Director John Hostetler confirms he gave employees holiday bonuses of $100 or less without board ok.
By Lauris Olson
AmesNewsOnline
(May 8, 2012 – 4:15 p.m. ) Story County Supervisors decided today to ask the state auditor for advice on how to handle their growing questions about the Richmond Center’s use of special funding.
Use of the money came under fire during the supervisors’ discussion on the overdue status of the financially strapped community mental health agency’s Fiscal Year 2011 audit. The audit was supposed to be provided to the county and the three other entities that make up the Analysis of Social Services Evaluation Team (ASSET) funding consortium by Jan. 1.
“I think we are getting the runaround.” said supervisor Rick Sanders. “Here we are going into a another year and I don’t think we are going to get anything. I think it is time to call the state auditor to come up and meet with us. I don’t feel good where things are. I don’t trust them.
“I’ve heard unofficial rumblings that the director of the Richmond Center paid big bonuses to the staff last year without getting board approval.”
But John Hostetler, executive director of the Richmond Center and the agency which manages it, Community and Family Resources (CFR) , told AmesNewsOnline that the “big bonuses” paid at the end of the year were really just small holiday bonuses.
“There were about 130 employees – most who provide services to clients in both the Richmond Center and CFR, not just a few at the Richmond Center as the rumors are saying,” said Hostetler.
“Full-time employees got $100. Part-time employees got $50 and employees who are PRN, working only when needed, got $25. I received nothing.”
In all, the amount was about $11,000, said Deb Schildroth, director of the county’s Community Life services and the county’s representative on the ASSET administrative team.
Schildroth said that January meeting minutes from the Community and Family Resources/Richmond Center joint board showed that Hostetler had been reprimanded for failing to get board approval prior to distributing the bonuses.
Community and Family Resources took over management of the Richmond Center in 2008 after the agency found itself within two weeks of being insolvent without any ability to borrow operating funds.
Schildroth said the minutes report that the board went into closed session and “told them he shouldn’t have done this and not to do this in the future.”
“Did I do it without board approval, yes,” said Hostetler. “This is something we had done in the past, not all the time but several times. They are tokens of appreciation for all the hard work over the year. Somehow, the bonuses didn’t get put on the board’s December agenda, so I decided to go ahead.
“I was formally reprimanded, which I think was appropriate under the circumstances.”
Story County has allocated about $120,000 above client service fees to the financially strapped center over the last three years. The center said it needed the funds to help cover payroll, pay for updated technology and fund staff recruiting and retention efforts.
The City of Ames and United Way of Story County also provided money to bolster the community mental health agency’s efforts to keep operating. Ames provided a 25,000 forgivable loan in November, 2008 for technology updates. United Way gave a grant of 44,500, also in 2008.
The county is severing ties with the Richmond Center after the center’s 2013 funding application to ASSET showed a possible operating deficit of $325,000 next year. The financial history also showed that Community and Family Resources had spent up over $500,000 from their reserves on Richmond Center expenses.
The ASSET team reacted by recommending CFR close the Richmond Center and focus on providing its core services of addiction and substance abuse treatment. The supervisors, who fund and allocate Medicaid payments for mental health services for low-income county residents, sought a new mental health agency.
Eyerly Ball, Polk County’s community mental health center, will take over the servicing of county- and Medicaid-paid clients on July 1. The City of Ames, United Way and ISU’s Government of the Study Body, another ASSET funder, are also switching to Eyerly Ball.
Some clients who self-pay or those who have private insurance might be able to still receive mental health services through the Richmond Center/CFR partnership, said Hostetler.
“”We’ve avoided saying the Richmond Center is “closing” because it frightens clients,” said Hostetler. “Plus we will continue providing some services. But the real message I want out there for the clients is that they will still receive services, it will just be somewhere else.”
The county has paid the Richmond Center billings through February. The March, April, May and June will be due later this summer.
Sanders said he was more worried about money that had already been paid than the money the county will still need to pay.
“I am not asking what we are going to do in the future,” said Sanders ‘I am mortified and I want to find out what is going on with CFR.”
He said he isn’t planning on filing a formal complaint with State of Iowa Auditor David Vaudt yet.
“I just want to know how to go forward,” said Sanders “I want to call the auditor and ask to meet with him. I want to invite Ames and invite United Way and have some of our staff there. I want to know what we should do next.”
Hostetler said he has no problem with an inquiry from the state auditor and he believes that the Richmond Center’s accounting firm may have the 2011 audit ready for everyone by the end of the month.
“Have I made some mistakes? I have,” said Hostetler. “But I don’t believe one of them was made related concerning client treatment and care. “
I've no doubt that the
I've no doubt that the Richmond Center staff works hard for their money, are certainly not overpaid, and knowing the financial difficulties their employer was experiencing undoubtedly added to their job-stress.
But when an agency requests, and receives, a $25,000 forgivable loan from the city, and then spends nearly half of that amount on "holiday bonuses" something is seriously amiss. Not to mention that the loan from the city was in 2008, and the financial picture for Richmond Center has only gotten worse in the time since.
With bizarre financial decisions like that, one can't help but wonder how many other poor monetary recommendations Hostetler has made and managed to get board approval. Not that I necessarily think Richmond Center would be financially solvent without him at the helm, but perhaps their debt might be at least a little less?
ASSET Process is Broken
The more I hear about the ASSET process the more I think we are wasting our tax dollars. Heartland has problems, Richmond Center has problems, we pay for many, many small operations who could serve much better if they would consolidate. Clearly the ASSET group has been duped in the past, why should we have any confidence that they have done adequate due dilligence on the Eyerly Ball group coming to take over?
Bullying
Bullying is a popular topic these days. It looks like the board of supervisors is showing us how to do it with the Richmond Center and CFR. They have them down on the ground struggling, then they beat up on them again. The organizations have made some mistakes, but they seem to be trying to provide needed services, including services for dual diagnosis. Yet there is nothing they do that will please the supervisors, especially Rick Sanders. Just a bunch of bullies! Why can't they reach out to them and help, as they do consistently with their own Community Life Program?
Bullying – seriously?
Dear Mr. Anonymous,
A few facts for your information:
1. Story County has paid RC/CFR more than a million dollars in public funds since July 1, 2008.
2. The Supervisors did “reach out to help” and approved an additional $120,000 in emergency funds in 2011 based on John’s assertion that it would stabilize the Richmond Center’s staffing issue and his promise that he would keep the Supervisors completely informed on the use and success of those funds.
3. The Community Life Program endures a line by line examination of it budget and actual spending every month…no other Provider in Story County has that level of ongoing oversight.
4. The Richmond Center is 6 months overdue in providing the contractually required audit to the County.
5. The Richmond Center never provided any reports on the emergency funding as John directly promised prior to receiving the funds.
The idea that asking the Richmond Center/CFR to provide required information is somehow “bullying” or that Story County is in anyway responsible for the complete and gross mismanagement by their Executive Director is ludicrous.
I will be glad to discuss this further. You can reach me at:
rsanders@storycounty.com
or
515-382-7201 (office) or 515-708-0158 (cell)
Rick Sanders
can anyone say "scapegoat"
I think everyone needs to look at this a different way. Without CFR, and their capable executive director, The Richmond Center would have been closed four years ago and many clients that were being served by The Richmond Center would have gone unserved/underserved.
Do you really think that a goodwill gift to employees at holiday time of a measley $100 and in some cases as small as $25 is what caused this entity to fail? I'll tell you what, try having 130 employees and never show them any appreciation for what they do for your business and see how long they stay around. Not to mention the fact that the so-called bonuses were not entirely paid from The Richmond Center funds.
Jumping to conclusions when a service provider fails is a dangerous proposition. It sounds to me like the executive director has become a scapegoat and is being blamed for some things which were out of his control. Much like the manager of a professional baseball team gets blamed for the failing of the team to win when the ownership ties one hand behind his back by limiting the funds available to get the best players.
It is not always the manager's fault. Sometimes, it is simply impossible to get all of the parts of the team aligned to accomplish the goal.
"I'll tell you what, try
"I'll tell you what, try having 130 employees and never show them any appreciation for what they do for your business and see how long they stay around."
Given the unemployment figures the past couple of years, one would hope that people who already had a job would understand how lucky they were to have a paycheck and not been foolish enough to quit because they didn't get a $100 "Christmas bonus" their employer didn't have.
"Not to mention the fact that the so-called bonuses were not entirely paid from The Richmond Center funds."
How does that matter? In fact, if anything, it makes it worse! The Richmond Center had been operating in the red for several years. Basic Finance 101 says that you don't hand out bonuses if the company check-book is overdrawn.
scapegoat
You fail to understand the point of the fact that the money didn't come all from the Richmond Center. The point is, the uproar is about $11,000 paid to 130 employees. Some of these employees only work a portion of their time for The Richmond Center and a portion for Community and Family Resources. Point being, this was not all a Richmond Center expense and did not all come from Richmond Center funds, so the Richmond Center issue is substantially smaller than $11,000.
As for employees being happy to have a job - I am sure they are. But do you think they will put forth any extra effort if they feel their work is going unappreciated? Many of these employees are likely educated and skilled in areas that cannot be replaced easily. Just because there is unemployment in Iowa, doesn't mean that the available workers have the correct skill set to do every job that may be available.
I would challenge people to take a look at Guidstar.org and check out the Form 990 filed by Community and Family Resources. I have, and if the gross mismanagement was actually happening, I would expect to see the entity losing a substantial amount of money. However, they showed a fairly healthy increase in net assets for the year ended June 30, 2010 (the latest year currently available). Maybe people need to dig a little deeper before throwing the manager under the bus.
I don't "fail to understand"
I don't "fail to understand" anything from your post.
If "the entity" was doing so well, why is Richmond Center closing? Why have they had to continually borrow substantial sums of money to remain open this long?
I don't care if "the Richmond Center issue" was only $200. You don't hand out bonuses when the company checkbook is already way overdrawn.
John Hostetler was formally reprimanded for giving out bonuses without board approval. He, himself, said, “I was formally reprimanded, which I think was appropriate under the circumstances.” So, if what he did was justified and a sound financial decision, why is he agreeing that it was "appropriate" for him to be formally reprimanded? Why would the board go into closed session and tell him “he shouldn’t have done this and not to do this in the future” if there was enough money to pay these bonuses and it was a good idea? And why would Hostetler admit that he's "made some mistakes" (outside of patient care) if this was all just a case of scapegoating?
I think it's more likely that you "fail to understand" the point of Rick Sander's post of Thursday, May,17, 2012 at 5:51pm.
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