Source: Houston Chronicle Contact: Pubdate: Wed, 05 Nov 1997 Website: http://www.chron.com/ Board restores funding for Riverside General By Mark Smith Copyright 1997 Houston Chronicle AUSTIN In a quiet end to a highprofile probe of state funded drug and alcohol treatment programs, officials agreed Tuesday to reinstate funding for Houston's Riverside General Hospital. The Texas Commission on Alcohol and Drug Abuse Board voted unanimously to accept an agreement between Riverside and TCADA staffers that restores up to $1.6 million in funding for this year, pending financial and program reviews. The exact amount will depend on patient counts in Riverside's substance abuse treatment programs. The funding was withdrawn during a statewide investigation into alleged misuse of funds by Riverside and scores of other TCADA contractors. "This was the final open item in the process that involved 169 audits and lead to the return of nearly $6.8 million in disallowed costs from many program contractors," said TCADA Board Chairman James C. Oberwetter. "It was simply time to bring this matter to a conclusion." During the 20month probe, state investigators and auditors had questioned costs totaling more than $50 million by 158 TCADA contractors. Texas Department of Public Safety officials had said that more than 22 programs statewide would be referred to local authorities for possible prosecution. Riverside General was a key target, with $7 million in questionable expenses identified by investigators and auditors. A legislative committee investigating allegations of wrongdoing among TCADA contractors even hired a private detective to probe the financial compensation of Riverside General Administrator Earnest Gibson. But despite claims of widespread criminal abuses, only a handful of indictments were returned. And though Texas Rangers presented Harris County prosecutors with evidence against six Houstonarea providers, including Riverside General, none was indicted. The $7 million in questioned costs at Riverside has been whittled to $238,000 and the hospital is challenging that. The $50 million questioned statewide has shrunk to $6.8 million. The rest turned out to be legitimate and adequately documented under state guidelines, TCADA officials now say. In all, the investigation cost thousands of manhours and more than $6 million, including $3.6 million paid to a private auditing firm. "It was a long, unnecessary and unjustified process," Gibson said after the board action Tuesday. He said the hospital was vindicated by the decision Tuesday and by the findings of an administrative law judge in September. After listening to more than a month of testimony, Earl Corbitt, a senior administrative law judge with the State Office of Administrative Hearings, found that TCADA did not act in good faith during negotiations prior to terminating Riverside General's contracts. The judge also found that TCADA's decision was "arbitrary and capricious." Corbitt recommended that TCADA reinstate all of Riverside's contracts except an outpatient program for women, and said that one could be reinstated if Riverside met certain management and personnel conditions. The judge's recommendation was submitted to the TCADA Board for a final decision, but it never came to a board vote because of the agreement between Riverside and TCADA staff. Oberwetter complimented Corbitt's factfinding and analysis, and said the judge had found fault on both sides in the dispute between Riverside and TCADA. Oberwetter also noted that because of widespread turnover among TCADA staff, some of the judge's findings about TCADA activities in 1995 and 1996 are not applicable now. "It would concern me if there had not been almost a complete turnover at the senior staff level of TCADA since that action to terminate Riverside's contact was taken in March 1996," Oberwetter said. The turnover came after TCADA became the first state agency in modern history to be placed under conservatorship in mid 1995. At that time, investigators reported evidence of substantial fiscal mismanagement, including possible theft of private, state and federal funds. Many TCADA managers left the agency or were terminated. Corbitt said he would discuss with the TCADA staff whether to reimburse Riverside General for several million dollars in drug and alcohol treatment programs the hospital provided after its contracts were terminated. "I think TCADA will do the fair thing in reimbursing us for services already provided to the community," said Gibson. He told the board that Riverside General had continued five drug and alcohol treatment programs after the state funding was terminated.