January 8, 2010

State faulted on Rosewood shutdown

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By Andy Rosen
Andy@ MarylandReporter.com

State auditors have released a report that criticizes several aspects of the closure of the Rosewood Center in Baltimore County, just days after a spending panel approved the sale of the former mental health campus to Stevenson University.

The Office of Legislative Audits made the report public on Thursday, though it was completed on Dec. 22. Its findings center on several issues at Rosewood before it closed in July.  Among other things, auditors found that the center did not have a proper inventory of its equipment before it closed, and still can’t account for some of it. Auditors also questioned whether employee gift cards were properly distributed.

The inspection “disclosed deficiencies that precluded effective financial control over the Center’s closeout process with respect to equipment, bank accounts, and certain donated funds,” Legislative Auditor Bruce Myers wrote in a cover letter to the report.

Thursday the state’s Board of Public Works cleared the way for the Department of Health and Mental Hygiene to sell the facility to Stevenson. Terms of sale, including price, were not available prior to or immediately after the decision.

In a response on behalf of the shuttered center, the department said that it will institute better control over inventory and spending at facilities that are closed in the future, and would try to account for more of the money and equipment that the auditors questioned.

The report says Rosewood last did an inventory of its equipment in fiscal 2007, before the state decided to close the facility. Because of that, the auditors questioned whether it had a grasp on what was there as it shut down.

Close to 3,000 items worth nearly $2 million remained at Rosewood when it closed, according to the report. During the audit, the inspectors asked for 10 items as a “test,” which revealed that “four items, totaling $18,301, could not be located.”

“The center’s management advised us that this equipment may have been transferred to other Department of Health and Mental Hygiene units, but it could not provide us with documentation to substantiate the transfers,” the report reads.

Auditors also asked for a better accounting of $580,000 that was donated to the center, and found that Rosewood still had some money that was given to it by clients. The center is giving most of the money back to the clients who paid it, and the remainder to the state comptroller’s office.

The audit also criticized the state’s use of gift cards as employee incentives. According to the report, Rosewood officials used a credit card to buy 254 gift cards worth $6,350. The center could not account for each of the gift cards, which auditors say makes it hard to determine whether they were used for the stated purpose.

Comptroller Peter Franchot’s office banned the purchase of gift cards using state corporate credit cards last year.