State Emergency Department Audit Finds $33 Million Deficit, $4 Million Embezzlement

Virginia’s Office of Emergency Medical Services is considering several reforms to get the agency back on track, following an audit that confirmed a deficit of $33 million and over $4 million in fraudulent charges from a former director in the department.

OEMS is currently part of the Virginia Department of Health and oversees funding and programming for Virginia’s emergency medical services. This includes purchasing and maintaining equipment and ambulances as well as training first responders. As a result of financial issues in recent years, some trauma centers have received state funding late.

Key findings in the audit revealed in a presentation on Wednesday included multi-million dollar contracts that bypassed state procurement rules by being routed through a Regional EMS Council and dedicated rescue squad funding used to cover costs for a symposium, inflated operating expenses and EMS-related technology. Seven laptops were purchased outside of procurement processes and have since been lost, the audit revealed.

The audit also showed that the office purchased shuttle vehicles to transport fire and rescue squad members to a symposium they attended previously, along with $9,000 spent on alcohol.

With this year’s symposium having since been canceled, Winchester Fire and Rescue Chief Jon Henschel was frustrated by the missed learning opportunity for paramedics and other first responders. It’s just one of the “negative impacts downstream,” he said in an interview.

Virginia Department of Health Commissioner Karen Shelton requested the audit when she noticed irregularities last year.

One piece of the $33 million  puzzle has included Adam Harrell, a former director in the office, pleading guilty to embezzlement of over $4 million. The report confirmed that he used one of the Regional EMS Councils to pay a fraudulent company he owned.

In reflecting on the past year during the audit presentation Sept18, Shelton said that Harrell was able to “use and abuse (his) OEMS position of power.”

Shelton and Chief Operating Officer Christopher Lindsay noted changes the department has made in the past year to improve accountability and avoid errors.

“This year has been a difficult year for all of us,” Shelton said.  “As we have processed these financial deficits as well as the fraudulent activity, we’ve put in place measures to prevent this from happening again.”

OEMS has held regular briefings with VDH, they said, and a new director is being hired who will sign off on expenses. Contracts that were previously handled by Regional EMS councils have been centralized back to OEMS or canceled.

Additionally, revamped procedures now ensure that dedicated funding is dispensed properly and there are set benchmarks for recipients.

“We have changed the way that we will pay out money to trauma centers in the state,” Lindsay said. “We’re moving from an annual payment to a biannual payment.”

VDH had also tapped consulting firm Fitch & Associates to compile recommendations for OEMS’ future operations.

“There were no checks and balances within the system,” said Todd Sheridan, who presented on behalf of the firm. In the first week of his company’s review of the department, he said that they found roughly 500 unpaid invoices.

He also listed several of more than 60 reform recommendations that the department could take.

Ideas include reorganizing OEMS’ leadership structure and creating a dedicated business operations manager to consult on financial decisions.

Sheridan noted other potential configurations that would put OEMS under other departments instead of VDH, which would require state legislation.  Those options included merging the state emergency department with the Department of Fire Programs or OEMS establishing itself within the Department of Public Safety. Another option, he said, would be disbanding OEMS altogether and allowing other departments to absorb its duties.

Another idea was to reduce Virginia’s 11 Regional EMS Councils to seven (it was a regional council that Harrell pleaded guilty to routing fraudulent payments through). The councils were created through state code to address region-specific needs for emergency responses.

Virginia’s Regional EMS Councils Director’s Group handed out white papers at the meeting that contextualized their stances. The group advocated for continuing with 11 councils and codifying dedicated funding for the regional councils to use. The papers also noted the group’s support for stricter oversight mechanisms for VDH and OEMS to prevent financial mismanagement.

by Charlotte Rene Woods, Virginia Mercury

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