OC officials decided to give a $ 15 million grant to a beleaguered nonprofit amid warnings against it

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Orange County Health Care Agency officials set aside warnings from a former consultant to a nonprofit organization – whose concerns are shared by two of its board members – that the organization does not have adequate financial oversight to manage a $ 15 million contract project.

Instead, agency officials recommended the contract for approval by county supervisors at their Tuesday meeting, despite the association’s board rejecting the contract.

Then, without explanation, at the end of last week the health officials transferred the proposed $ 15 million non-tender contract from Multi-Ethnic Collaborative of Community Agencies (MECCA) to Orange County United Way.

To justify the lack of tendering, health officials wrote that MECCA was the only supplier that could do the job. In the change of last week, they wrote that United Way is the only group who can do the job. Concerns about MECCA were raised in a letter to the county health care agency by Michael Arnot, a former association consultant who resigned in September.

In his October 27 letter to the agency’s chief compliance officer, Arnot wrote that the executive director of MECCA is two years behind in obtaining an independent financial audit and does not have a chief financial officer.

Arnot also wrote that the group did not have a strong team to oversee the $ 15 million contract and that MECCA’s board members “were kept in the dark about what funding was being provided. it was intended and how it was managed “.

[Click here to read Arnot’s letter, which Health Care Agency officials released in response to a Public Records Act request from Voice of OC.]

[Read: OC Nonprofit Rejects $15 Million Health Grant from County, Citing Transparency Concerns]

The CDC’s $ 15 million grant – administered by the county – aims to address many health gaps across the county.

The pandemic has exposed the health disparities facing underserved communities, with Latin American communities in particular facing a disproportionate number of COVID-19 cases and deaths among county residents. Latinos also face a significant immunization deficit.

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On November 1, MECCA’s board of directors voted against accepting the $ 15 million contract, and two board members echoed Arnot’s concerns in interviews with Voice of OC.

In their written response to Arnot’s letter, county officials said it was not their job to verify the qualifications of a contractor they wanted to award millions of dollars in federal grants.

“The county does not monitor the work history of a vendor’s financial management team or those employed by the vendor,” wrote Chi Rajalingam, Health Care Agency’s compliance manager.

“Although you have raised concerns about the internal workings of MECCA, the issues raised do not appear to prevent HCA from entering into a contract with this supplier at this time. “

[Click here to read the Health Care Agency’s response to Arnot’s letter.]

Arnot says the health agency is abdicating its responsibility for overseeing federal grant dollars, which come from the Centers for Disease Control and Prevention and intended to reduce health disparities from COVID-19.

“I think the [chief compliance officer] have had to go through real contortions to basically say that they are washing their hands of all responsibility for the federal funds entrusted to them, ”Arnot said in a text message last week to Voice of OC.

“I am not sure that CDC and [the U.S. Department of Health and Human Services] would appreciate them taking that position.

He also claimed that the director of the Health Care Agency, Dr Clayton Chau, was leading the way for MECCA to secure the contract, regardless of the many concerns raised.

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Chau did not respond to messages for comment, although the Health Care Agency’s compliance officer did.

“HCA does not manage the affairs of MECCA and many of the issues raised by Mr. Arnot relate to the internal affairs of MECCA,” Chi Rajalingam wrote, in a statement provided through a spokesperson for the MECCA. agency.

“If this contract had been made, HCA oversees contracts through the contracting and procurement departments and they would have overseen this contract as they do with all other contracts with each of our current suppliers, including MECCA. “

Under the proposed non-competitive county contract, the nonprofit MECCA was supposed to receive $ 15 million in federal health grant funds from the CDC and distribute the vast majority to other non-profit organizations. still appointed with the aim of filling various health gaps. throughout the OC.

Community outreach groups like Latino Health Access and the Coalition of Orange County Community Health Centers have been instrumental in providing testing, education and isolation resources to residents of hard-hit communities in County D ‘Orange.

But the financing of this work is often below the needs.

To help close this gap, county health officials received a $ 23 million grant from the CDC – which the county calls Equity in OC – to reduce health disparities among Asia-Pacific islanders. , Blacks, Latinos, people with disabilities, LGBTQ people and the elderly.

County Health Care Agency leaders seek to diversify service delivery, working with smaller community groups to address issues such as food insecurity, the digital divide, security, access to green spaces and participation in society.

But contracts for this grant have been repeatedly postponed since September over questions about how the county proceeded with the selection of suppliers, like MECCA, without a tender.

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Meanwhile, the chair of the MECCA board of directors said she was satisfied with the county’s response.

“I have no control over Mr. Arnot’s continuing assumptions. As a member of the MECCA Board of Directors, I am committed to protecting our staff and MECCA’s good reputation in the community, ”said Gloria Reyes, former President and CEO of the non-profit Abrazar Inc.

MECCA Executive Director Iliana Soto Welty said MECCA used to work successfully for the county.

“I applaud the county’s vision of bringing the county and community together to form partnerships and collectively fight health disparities. We have a lot of work to do to come together, recover and heal from this pandemic, ”she said in a text message to Voice of OC last week.

Regarding concerns about the board being kept up to date with the details, Welty said she briefed most of the board members on the grant in August.

“The majority of the board members were made aware of the possibility for MECCA to be an entrepreneur for the CDC grant in August and gave their support at that time,” Welty wrote in a recent statement.

But MECCA’s vice-chairman of the board, Dr Reza Karkia, says he has not been kept informed.

“He did not come to the board of directors. And all of a sudden, you know, I heard that such a thing was happening, ”he said in a recent interview, adding that he had no idea who would get the money. .

“Personally, I didn’t think our device was strong enough to handle a $ 15 million contract. “

MECCA board member Nahla Kayali also expressed similar concerns in a telephone interview.

“Even when they explained [the $15 million contract]it wasn’t really clear to us, ”said Kayali, executive director and founder of Access California Services, a nonprofit focused on health and social services in Arab American and Muslim American communities. ‘OC.

Among the MECCA board members who voted to decline the contract was Sheriff Don Barnes.

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The Health Care Agency’s response to Arnot and the statement by MECCA’s executive director failed to respond to one of its central allegations – that county health officials colluded with Welty to do not spend all grant funds.

“HCA staff told MECCA’s executive director that they did not expect MECCA to spend all the money for the proposed contract, which they found quite acceptable,” Arnot wrote.

“These funds were intended to reduce infections and deaths from the pandemic and to prepare communities to respond to future crises,” he added. “It is inexcusable that an executive director of a nonprofit organization would collude with HCA not to intentionally spend these much-needed resources when they are desperately needed. “

This struck a chord with the vice-president of MECCA.

“It was a concern for me,” Karkia said. “When a budget line is approved by the legislature, no part of that money should be saved. Everything must be spent for what it meant to go.

Correction: A previous version of the title stated that officials were still in the process of contracting. It has been updated. We regret the error. A previous version of the article also incorrectly identified Gloria Reyes as the current CEO of Abrazar Inc., based on the MECCA website. Reyes is retired from Abrazar.

Nick Gerda covers county government for Voice of OC. You can contact him at [email protected]


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