A report released yesterday by the state Office of Legislative Audits revealed the results of an audit of the Rosewood Center, a state-run facility in Baltimore County that provided treatment to developmentally disabled individuals until it closed its doors in June 2009.

The report notes that there were several deficiencies in record keeping as the center was winding down its operations. For instance, the center failed to do an inventory of equipment prior to closure, and could not account for roughly $18,000 worth of equipment while the audit was being conducted. The center was also unable to account for the expenditure of donated funds totaling $580,102, most of which had been donated by one individual. Center staff told auditors that the money had been used to purchase wheelchairs and other items to be used by residents transitioning out of the facility and into other residences, but the center "did not obtain documentation (such as copies of invoices) to ensure the equipment was actually purchased by these facilities and was being used for the clients." The report says that the center also failed to document the disbursement of some of its bank accounts and lacked documentation on the "propriety of certain corporate purchasing card transactions for the purchase of gift cards."

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According to Bruce Myers, CPA and legislative auditor for the office, this was a routine audit conducted whenever a facility such as Rosewood ceases operation. It was conducted in cooperation with the state Department of Health and Mental Hygiene (DHMH), which operated Rosewood. DHMH responded to each of the deficiencies documented in the report and indicated that it had resolved some and is working to resolve others. Specifically, the DHMH says it has located some of the missing inventory and will continue to search for any additional missing items; the agency says it has now documented how the donated funds totaling $580,102 were spent and has reverted what remained of that amount—$28,740—to the state's General Fund; finally, it says it is reviewing the bookkeeping for the center to ensure that all bank accounts were properly disposed and to document the propriety of the transactions pointed out by the audit. The DHMH says its review will be completed by April.

Myers says he was "a little disappointed" with the results of the Rosewood report.

One of the things that caught his eye in particular, Myers adds, is that it's going to take months for some of the financial issues to be resolved.

"Some of these things aren't going to be completed soon," he says. "This place has been closed and these things are still open. . . . Things weren't closed out as timely as I would have hoped."

According to David Paulson, spokesman for the DHMH, the department acknowledged and resolved most of the problems found in the audit and will keep a "watchful eye" over future facility closures—such as

, for which Legislative Audits will also provide a report—to make sure there are no deficiencies. As for Rosewood, he says, "the money as I understand it has been accounted for and all the original receipts for what it has been spent on have been recovered."

"There are probably, as our response [to the audit] indicates, some good lessons learned and some policies and procedures that the department agreed with" that can be put into place for any future closures, Paulson adds.

Myers says that his office will issue a response to the DHMH, probably within a month, to ask any further questions and try to reconcile any differences of opinion about how to respond to the audit. If Legislative Audits and the DHMH do not come to terms, the matter gets sent to a joint audit committee of the General Assembly. In this case, though, that doesn't sound likely to happen.

"Most of the time we do come to agreement on what should be done," Myers says. "So hopefully that'll happen here. I think the [DHMH] response was fairly agreeable."

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