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County awarded $2.1M grant to health center despite financial investigation
Plus: Uptown leaders tout projects in the 'pipeline'; Auto insurers seek 28% rate increase; BofA CEO takes pay cut; Bus driver strike averted; Camp North End restaurants put on hold
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Commissioners say they didn’t know about troubles before voting on funding last month; county staff had said recipients were ‘vetted’
Commissioners voted to award a $2.1 million grant to the C.W. Williams Community Health Center, even after questions surfaced about the clinic’s financial management practices.
By Michelle Crouch
Co-published with North Carolina Health News
Mecklenburg County commissioners voted unanimously last month to give $2.1 million in federal Covid relief money to a local health clinic even after questions surfaced publicly about the center’s financial management.
The decision to award money to the C.W. Williams Community Health Center stunned former employees of the center, who told The Ledger they are cooperating with federal authorities in an investigation into alleged financial mismanagement. WBTV reported the existence of the investigation in October, three months before commissioners voted to award the grant.
“I thought, ‘You have got to be kidding me. They are getting $2 million when they are being investigated for financial improprieties?’” said James Wankal, a former C.W. Williams social worker who plans to speak at Tuesday’s county commissioners meeting.
The grant to C.W. Williams was one of 75 local projects chosen to get some of the final $99 million in pandemic relief money the county received from the American Rescue Plan Act of 2021, or ARPA.
Several county commissioners contacted by The Ledger said they were unaware of the investigation when they voted on Jan. 18 to allocate the money.
They said they were following the recommendation of County Manager Dena Diorio and her staff, which said in a news release at the time that “all projects were vetted.”
“We are researching this, and you can be sure that we are not going to have contracts with organizations that are under federal investigation,” said Commissioner Elaine Powell.
The C.W. Williams Community Health Center is one of only two “federally qualified” health centers in Mecklenburg County, which means it gets significant federal funding to offer medical care regardless of a patient’s ability to pay. It offers primary care, behavioral health services, addiction treatment and more at clinics on Wilkinson Boulevard and Old Pineville Road, although the Wilkinson Boulevard clinic is closed for renovations.
Debra Weeks, the CEO of C.W. Williams since 2015, did not respond to email and voicemail messages left by The Ledger on Friday. She told WBTV in October that the clinic had hired an experienced chief financial officer and was working to improve its financial management practices.
Wankal said he is among at least four former employees who have shared information with agents from the FBI and the U.S. Department of Health and Human Services Office of Inspector General. Both agencies have policies that do not allow them to confirm or deny the existence of an investigation.
Commissioner Laura Meier said she was vaguely aware of the investigation but assumed issues had been resolved when the county staff included the center on its list of recommended projects.
“Anytime they’re asking us to vote, we need full clarity on what we’re voting on,” Meier said. “Unfortunately, it’s the patients who will suffer.”
County manager’s response: The Ledger asked the county manager’s office if it was aware of the investigation when it recommended C.W. Williams for funding.
The county didn’t directly answer that question, but a spokesman sent a statement that opened with:
On Jan. 18, the Mecklenburg Board of County Commissioners approved 75 applicants [emphasis added] for Round Two funding from the American Rescue Plan Act of 2021 (ARPA) and authorized the County Manager’s Office to negotiate contracts with those partners for execution of their proposed projects.
The statement, which emphasizes the approval of “applicants,” differs from the language in the county’s news release from last month, which said the board “has approved funding for 75 local projects.”
Here’s the rest of the statement, which highlights the county’s right to withhold funding if it identifies issues:
That negotiation and due diligence process is currently underway. It includes a deeper dive into the proposals’ budgets (salary, operating, and capital), performance metrics to align with COVID-19 recovery strategies, reporting requirements and claw-back provisions, and a rigorous examination of the partners’ ability to successfully deliver the project. Any issues with a partner or project that surface during that due diligence will be taken into account during the contract negotiation and awarding of funds.
The American Rescue Plan distributed $350 billion to state, local and tribal governments across the country. Under the program’s rules, local entities have until Dec. 31, 2024, to “obligate all funds” and until the end of 2026 to spend the money.
Some local officials nationwide have expressed concerns that the deadline doesn’t give them a lot of time.
Audits identify problems: For the fiscal year ending in March 2021, C.W. Williams’ revenues were $7.6 million, including $5.4 million in contributions and grants, according to its most recent 990 tax form.
Federally qualified health centers are required to have annual audits, which are also publicly available online. In each of the past four years, independent auditors have found “material weaknesses” in C.W. Williams’ financial controls, the audits show.
The most recent audit, from March 2022, identified “significant deficiency(ies)” and weaknesses in the center’s financial reporting and record-keeping. Problems included patients who were not billed for services and “material adjustments” made to financial statements.
“The Organization’s revenue was not properly recognized, and donor restricted net assets were not reconciled,” the auditors said.
In a December 2022 response to the most recent audit, CEO Weeks blamed staff turnover and inexperienced financial officers for the problems.
“We are developing and instituting daily protocols for all aspects of the revenue cycle process,” she wrote.
‘A lot of big red flags’: Heather Piper, who served as the center’s financial account manager for four months before being fired in 2022, identified herself as one of the whistleblowers. She said she has turned over about 500 pages of records to the FBI.
“Within the first two weeks, I noticed a lot of big red flags,” Piper said, adding that she stayed on to collect evidence.
Dr. Denise Finck-Rothman, a physician at the clinic from 2017 to June 2022, said she has also talked to federal agents.
When she heard C.W. Williams was chosen to receive ARPA funding, she sent an email to Commissioner Meier expressing her concerns.
“It seems to me that either our reporting is not being believed or perhaps has not been seen by the Mecklenburg County Board of Commissioners,” Finck-Rothman wrote.
Finck-Rothman said County Manager Diorio left her a message Friday, but they hadn’t connected as of Sunday.
Response from other commissioners: Commissioner Susan Rodriguez-McDowell said she had “major concerns” after hearing about the investigation. “My understanding is that the county manager is taking it very seriously and looking into it,” she said.
Vilma Leake, whose district includes the main C.W. Williams site on Wilkinson Boulevard, did not return messages left by The Ledger. But at the commissioners’ retreat in January, she said she was glad to see C.W. Williams was a recipient of Covid relief money.
“It is growing, and that’s what the community has wanted it to be because of whom it is named for and the people with whom it serves, right in the heart of District 2,” Leake said. “How do we expand that program to do even more than what it’s doing at present?”
Commissioner Pat Cotham said she hadn’t heard any complaints from residents about the center since Weeks took over, and she didn’t want to jump to conclusions.
“Just because someone is being investigated doesn’t mean they’re going to find a problem,” Cotham said. “Even if they have some problems, we do know that they serve people. We know people are getting healthier.”
This isn’t the first time the center’s financial practices have been questioned. In 2014, a wave of financial problems led Mecklenburg County to withhold $97,500 in funding, and C.W. Williams declared bankruptcy.
Weeks was brought in as CEO in 2015 to turn the center around.
Michelle Crouch covers health care. If you have tips or ideas for her, please shoot her an email at firstname.lastname@example.org.
This article is part of a partnership between The Ledger and North Carolina Health News to produce original health care reporting focused on the Charlotte area. For more information, or to support this effort with a tax-free gift, click here.
Today’s supporting sponsors are Landon A. Dunn, attorney-at-law in Matthews:
Upbeat on uptown: Workers aren’t fully back and new development has slowed. But uptown leaders see a bright future
If there’s one place in Charlotte that doesn’t feel back to normal yet after the pandemic, it’s uptown.
Like most of the country’s central business districts, hybrid work has left Charlotte’s urban core emptier than in 2019. (In Charlotte, the latest figures show trips to work are about two-thirds of pre-Covid numbers.)
Now, because of higher interest rates and economic uncertainty, new development projects have slowed. New office construction starts in the Charlotte region in the second half of 2022 hit their lowest levels in 10 years, and starts of residential construction are down, too.
Uptown leaders, though, say they’re looking on the bright side and that they are encouraged by plans for projects that have been announced but haven’t yet started construction. They say there are 3,100 apartments and 2 million s.f. of office space proposed in uptown, and that if you throw in nearby South End, the 2020s could set development records if all that is eventually built.
Charlotte Center City Partners, which promotes uptown and South End and administers special taxing districts in those areas, released its annual “State of the Center City” report last week. CEO Michael Smith discussed the future of uptown with Ledger editor Tony Mecia. Remarks were edited for clarity and length:
Q. You just put out your annual “State of the Center City” report, and I'm reminded of those presidential State of the Union addresses where they always start off and they say, “The state of the union is strong,” and everybody stands up and cheers. Is the state of the center city strong?
Yes. This continues to be a period where center city Charlotte is defining itself as one of the most dynamic places in North America. We’re challenging the next tier of cities.
And that’s exciting, because we’re a vibrant place that that is competing well. In this kind of city-building genre, momentum is everything. And it’s not, “Oh, look at the momentum we’re creating this year.” It’s decades of momentum. Part of what you’ll get looking at this report is that we are all part of a city that is a heck of a franchise. I mean, dynasty kind of numbers.
Q. What is the outlook for office construction? These trends are playing out all over, but office construction starts slowed down toward the second half of last year. There have been a number of projects in South End and the center city that have been announced but haven’t broken ground yet. What are you sensing as the momentum there on office?
The key to us is land assemblage, design announcements, the creation of pipeline and knowing that there’s going to be some of them that will be done on a speculative basis, and in this part of the cycle, and some will extend across the balance of the decade.
And if the stuff that’s been announced is built between now and 2030, we're going to be thrilled with the kind of decade that we had. It will be better and stronger than the 2010s, which was our most prolific decade of growth.
Q. It sounds like you're taking the long-term view. Covid was obviously a rough patch. I still don't think most people would say uptown is back to where it was before Covid. You seem to be saying that if you look at the trend line, that that’s going to continue moving the right direction.
You have to look across cycles, because so many projects begin in one cycle and end in another. The institutional investors that do this kind of work have to be so smart, so patient, and so well-financed, because they’ve got to go through big changes in capital costs, labor shortages, supply chain and everything that we're seeing that makes it hard.
I’d love to drop one idea with you: You said just a moment ago that center city is not back to 2019. And we spent a lot of time over the last three years doing dashboards on what’s coming back and how we’re doing relative to 2019.
But we’ve really come to the understanding that we’re not competing against 2019. We’re competing against Austin and Nashville and Denver and Atlanta. And that’s where we think we’re competing really well.
Q. What are the hopeful signs? What are some of the highlights of projects that are coming?
Number one, there are some real bright spots that we’re excited about: the maturation of South End as an extension of the central business district. I’ve got folks calling me from all around the country and going, “OK, I know what uptown is. What is this South End that I keep hearing about?” And it just puts Charlotte into so many more conversations.
There are 10 transformative sites that we’ve identified that are really big in scale, and any of our competitors in another market would kill to have two or three of these. And it’s the scale of the Iron District, the North Tryon district, The Pearl, Gateway Station, the Charlotte Transportation Center, Brooklyn Village. That whole area of Carson and Tryon, where you’ve got the Queensbridge project, but you also have the Crescent project. On South Boulevard, you have Central South.
These are the context for tomorrow’s development. They will be very attractive for institutional investors. One of Charlotte’s super strengths since about 2009 is being able to bring national capital into our market to help us renovate, develop, own, manage. But then also these are projects that will do very well across economic cycles.
Related Ledger articles:
“Developers hit pause on new apartments” (Dec. 14, 2022)
“Charlotte’s commercial real estate cools off” (June 10, 2022)
BofA CEO takes pay cut
Don’t feel too bad for him, but Bank of America’s CEO took a pay cut last year.
The Charlotte-based bank said in a securities filing on Friday that CEO Brian Moynihan received total compensation of $30M for 2022, down from the $32M he received in 2021.
The filing didn’t explain the change in pay but said that the bank’s board “acknowledged the Company’s continued success in 2022 and Mr. Moynihan’s leadership under this operating model, particularly in this period of considerable economic uncertainty.” In 2022, the bank’s profits decreased, and its stock slid 26%.
Moynihan’s pay consisted of $1.5M in base salary and $28.5M in stock. Bank of America is Charlotte’s fourth-largest employer, with about 15,000 local workers, according to the Charlotte Business Journal’s Book of Lists. —TM
Auto insurers seek 28% rate increase in N.C.
The cost of car insurance could be skyrocketing soon, with a group of insurance companies pressing the state to allow rates to go up by 28%.
The request, which requires approval from the N.C. Department of Insurance, stems from what insurers say is higher costs of car repairs. Insurers don’t always get the full rate increases they seek: In 2019, they sought a 7.6% increase but wound up with only 1.6%. Last year, homeowners insurance companies sought a 42.6% increase but wound up with only 9.9%.
Insurance Commissioner Mike Causey said the insurance department would investigate the request. Any changes would take effect Oct. 1. —TM
You might be interested in these Charlotte events: Networking breakfast at TopGolf; Three Bone Theater play
From The Ledger’s events board:
TUESDAY: Coffee and Breakfast with the Chamber, 8:30-11 a.m., Topgolf Charlotte University, 9110 Drivers Way, Charlotte. Join the Charlotte Area Chamber of Commerce for coffee and a hot buffet breakfast at Topgolf in University City. Networking and a special update from University City Partners, followed by Topgolf bays open for gameplay. Free.
FEB. 10-FEB. 25: “Andy and the Orphans” play, by Three Bone Theatre. 8 p.m. Thursdays, Fridays and Saturdays; 2 p.m. Sundays. The Arts Factory at West End Studios, 1545 W. Trade Street, Charlotte. Join Three Bone Theatre for the Charlotte premiere of “Andy and the Orphans,” a rollicking ride that proves it’s never too late to follow a new road. It’s the first play on- or off-Broadway to feature a character with Down syndrome. Tickets are $25 online or $30 at the door.
Bus driver strike averted: Charlotte Area Transit System bus drivers voted 204-11 to approve a new contract after weeks of strike threats. The contract includes raises of $3 an hour, better pay on weekends and evenings and improved health insurance, a source told WCNC. (WCNC)
Shot fired at Northlake Mall: Police say they believe a shot was fired inside Northlake Mall on Sunday afternoon, following a dispute between two people. The incident prompted the closing of the mall for the rest of the day. Nobody was injured by gunfire. (WBTV)
South Carolina moves to front of election line: The Democratic National Committee approved an election calendar for 2024 that gives South Carolina the first sanctioned presidential primary, ahead of traditional early states Iowa and New Hampshire. It would be Feb. 3, 2024. (NPR)
Restaurant plans paused: The owner of acclaimed restaurant Leah & Louise is holding off on plans to open four new restaurants at Camp North End that had been announced a year ago. BayHaven Restaurant Group cited a “changing economic climate and construction costs.” Camp North End said it would continue looking to fill the spaces that the restaurants would have occupied. (Biz Journal, subscriber-only)
Low bonds criticized: The president of the Charlotte-Mecklenburg Fraternal Order of Police criticized local judges for setting bond amounts too low for violent and repeat offenders. He said the message is “our jail cells are open” because “there’s no real protections in place when a violent crime has occurred to ensure that these offenders are where they need to be.” The criticism follows the quick release of a 47-year-old repeat offender charged with felony stalking and assault with a deadly weapon. Judge Jennifer Fleet had set his bond at $5,000. (WBTV)
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Executive editor: Tony Mecia; Managing editor: Cristina Bolling; Staff writer: Lindsey Banks; Contributing editor: Tim Whitmire, CXN Advisory; Contributing photographer/videographer: Kevin Young, The 5 and 2 Project