State Finds Theft, Misuse of Health Grant Funds

An audit of the non profit once tapped to create the state’s telehealth network has found more than a million dollars in stolen, missing, and misused funds.

Community Health Network asked the state to investigate its books after former CEO Keith Williams abruptly resigned a year ago via email and went to work for a software company

The audit found that CHN had used grant money to buy unauthorized software from that company. The software went mostly unused.

The report alleges that Williams and another former executive, Paul Monroe, skimmed off about 90-thousand dollars for themselves. During their tenure, CHN pocketed hundreds of thousands of dollars in state grant money. The funds were intended to help health care providers, like Nashville’s Meharry Medical Group, set up electronic-prescription systems. CHN also overbilled grants that it administered for the state and for Blue Cross/Blue Shield. And it can’t account for all of the funds meant to set up teleconferencing between doctors and patients in rural areas.

Within a month of William’s resignation, CHN’s board discovered enough evidence of wrongdoing to fire Monroe. But it was too late to save CHN. The organization is not financially solvent and is currently winding down operations.

The Comptroller’s office is now handing over its findings to the State Attorney General and District Attorney General.

Web Extra:

Statement by Community Health Network Board of Directors concerning the Investigated Audit Report from State of Tennessee dated July 7, 2011

After the abrupt and unexpected resignation of Keith Williams, CHN’s former CEO, on January 25, 2010, the CHN Board of Directors began uncovering the organization’s true state of affairs.
This was difficult because, despite all our efforts, CHN was not able to communicate with Mr. Williams after his resignation. We can only surmise that the reason he left so abruptly is because he was no longer able to sustain the representations and promises he had made to the CHN Board of Directors.

Immediately after receiving Mr. Williams’ resignation, the Board of Directors engaged a consultant to review all of CHNs active contracts and grants. As soon as the Board of Directors realized that Mr. Williams misrepresented the financial affairs of the organization, it engaged an accounting firm to conduct a forensic audit. Additionally, the Board of Directors contacted the State of Tennessee to report its concerns and to initiate an investigation. Since that time, the Board of Directors has supported and cooperated fully with the state’s investigation.

The CHN Board‘s first priority has been to safe guard access to health information technology for Tennessee’s community health centers and their patients. In February 2010, within a few weeks of the resignation of Mr. Williams, The Board of Directors terminated the employment of its former Chief Financial Officer, Paul Monroe. The Board then named Deb Gott to serve as its Interim Executive Director who has been maintaining basic services to the CHN membership and communication with CHN partners. CHN has continued to work with its member community health centers to assist them in making alternative plans for securing IT services. CHN has been able to continue operations but faces serious fiscal challenges.

The Board deeply regrets the breach of trust that occurred through the actions of its former CEO and has worked to assure that a full accounting of the organizations finances and operations has been made.