/
Nebraska Health and Human Services: http://www.hhs.state.ne.us/
State Auditor Mike Foley: http://www.auditors.state.ne.us/
The top executive of the Autism Center of Nebraska said it is wrongly accused, but the auditor maintains that his six month investigation turned up evidence pointing to possible over billing of hundreds of thousands of dollars by the business and questionable spending of thousands more on personal items.
Among the findings in the audit is that nearly $20,000 was spent on home improvements, $14,000 on meals, and that the business double-billed and forged employee time sheets when trying to overstate the number of hours employees spent working under the state contract.
Foley accused the business of "deliberately falsifying records to deceive state officials in a clumsy attempt to improperly inflate the hours of service supposedly provided to its developmentally disabled clients" and that the business's actions could warrant criminal prosecution.
The audit findings have been handed to Attorney General Jon Bruning.
"We're in strong disagreement with his statements and mischaracterizations," said Randy Bojanski, chief executive of the Autism Center.
Foley said the business started by Bojanski and his wife, Rhonda, racked up $140,000 in charges to 18 different credit cards over nine months and that there is little documentation to show whether the expenses were related to the care of clients of the center.
Among purchases described in the audit as questionable -- including nearly $2,000 at Bed Bath & Beyond, $700 to buy a Rottweiler and roughly $200 spent beautifying fingernails -- were $14,000 in charges for hundreds of meals that appeared to be for executives of the center and not clients.
The most popular dining spot was the Bellevue Keno Casino, where more than $1,400 was spent. The audit says alcohol was purchased with the credit cards on at least four occasions.
The state Department of Health and Human Services said it would end its contract with the autism center.
Nonetheless, people served at the center under the state contract were safe and appeared to be receiving good care, said John Wyvill, director of the state health department's Developmental Disabilities Division.
Bojanski said that the center received a "glowing review" from the state earlier this month for the care it was providing people.
Bojanski said that about $21,000 of the credit card expenses were for personal items. But the spending was appropriate, he said, because the charges were to be covered by money the Autism Center owed him and his wife for taking care of an autistic man in their home and looking for housing for the man.
The remainder of the credit card charges were for business-related expenses, he said. The spending at Bed Bath & Beyond, for example, was to outfit a home where Autism Center clients stayed.
"There's been no taking of state money for personal use," Bojanski said. "We financed a lot of our operations using credit cards."
The Autism Center has served 52 autistic and developmentally disabled people under its state contract and received $2.3 million in state and federal funding from June 2007 through April. The biggest portion of clients served by the center under its state contract were people who lived in their own homes and who were cared for by center employees.
The Autism Center's leadership has expertise in community-based programs for the developmentally disabled. Executive director Rene Ferdinand was Nebraska's administrator of developmental disabilities from 2004 to 2007.
Foley is challenging more than $226,000 in billings to the state. He said the service billings weren't backed by records and questions whether the services were actually provided.
Also highlighted in the audit is what Foley described as a "sweetheart leasing deal approved by the organization's board that resulted in tens of thousands of dollars in rent payments on an empty house for 10 months."
The approximately $30,000 in rent and went to a separate fund formed to benefit the Bojanskis' children, Foley said. About $17,000 in government money was spent building a new deck for the house and $2,800 for a new furnace.
The home was owned by Rhonda Bojanski's parents, Foley said.
According to Foley, Rhonda and Randy Bojanski were allowed by the center's board to be both landlord and tenant of the home and told the board the home would be used for clients of the center. Instead it remained empty while government money paid for improvements to the home.
The Bojanskis now own the home. Improvements were necessary to make it meet codes required of group homes, Bojanski said, adding that the roughly $30,000 was used to pay the mortgage, not put in a fund to benefit his children.
The home was not used, he said, because clients the business expected to live there decided not to.
It will be up to the Department of Health and Human Services to decide whether to demand that the center repay the state for the home-related expenses and which credit card expenses were unrelated to its contracted work and should be repaid.
Foley said the center will be asked to repay the $226,000 worth of billings that weren't adequately documented. Most of those billings, an auditor in his office said, were for care provided to state clients.
Auditors do not know exactly how much state money was spent inappropriately because the billings, questionable credit charges, home-improvement costs and other items were paid for with a mix of state and federal dollars.
The audit also said the business kept two sets of employee time records -- one set that recorded actual time spent working under the state contract and another that "doubled the number of hours."
The business alternated between giving the auditor's office and the state health department the incorrect set of time records, Foley said.
In at least one case, Foley said, it appeared an employee's signature was forged on a time sheet that exaggerated the number of hours actually worked and that were billed to the state.
"I'm not saying we're completely infallible. We may have been looking at time sheets and correcting them," Bojanski said. "The auditor looked at less than one-tenth of 1 percent of the time sheets involved and said ... 'Something's wrong,"' Bojanski said.
Bill Dittrick, attorney for the center, said Foley demanded documents related to pay not required under the state contract. Some employees were salaried and didn't fill out time sheets, he said.
Foley repeatedly blasted executives of the business and their attorneys for trying to interfere with the investigation and said three law firms were used by the center.
On at least one occasion, the center used government money to pay an attorney, according to Foley's office.
His office's investigation began after a former employee of the center tipped off government officials, Foley said.
"I think there's more to this story we don't know," Foley said.
On the Net:
The Autism Center of Nebraska: http://autismcenterofnebraska.org/
Nebraska Health and Human Services: http://www.hhs.state.ne.us/
State Auditor Mike Foley: http://www.auditors.state.ne.us/
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