DDSN Board Reacts after Nerve Story on State Investigation

August 16, 2013

Investigative Reports

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AutismA day after The Nerve revealed details of an investigation into the alleged mishandling of public funds received by the nonprofit South Carolina Autism Society, the governing board of a state agency that was part of the probe moved to review related policies and practices.

The Department of Disabilities and Special Needs (DDSN) Commission on Thursday approved a motion by Commissioner Deborah McPherson of Columbia to have an agency staff or committee review of:

  • A finding in an investigative report by the S.C. Office of Inspector General (OIG) that expenses incurred by the West Columbia-based Autism Society (SCAS) for service coordination and information-referral services with DDSN exceeded program revenues provided by the state agency by a total of $385,392 for fiscal years 2010 through 2012;
  • Whether there is an agency policy that addresses conflict-of-interest situations in which the head of a private provider of DDSN services also is a member of another provider’s board. The Nerve’s review of recent federal tax records show that the late Craig Stoxen served on the board of the West Columbia-based Babcock Center, a nonprofit DDSN service provider, while president of the Autism Society (“I think that is a conflict of interest,” McPherson said during the meeting.);
  • An agency policy dealing with competitive funding for special-service contracts to statewide consumer- and family-support networks; and
  • Differences in “administrative standards” between county Disabilities and Special Needs (DSN) boards and private providers.

“I just don’t have a lot of confidence right now given what we’ve reported in that (OIG) report,” McPherson told fellow commissioners before making her motion. “It’s great for us to feel like things are fine, but I don’t feel real comfortable. I feel like we need to go back – just like the other agencies – to ensure what we have in place is the best we can do for our families.”

The DDSN Commission openly discussed the OIG’s findings and recommendations  – though only McPherson mentioned the Autism Society by name – after meeting for more than an hour in a closed session for what commission Chairman Fred Lynn of Hartsville described afterward only as “personnel, contractual and legal matters.”

Although she didn’t identify the Autism Society by name, DDSN Director Beverly Buscemi said during Thursday’s meeting that she plans to meet with the “board chair and possibly their executive committee and interim executive director” to “go over some of these concrete things.”

“We already have steps planned to explore those very things,” said Buscemi, who didn’t respond to The Nerve’s written questions on Tuesday about the OIG’s investigation of the Autism Society.

The Nerve on Wednesday first reported  that the OIG’s final investigative report, obtained by The Nerveon Monday, alleges, among other things, that:

  • A former SCAS bookkeeper, who isn’t named in the report, admitted to stealing $5,771 in 2011 and 2012 for her personal benefit by using the organization’s business credit card;
  • The bookkeeper submitted false grant reimbursement requests to the state Department of Education (DOE) and SC. Developmental Disabilities Council (DDC) – a division of the Governor’s Office – resulting in $188,819 in overpayments. The bookkeeper said she submitted the false requests “at the direction” of the SCAS president, who isn’t named in the report, but given the documented timeline, would have been Stoxen;
  • A total of $462,060 in state funds allocated by the DOE and DDC to the Autism Society is unaccounted for; and
  • The SCAS president had an “unusually high salary” (the organization’s 2012 federal tax records reviewed by The Nerve show that Stoxen received $111,615 that year, a nearly 36 percent increase from 2009) and “what appeared to be excessive purchases of technology equipment.”

Besides the OIG report, The Nerve on Monday also obtained a copy of a Lexington County Sheriff’s Department report that said Stoxen, 48, died of an apparent self-inflicted gunshot wound in a room at the Clarion Inn on Chris Drive near West Columbia on Feb. 5 or Feb. 6. The report also said Kim Thomas, the SCAS interim president, told deputies at the time that Stoxen was being audited by the OIG and DOE for “misuse of funds.”

The OIG’s investigation found that none of the $1.4 million provided to SCAS by DDSN for fiscal years 2010 through 2012 was unaccounted for, noting that the service-coordination program “appeared to be well managed” by DDSN. But the Autism Society likely used the unaccounted-for payments from DOE and DDC to help cover deficits incurred in DDSN programs, the report also said.

During Thursday’s meeting, Buscemi and Lynn pointed out that the OIG gave high marks for DDSN’s contract-monitoring system. But McPherson wasn’t satisfied.

“I know that’s what the report said, but I don’t feel very comfortable when the report also indicated that falsified reports were filed with other agencies, and also, documents were shredded,” McPherson said.

The OIG report obtained by The Nerve said, “Troubling too were reports the President reluctantly fired the former bookkeeper only due to her fraud being known by fellow employees, and subsequent to her dismissal, the president shredded a large volume of documents, which was an unusual activity for him.”

Despite some differing opinions expressed during Thursday’s meeting, however, McPherson’s motion passed on a voice vote with no opposition.

DDSN serves persons with “intellectual disability, autism, traumatic brain injury and spinal cord injury and conditions related to each of these four disabilities,” according to its website. Under state law, its commission is made up of seven members appointed by the governor to four-year terms, with consent of the Senate.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.