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No fraud found at Fairbanks Behavior Health Center

Posted: January 24, 2014 - 1:07am

FAIRBANKS — A report launched by the Alaska Department of Health and Social Services on the now defunct Fairbanks Community Behavior Health Center found mismanagement, but no evidence of fraud.

The 45-page report authored by BDO Consulting for the state found a “lack of transparency in financial planning,” the Fairbanks News Miner reported Thursday.

The $50,000 report also found lack of desk procedures, closing schedules, and document retention.

The Fairbanks Community Behavior Health Center was providing care for 1,000 clients per year before it abruptly closed in September, laying off 60 employees. FCBHC closed with a $1.2 million debt. The newspaper reported FCBHC board members were not aware of the center’s financial problems until four months before it closed, when it became increasingly difficult to make payroll.

Since its closure in September, local mental health services have been transferred to Fairbanks Community Mental Health Service, an off-shoot of an Anchorage-based nonprofit organization. By doing so, the number of behavior health employees has been reduced from 60 to 25.

Barbara Burch, who served as chairwoman for the FCBHC board, said she was not surprised no evidence of fraud was found.

“What I really felt in my heart and head was that people were getting into territory they were uncomfortable with and didn’t tell anyone about it,” Burch said.

BDO noted that its audit was incomplete due to a lack of information and documentation. Though a hard drive scan did not reveal any unusual activity at the center, BDO did notice activities warranting closer study, including single irregular payroll payments to former Executive Director Kelly Shanklin and former Chief Financial Officer Brandi Simington.

BDO found FCBHC’s finances were deteriorating over a four-year span, from 2009 to 2012, where revenues exceeded expenses only once, in 2010. Net assets decreased four out of five years from 2009 to 2013, the report states.

The BDO report includes recommendations for better state oversight of behavioral health programs. It also included in the report methods for improved measurement of financial date and billing practices.

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