“State audit outlines apparent criminal activity at Trenton methadone clinic”
by Penny Ray Link to original source
New Horizon Treatment Services owes the state more than a quarter of a million dollars after an audit revealed that several of the agency’s reported costs were not substantiated, while other costs were overstated according to contract guidelines.
The audit also highlights apparent criminal activity, including the falsification of salaries and wages on government grant forms.
The audit revealed other alarming facts as well:
- New Horizon is hiding unused state money in bank accounts that are not being reconciled.
- New Horizon violated state wage and hour laws, as well as the False Claims Act.
- Several of New Horizon’s reported purchases were not supported by vendor invoices or receipts.
- The agency reportedly spent more than $18,000 for a holiday party, but then claimed the expense as Materials and Supplies, as opposed to Fringe Benefits on government grant forms.
- And the agency reportedly loaned its Board of Directors President $5,000, but the “promissory note” for the loan was dated more than a year prior to the payment being made.
New Horizon Treatment Services is a non-profit organization that provides medical, clinical, psychosocial and educational services primarily to clients who struggle with substance abuse. The Division of Mental Health and Addiction Services (DMHAS) began an investigation of New Horizon’s financial records last year after state officials conducted a routine audit and found something that prompted a full fiscal review. According to a spokesperson with the Department of Human Services (DHS), the audit lasted at least six months.
The Trentonian obtained a copy of the audit report through a public records request, and an accompanying letter shows that it was sent to state officials as well as several of New Horizon’s directors in July.
The report also states that when auditors questioned what caused the blatant mismanagement of state-provided funds, New Horizon’s personnel boldly ignored the inquiries.
According to the report, the state investigation only audited the DMHAS contract for the period of July 1, 2012 to June 30, 2013. The audit only investigated how funds provided by DHS were used for that contract period; it did not include how monies received from other sources were used.
For the contract period, DHS provided New Horizon Treatment Services $1,937,594. The agency’s reported contract expenditures for that period was $1,896,626, leaving $40,968 of unused state funds. According to the audit report, New Horizon never returned that unused money to the state of New Jersey. Auditors also adjusted and reclassified some of New Horizon’s reported expenses, resulting in the agency owing the state an additional $241,878…
“If this organization is lying to the state in order to obtain funds, they’re violating both the state and federal False Claims Act,” Mahany said. “These could also be criminal violations. Healthcare fraud is a federal crime punishable by up to 10 years in prison. Both the state and the feds have a number of tools in their toolbox to penalize and hold these individuals personally responsible, and someone could actually go to jail for this.”