Report: Kits purchased with federal money to help needy delayed, overpriced at Ala. community health centers - Northwest Georgia News: National

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Report: Kits purchased with federal money to help needy delayed, overpriced at Ala. community health centers

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Posted: Monday, July 21, 2014 7:00 pm

BIRMINGHAM, Ala. (AP) — Thousands of overpriced emergency kits purchased with $660,000 in federal money by Alabama-based community health centers sat in storage long after they were supposed to have been distributed to help the poor and homeless, Al.com reported.

And, more than four years after the kits were supposed to have been in the hands of the needy, it's still not clear what happened to all of them.

Citing documents released from the Freedom of Information Act, Al.com reported that two community health centers, the Tuskegee-based Central Alabama Comprehensive Health and Birmingham Health Care, submitted applications in 2009 seeking federal grants to purchase Safety and Health Emergency Preparedness, or SHEP, kits that were supposed to be given to the less fortunate.

Containing a flashlight, gauze, burn gel, tweezers and a lanyard and packaged in a six-pack sized case, the kits were meant to help people during and after emergencies.

But while the kits were supposed to be distributed by March 2010, federal inspectors found that thousands still sat in warehouses in May 2011, after the tornado disaster that devastated Alabama by wiping out entire communities, killing about 250 people and injuring thousands.

Aside from the delayed distribution, federal inspectors also are questioning the deals behind the purchase of the kits, Al.com reported. Inspectors said the kits were "grossly overpriced."

The story of the SHEP kits began in June 2009 when Sharon Waltz submitted two nearly identical applications to the federal Department of Health Resources Services Administration seeking funding for 6,000 total kits. Waltz was working for Birmingham Health Care and Central Alabama Comprehensive through a consultant company, Synergy Health Link.

Waltz's boss was Jonathan Dunning, the immediate past chief executive of Birmingham Health Care and a former CEO for Central Alabama Comprehensive Health as well. According to federal reports, Dunning had the dual role of CEO for each organization until he resigned in March 2009. Dunning retained power over both organizations as a consultant, according to the documents.

AL.com has previously reported that during a four-year period, before and after Dunning was CEO, the Birmingham and Tuskegee clinics paid more than $2 million to Dunning's companies, according to a review of the clinics' tax filings from 2007 to 2010, the latest filing available.

Waltz, who was working for both centers through Synergy contracts, would later sue Dunning alleging years of ongoing sexual harassment. Dunning, who is married, and Waltz had two children together and Dunning admits the affair but strongly denies the harassment. That case is now pending in federal court.

With the community health centers approved for $331,650 each to buy kits, Dunning negotiated a deal with a supplier to buy the kits and supplies for $35.71 apiece, or $107,130 for 3,000 kits. Dunning's company, Synergy, then charged each clinic $181,650 for the kits, a difference of $74,520 each.

Additionally, Synergy Health Link charged each clinic $150,000 for electronic "smart" cards that were supposed to store medical information but weren't used.

Federal inspectors found that only a fraction of the kits had been distributed more than a year after they were supposed to have been given out. The inspectors said the kits were "grossly overpriced" and that there was no evidence of bid-taking in selecting Dunning's company.

In an email, Waltz told AL.com last week she "didn't think there was anything improper at the time" about the grants. She said they came on the heels of Hurricane Katrina, and the idea was to give needy people something to help them in an emergency.

"I was not the person responsible for distribution or pricing," she said, adding that she had no idea how many were distributed.

Ken Dowdy, a lawyer for both Birmingham Health Care and Dunning, said the kits had been distributed but did not elaborate on when or where. He said he did not know what happened to kits delivered to the center in Tuskegee.

Central Alabama Comprehensive Health has sued Birmingham Health Care over some of the issues. A trial that had been set to start July 28 was postponed last week.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.