Steve Carty on leave from MCH
Officials with Mineral Community Hospital confirmed Monday that CEO Steve Carty is “on leave.”
Prior to going on leave, Carty had recently stepped down as CEO of Mineral Regional Health Center and was solely responsible for being the CEO of MCH.
According to sources with MCH, an executive committee has been appointed and formed in order to handle day-to-day responsibilities while Carty is on leave.
Cindy Stergar was recently hired as the interim CEO of MRHC.
The shake-up at both the hospital and health center come in the wake of the MRHC Board of Directors releasing a redacted copy of an accounting investigation into the handling of a $10.5 million Innovations Grant.
Sally Hensel and Loren Randall detailed several claims made by Co-Program Director Denyse Traeder regarding the handling of the grant. The claims were analyzed by the accounting firm, who along with providing MRHC with a series of suggested actions, and resulted in concerns about the “tone” of the leadership at the clinic.
“Tone at the top is extremely weak regarding internal controls, accountability, and processes,” the report states. “As long as the top level does not take accountability, internal controls and fiscal and grants management seriously then employees will not take it seriously either. As a non-profit, funded by taxpayer dollars, a high level of scrutiny and oversight is required regarding what is a reasonable and necessary expense to be charged to federal funding sources.”
The conclusions made regarding the leadership at MRHC are evident when examining the report - out of the 17 claims made by Traeder and investigated by the accounting firm, only two could not be confirmed or at least strongly supported.
These confirmed and supported claims range from the purchase of a Subaru and other charges “not permissible under the current terms of the agreement” to the submission of intent to apply for another federal grant, which is “unallowable” under the stipulations of the grant award.
Misallocation of grant funds used towards paying salaries of personnel is also among the charges.
Reasoning for the multiple instances of misallocated and misused grant funds can perhaps be found when the report discusses the bookkeeping methods for the innovation grant at the time of the investigation.
“Currently, they are running ‘two sets of books’ regarding the grant funds,” the report states. “One set is being used to file reports and make draw requests, while the other is used to generate bill payments and receive grant funds…the paper trail of who authorizes a transaction is generally absent.”
According to the report, MRHC was contacted “multiple times” by the Office of Accounting and Grants Management in order to “explain charges made to the innovation budget” that were “suspicious and/or were not allowable.”
The result of these interactions was “concern” by the grantor as well as “several items of cost” not being allowed.