ANNAPOLIS, Md. (AP) - A complaint to a government fraud hotline about a $750,000 grant by Maryland’s Opioid Operational Command Center to buy a former country club triggered a state audit that found “numerous deficiencies” with the center’s grant process, auditors said in a report released Wednesday.
The state’s Office of Legislative Audits reviewed the grant after receiving an allegation through the office’s fraud, waste and abuse hotline. The allegation prompted auditors to review procedures and to test 18 grants with awards of $6.1 million during fiscal years 2018 and 2019.
The review found that the center did not have written policies and procedures for selecting grantees, amounts awarded and the monitoring of grantees.
“As a result, we identified numerous deficiencies with OOCC’s grant process, which raised questions about the integrity of the awards and related payments,” Maryland Legislative Auditor Gregory Hook wrote to state lawmakers.
Sen. Clarence Lam, who co-chairs the General Assembly’s Joint Audits Committee, noted that the audit was critical of nearly $1.3 million in grants.
“The findings of this independent audit are deeply disturbing,” Lam said in a statement. “There is no reason that the Opioid Operational Command Center is awarding millions of dollars of state funds without written policies or procedures when Maryland continues to face a crisis of opioid overdoses and deaths.”
The center, which was formed by an executive order from Gov. Larry Hogan in 2017 to support efforts to prevent and treat heroin and opioid addiction, decided not to fund the grant to a nonprofit organization to buy the former country club in Caroline County. The agency told auditors that the decision related to the complexity of executing a grant agreement involving real estate.
However, before that decision, concerns about the propriety of the grant were made by the local health department that was to execute the grant agreement, auditors said in the report. The state health department’s inspector general investigated the concerns and referred the matter to the governor’s chief counsel and the attorney general’s criminal division, the audit said.
State auditors said their review found the center had no documentation to support its evaluation of the grant proposal or the amount offered. The general purpose of the grant was to develop rehabilitative services in the fight against opioid addiction. A food center would have been developed that included food processing, a farm-to-table restaurant, an event venue and potentially a nine-hole golf course, the audit said.
Center officials disputed how the land deal was characterized in the audit.
“The fact that the site chosen for this treatment program was used many years ago as a country club and golf course is irrelevant, and the inclusion of this information in the audit report is not only unnecessary but also a mischaracterization,” the center wrote in its response to the audit. “The property is now undeveloped agricultural land.”
The center also disputed that the local health department raised concerns about the propriety of the grant.
“Despite ongoing, regular, and cordial communications with the local health department, no reservations about fraud, waste, abuse, or the overall propriety of this grant were raised to the OOCC,” the center said in response.
But auditors said their review identified that the OOCC had been notified in writing about “specific irregularities” in the grant award process by the health department’s inspector general in April 2019.
Auditors recommended that the OOCC establish comprehensive policies and procedures for awarding grants. The agency agreed in its response to the audit.
“While the OOCC concurs with most of the observations in the audit report, the document omits critical information pertaining to new policies and procedures that the OOCC identified and began implementing prior to the commencement of this audit,” wrote Steve Schuh, the agency’s executive director, and Danielle Holmes, the director of finance, in a Feb. 4 letter in response.
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