DETROIT – Wayne County's troubles are a laundry list of disasters.
A $300 million jail project so over budget it had to be stopped. The FBI descends on the Guardian Building and hauls off records while handing out subpoenas. Staffers have been arrested and pleaded guilty for taking bribes and other criminal wrongdoing. HUD is chasing the county for nearly a million dollars for allegedly allowing a Ficano appointee to insert himself into a construction contractor's company [his brother-in-law's] after the contract was let and the building started.
So when the State of Michigan weighs in on a similar problem with Wayne County, it gets our attention.
Today Local 4 came into possession of a letter from Michigan Department of Human Services Director Maura Corrigan. The former Michigan Supreme Court Chief Justice pulled no punches in her slamming of Wayne County for its business practices. She cited a report done by the Whall Group of Auburn Hills. It was a secondary look into a State of Michigan investigation of the Juvenile Justice program called the Child Care Fund. This is a taxpayer funded operation all Michigan counties have. Traditionally this program has been a financial disaster and the State of Michigan and Wayne County have worked together for years to try and make it run more smoothly and at less cost. Under a contract with Wayne County, the State of Michigan split the costs of juvenile justice. That is about to end and here is the reason why: the scent of corruption.
Corrigan's letter says in part:
"Over the course of the last 18 months, DHS has uncovered issues with Wayne County's financial management of the Managed Care model and the expenses submitted for CCF reimbursement."
This is how they worked together on funding the juvenile justice system. Much like an expense report you might fill out for your employer, Wayne County would spend the money on the program and then send an expense report to the state. But the reports apparently weren't passing muster. So the State investigated and then gave its findings over to the Whall Group to see if their numbers and findings were correct.
Whall said the following: "The appearance of conflict of interest and the potential for abuse is a significant issue. Pertaining to 'donor funded contracts' that the funding model does have the appearance that the contractors must first agree to donate money to receive a contract with the county."
Sound familiar? Corrigan's letter goes on: "The Whall Group report demonstrates that Wayne County has failed to ensure appropriate controls over the financing of the managed care model. This has resulted in several errors that have cost the state millions of dollars. The letter goes on to cite several specific examples of improper expense reports. Corrigan found the allegations so damning she is no longer going to split costs with Wayne County on juvenile justice and she is demanding $3.4 million back from the cash strapped county and Local 4 has been told by sources in Lansing that figure could increase.
You can imagine inside the Guardian Building they are a little sensitive these days to the kind of language found inside Corrigan's letter. Bob Ficano's office fired off a seven page response to Corrigan stating in no uncertain terms just how incorrect the MDHS director is. The rather fiery response showed how the State of Michigan has actually praised the County's handling of the program, cutting the costs and how it had actually approved of the program management the County is using.
Moreover, the County gets into the minutia of cash vs. accrual accounting. I'll not glaze your eyes over explaining that distinction. But you get the idea, Wayne County believes it has been not only a good partner with the state on this contract but has done an exemplary job running the program that is costing less and less every year. No one inside the county can understand why Corrigan is coming down on them so hard.
Tad Sturdivant now runs the Department of Children and Family Services for Wayne County and he is the former head of the Michigan State Police. He told me today "we disagree" with the state's findings and was more than clear in saying, "There was no pay for play" anywhere within this contract. He says there may have been misunderstandings about how the money was used but in the end he said, "This is a process that we will respond back. The state will look at our responses and I think we can come together and resolve this issue."
That's bureaucrat public-speak for we will close the door and roll up our sleeves and get to the bottom of this issue and there are likely to be hoarse voices and maybe even a fat lip when the meeting ends. Ficano's office is not happy at all with the tenor of the letter and has said in no uncertain terms there is a lot of incorrect information contained in it and there might even be a political agenda attached to the tough nature of Corrigan's letter. At the same time Corrigan's office is saying it stands by its findings.
This fight is far from over and considering the amount of money involved it could get more interesting in the days ahead. Count on Local 4 to keep you updated.