Shari Coatney, President/CEO SKIL said there’s “no way” the centers can pay back $10.3 million and remain open.
TOPEKA — A government-funded program that served the physically disabled in four northeast Kansas counties has gone out of business due to financial troubles.
“Last Friday was our last day,” said Ken Gifford, chief executive of Advocates for Better Living for Everyone (ABLE), which previously was known as the Center for Independent Living of Northeast Kansas.
The Atchison-based center provided a variety of community support services to about 400 disabled people living in Atchison, Brown, Jackson, and Doniphan counties.
“We ran out of money, that’s basically what happened,” Gifford said. “The state changed the funding streams, the economy kept going down and we didn’t have a big reserve fund. It just wasn’t going to work anymore.”
Gifford said the center’s answering machine now refers callers to Topeka Independent Living Resource Center (TILRC), which has agreed to take the calls.
“At this point, it’s an informal arrangement,” said TILRC Assistant Director Ami Hyten. “If somebody needs help, we’ll try to point them in the right direction. We do that already when we get calls from outside Shawnee County.”
Hyten said TILRC had agreed to provide fill-in services for about six months until the state can issue a request for proposal seeking to replace those previously provided by ABLE.
The closing of the Atchison center was preceded by the closing of a similar organization that had offices in Garden City, Dodge City and Liberal.
The Center for Independent Living for Southwest Kansas, closed in March 2011 after state auditors cited the facility for misspending more than $340,000 and for having billed Medicaid for more than $790,000 for services that could not be documented.
There are now 11 independent living centers in Kansas instead of 13.
“Back when there were 13, there were a lot of counties that were underserved because they’re so rural in nature,” Hyten said. “That’s still the case only now those resources are stretched even thinner.”
The Garden City center’s caseload has been taken over by the centers in Hutchinson and Hays.
The 11 centers’ operations are financed by a mix of state and federal funds.
In recent months, state officials have audited and then cited many of the centers for poor recordkeeping and misspending government money.
“Financial accountability - that’s our main concern,” said Angela de Rocha, a spokeswoman for both the Department of Children and Family Services and the Department for Aging and Disability Services.
State officials have demanded repayments from several of the audited centers totaling about $10.3 million. The centers, in turn, have appealed the findings.
“We don’t know what’s going on,” said Shari Coatney, who runs Southeast Kansas Independent Living (SKIL) in Parsons. “I looked at my audit and thought it was pretty good, and then they said we’d have to pay back about $3 million. It’s not the findings that are so bad, it’s the extrapolation. They take little mistakes and turn them into these huge expenses. It’s ridiculous.”
The extrapolation process used in the audits involves detecting an error in a sampling of documents - for example, a time card filled out incorrectly - establishing the error's cost and then projecting duplication of the errors and their costs over several months.
Coatney said there’s “no way” the centers can pay back $10.3 million and remain open.
SKIL is one of the largest independent living centers in Kansas. ABLE was one of the smallest.
Gifford said that in 2010, his program was audited by state officials and told it had more than $480,000 in "unallowable expenses," largely due to record keeping that did not meet the state's requirements. The audit covered Oct. 1, 2006 through June 30, 2009. In January, the state issued a second audit report on the agency for the period July 1, 2008 through June 30, 2010. That audit found $233.20 in "questioned costs," which were extrapolated for a total of $6,459.06.
“We ended up settling for $100,000,” Gifford said of the 2010 audit. “They didn’t say we’d done anything morally or criminally wrong, it was more that they didn’t like some of the things that we’d done programmatically. It was, like, they wanted separate accounts for everything and we wanted to simplify things and go with just a few accounts. But they showed us that we were wrong and I don’t deny that.”
Gifford said the center used its reserve fund to pay the $100,000.
“That pretty much wiped it out,” he said.
New payment system
The center, he said, also suffered a major financial setback last fall when the state changed the way it paid for in-home services for the physically disabled.
Previously, organizations that helped the disabled find, hire, and pay their caregivers were paid a bundled rate for the services that allowed significant disparities in how much workers were paid and did little to control administrative costs, according to state and federal officials.
In November, the state stopped using the bundled rate and began paying the organizations a flat rate of $115-per-consumer-per-month to cover their administrative costs.
“For us, that $115 a month was totally unrealistic,” Gifford said. “Our actual costs were $127 a month.”
De Rocha said the state's audit of the Atchison agency found that Gifford had borrowed money from the center and had used center funds to buy a high-definition television and a digital piano, neither of which involved services for the disabled.
“It’s indefensible,” she said.
Gifford told KHI News Service that he’d had a medical emergency and had “to have $3,000 up front” for a surgical procedure.
“Our personnel policies allow for payroll advances in emergencies,” he said. “I didn’t have $3,000, so I took out a payroll advance, which, by the way, will all be paid back as of this pay period.”
The television and piano, he said, were part of the center’s “community room,” a frequent gathering place for the center’s clients.
Gifford said state officials confiscated the television and piano on the center’s last day of operations.
“It was basically a Gestapo-type action,” he said. “They came in and looted everything. They said if it was bought with government money, it belonged to the state and they were taking it. I tried to tell them that we’d bought some of it with donations and with profits off of some of the services we provide. But they said we couldn’t prove that, so it belonged to the state.”
De Rocha said the confiscated items either would be sold or made available to the other centers. If they are sold, she said, the proceeds of the sales would be spent on services for the disabled. For now, she said, the items are in storage.
The closing of the Atchison center coincided with ongoing contract renewal discussions between DCF and the centers.
One of the issues in the negotiations is proposed new contract language that would prohibit center officials from using tax dollars to attempt to influence state or federal legislation.
The center officials have objected to the restriction, noting that their federal grants require them to advocate for the disabled.
“Everybody is trying to figure out what the new language does,” said Shelia Nelson-Stout, who runs Independent Connection, the center in Salina. “We know what it says; we don’t know what it really means.”
Initially, the new language read:
“No funds allowed under this agreement may be expended by the recipient of the grant to pay, directly or indirectly, any person for influencing or attempting to influence an officer or employee of any agency, a member or employee of a member of the United States Congress or the Kansas Legislature.”
Last month, the Kansas Department of Social and Rehabilitation Services, which is now known as DCF, amended the wording to allow centers to advocate in their local communities. The proposed restrictions on the centers attempting to influence state and federal policy makers were left in place.
“We’re trying to get this worked out,” said TILRC’s Hyten, who is an attorney. “When I was in law school I was taught write down what you want and what you don’t want. That’s the best contract to have, and that’s what we’re trying to come up with.”
De Rocha said centers shouldn’t be using tax money to lobby for more tax money.
The KHI News Service is an editorially independent program of the Kansas Health Institute and is committed to timely, objective and in-depth coverage of health issues and the policy making environment. Read more about the News Service.