Board restores funding for Riverside General

By Mark Smith
Copyright 1997 Houston Chronicle

AUSTIN In a quiet end to a highprofile probe of state funded drug and
alcohol treatment programs, officials agreed Tuesday to reinstate funding
for Houston's Riverside General Hospital.

The Texas Commission on Alcohol and Drug Abuse Board voted unanimously to
accept an agreement between Riverside and TCADA staffers that restores up
to $1.6 million in funding for this year, pending financial and program
reviews.

The exact amount will depend on patient counts in Riverside's substance
abuse treatment programs.

The funding was withdrawn during a statewide investigation into alleged
misuse of funds by Riverside and scores of other TCADA contractors.

"This was the final open item in the process that involved 169 audits and
lead to the return of nearly $6.8 million in disallowed costs from many
program contractors," said TCADA Board Chairman James C. Oberwetter. "It
was simply time to bring this matter to a conclusion."

During the 20month probe, state investigators and auditors had questioned
costs totaling more than $50 million by 158 TCADA contractors. Texas
Department of Public Safety officials had said that more than 22 programs
statewide would be referred to local authorities for possible prosecution.

Riverside General was a key target, with $7 million in questionable
expenses identified by investigators and auditors. A legislative committee
investigating allegations of wrongdoing among TCADA contractors even hired
a private detective to probe the financial compensation of Riverside
General Administrator Earnest Gibson.

But despite claims of widespread criminal abuses, only a handful of
indictments were returned. And though Texas Rangers presented Harris County
prosecutors with evidence against six Houstonarea providers, including
Riverside General, none was indicted.

The $7 million in questioned costs at Riverside has been whittled to
$238,000 and the hospital is challenging that. The $50 million
questioned statewide has shrunk to $6.8 million.

The rest turned out to be legitimate and adequately documented under state
guidelines, TCADA officials now say.

In all, the investigation cost thousands of manhours and more than $6
million, including $3.6 million paid to a private auditing firm.

"It was a long, unnecessary and unjustified process," Gibson said after the
board action Tuesday.

He said the hospital was vindicated by the decision Tuesday and by the
findings of an administrative law judge in September.

After listening to more than a month of testimony, Earl Corbitt, a senior
administrative law judge with the State Office of Administrative Hearings,
found that TCADA did not act in good faith during negotiations prior to
terminating Riverside General's contracts. The judge also found that
TCADA's decision was "arbitrary and capricious."

Corbitt recommended that TCADA reinstate all of Riverside's contracts
except an outpatient program for women, and said that one could be
reinstated if Riverside met certain management and personnel conditions.

The judge's recommendation was submitted to the TCADA Board for a final
decision, but it never came to a board vote because of the agreement
between Riverside and TCADA staff.

Oberwetter complimented Corbitt's factfinding and analysis, and said the
judge had found fault on both sides in the dispute between Riverside and
TCADA.

Oberwetter also noted that because of widespread turnover among TCADA
staff, some of the judge's findings about TCADA activities in 1995 and 1996
are not applicable now.

"It would concern me if there had not been almost a complete turnover at
the senior staff level of TCADA since that action to terminate Riverside's
contact was taken in March 1996," Oberwetter said.

The turnover came after TCADA became the first state agency in modern
history to be placed under conservatorship in mid 1995. At that time,
investigators reported evidence of substantial fiscal mismanagement,
including possible theft of private, state and federal funds. Many TCADA
managers left the agency or were terminated.

Corbitt said he would discuss with the TCADA staff whether to reimburse
Riverside General for several million dollars in drug and alcohol treatment
programs the hospital provided after its contracts were terminated.

"I think TCADA will do the fair thing in reimbursing us for services
already provided to the community," said Gibson. He told the board that
Riverside General had continued five drug and alcohol treatment programs
after the state funding was terminated.