The High Price Of Thrift?

[March 15th, 2006] Candace Clarke talks finance the way some people talk baseball. She tosses out words like "funding streams" and "deliverables" casually. And she's currently happy as finance director for the First Unitarian Church of Portland.

But if we traveled back one year, we'd see Clarke, then the $77,000-a-year business manager in Multnomah County's mental health and addiction services department, weeping as her boss fired her.

"I spent 40 minutes asking them to tell me what I'd done, why I was being fired, how I had not met my job expectations," she says.

Clarke says she never got an answer. But she suspects it has something do to with repeatedly telling her bosses about what she believed were serious financial problems with the county's annual $70 million budget for mental health and addiction services.

Last month, she filed a $450,000-plus whistleblower lawsuit in federal court spelling out those problems. County officials say they can't comment on the suit.

The suit is the latest addition to the mountain of woes besetting the beleaguered county government, from opening the Wapato Jail to fixing the county's crumbling bridges, at a time when it's still trying to scrounge up money for next year's budget.

According to Clarke's suit, there might be more money available for that budget if not for several alleged financial misdeeds.

The county allegedly paid one of its contractors, Cascadia Behavioral Healthcare, extra money when Cascadia said the funds it had received from the county wouldn't be enough to do what it said it would do.

Cascadia asked for about 20 percent more on a contract of about $400,000, recalled Clarke.

The lawsuit says Clarke assembled a committee of county finance officials to review the contracts. The committee recommended against making the additional payments, but the suit says her department's managers decided to go ahead and pay anyway.

The lawsuit also claims that in late 2004 or early 2005, state officials told Clarke that the county owed the state a refund of up to $700,000. The overdue money stemmed from problems with Medicaid funds that had either been used for the wrong services or for services on people who were ineligible for them.

She briefed higher-ups and told them she thought the county was lucky the state "did not intend to pursue a Medicaid fraud investigation due to the County's spending of Medicaid funds on services for non-eligible clients," the suit says.

"'You told me not to worry about this, but I'm really worried about it,'" Clarke says she told them. "I was told, 'Never mind, it's not a big deal.'"

Clarke also claims that the county wound up with extra money from the Multnomah County income tax when the state made additional payments for children's services that the county tax was intended to cover.

When you have two sources paying for the same service, you keep the one that is the usual source, in this case the state money, says Clarke, who was the financial director of a mental-health nonprofit before going to work for the county in 2004.

Instead of repaying county voters or the state, Clarke was told that County Chair Diane Linn's office OK'd spending all but $500,000 of the unspecified surplus, the lawsuit says. Linn, who is up for re-election in May, referred questions to County Attorney Agnes Sowle.

Sowle says she can't comment on Clarke's termination or claims because of the lawsuit.

Figuring out how to manage two funding sources is sometimes more an art than a science, says accountant Bruce Thompson of Kern & Thompson LLC, who audited Clarke's work at her previous job. He says Clarke was always looking for a better way to do things.

"I didn't have a problem during the three years I worked with her," Thompson says. "And nothing [bad] has come to light in the two she's been gone."