DHA forced to pay back federal grant for disallowed purchases

By Steve Wilson
June 4, 2019

A non-profit organization that deals with healthcare and education programs in the Delta is in the process of paying back $1 million from a federal grant to taxpayers for spending disallowed by federal rules.

According to a 2015 decision by the U.S. Department of Health and Human Services, the Delta Health Alliance — a 501(c)(3) non-profit organization that receives most of its money from taxpayers in the form of federal and state grants — had to pay back $1 million out of more than $34 million in grants for healthcare and educational programs in the impoverished Delta region. 

According to the organization’s 2017 audit, the organization will pay back the $1 million over a period of 10 years, interest free, with payments of $100,000 paid annually in a deal it reached with the U.S. Health Resources and Services Administration in 2017.

Some of these costs disallowed in the HHS decision included new furniture for the DHA’s offices in Ridgeland and costs related to a gala at the B.B. King Museum to celebrate the one-year anniversary of one of the programs covered under the grant.

The Health Resources and Services Administration, which is an agency of the HHS, determined that the alliance spent more than $1 million on disallowable items in 2014. The DHA appealed the determination before the Departmental Appeals Board, which issued the final decision on March 12, 2015.

When a federal agency supplies a grant, the money comes with restrictions on how it could be spent. The U.S. HHS disallowed some of the spending by the DHA from 2009 to 2011 under the grant. Some of these included:

  • $152,474 in payments made for an information technology consulting contract with the Coker Group that included $31,000 and $33,900 for a chief information officer consultant, travel costs plus the costs of renting an apartment along with furniture and utility costs.
  • $79,584 for payments to the Keplere Institute for a summer program that provided workforce training in pharmacy technology unrelated to the grant’s purpose.
  • $77,998 for direct and indirect costs for charges made for travel and other expenses to the DHA credit card.
  • $69,965 for a contract with the Compass Group, which was hired to develop fundraising strategies for the organization for when the grants expired.
  • $48,785 in direct and indirect costs for travel and telephone allowances by DHA employees.
  • $45,727 in direct and indirect costs for furniture for DHA’s Ridgeland office.
  • $42,182 for DCG Inc. for policy development, statistical analysis and consulting services that benefitted other work by the DHA unrelated to the grant.
  • $27,575 for payments to external reviewers hired by DHA to assist in evaluating proposals for projects funded by the grant.
  • $17,768 for promotional items, sponsorships and other costs.
  • $11,232 in direct and indirect costs for event costs that included the rental of space and refreshments for a celebration at the B.B. King Museum to celebrate the one-year anniversary of the Indianola Promise Community, one of the programs covered by the grant.

According to the audit, 70.84 of the DHA’s 33.12 percent of the DHA’s funding in 2017 came from the U.S. Department of Education and 37.72 percent came from the U.S. Department of Health and Human Services.

The organization has received $10.6 million over the past four years from state taxpayers for a technology-based program to help providers reduce preterm births and conditions that can lead to type II diabetes among the Medicaid population in a 10-county area in the Delta.

The legislature appropriated $4,161,095 in the recent session for the project in Medicaid Division’s appropriation bill that was signed into law by Gov. Phil Bryant and goes into effect on July 1.


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