More Delaware opioid grant recipients to be audited as commission members cry foul

Eleven nonprofits that have received grants through Delaware’s Prescription Opioid Settlement Distribution Commission are slated for state audits, according to a letter from state Auditor of Accounts Lydia York.

The Department of Justice in January enlisted York to review opioid grant recipients, and with the assistance of commission and Behavioral Health Consortium staff, the auditor’s office identified 11 nonprofits to audit “based on a risk assessment,” York said in a letter to commission members July 22.

“Assuming full cooperation of the recipients, (my office) expects to have audit reports completed this fall,” she wrote. “We will continue to release further performance audits on a rolling basis.”

The audits will examine grant recipients’ internal controls for effectiveness, efficiency and “ethics of their use of grant dollars” based on the agreements struck for the funding, York explained in the letter shared with Delaware Online/The News Journal on Wednesday

The revelation that state auditors are reviewing more than just Code Purple Kent County – where auditors’ preliminary analysis suggests “potential waste, fraud and abuse of state resources” – comes as commission and consortium members claim that Attorney General Kathy Jennings’ grant oversight concerns are political.

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Delaware lawmakers and opioid grant recipients blasted Jennings for a June 28 letter that warned commission members that the grant program was “rife with potential fraud, waste and abuse” and called for a freeze to new grant funding.

The letter to commission members came after York flagged Code Purple for Jennings on June 12, concerned about potential fraud and misuse of government funds at the Dover organization.

Sussex County Health Commission Executive Director Peggy Giesler claimed Jennings' letter amounted to a politically motivated “witch hunt," according to reporting by Spotlight Delaware .

“There’s an election coming up and I really feel like there’s a misuse of, or an opportunity for, others to want to utilize this,” she said during a recent consortium meeting. “I’m in a place in my career where I just feel like this is not about public good, but about political will.”

While Jennings – who is commission co-chair – is not up for election, Lt. Gov. Bethany Hall-Long – who also co-chairs the commission – is a frontrunner for Delaware’s next governor .

Jennings denied those allegations on Wednesday during an interview with Delaware Online/The News Journal.

“I'm not running for anything, I'm just doing my job,” the attorney general said, adding that her job, among other duties, is to speak up, be vigilant and prevent fraud. “And if my being vigilant is political then so be it, because I'm not going to stop.”

Opioid grant commission staff and Executive Director Susan Holloway declined to respond to questions for this story, directing all questions to the state auditor.

Auditor oversight of grants

In the July 22 letter, York sought to establish a “memorandum of understanding” with the commission to formalize her office’s ongoing efforts to provide oversight of grant recipients.

“This agreement would also provide the (Auditor of Accounts) with the assurance that we are approaching our work in the manner most helpful to the (Prescription Opioid Settlement Distribution Commission) and the (Behavioral Health Consortium) leadership and staff,” York wrote. “We deeply appreciate their help thus far.”

The formalized agreement aims to clear up any questions commission and consortium members may have about the auditor’s oversight pursuits, the auditor said.

In the interview with Delaware Online/The News Journal on Wednesday, Jennings said the nonprofits targeted for audits are a mixture of random selections and referrals.

“It’s not a comment on the grantees at all that they are being audited,” she said. “So many people have died of substance use disorder, and it’s critically important that money goes out the doors, but that it goes out the doors with guardrails.”

Lawmakers, nonprofit leaders defend current system

In recent weeks, state lawmakers and nonprofit leaders have defended the current system for screening applicants and overseeing grant spending.

State Rep. Kendra Johnson called on the consortium to “release the funding” and challenged members to consider whether they wanted to hold up money because of one “potential bad player.”

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“The letter was wrong. The context was wrong,” Johnson said. “Our systems work. How do we know? Because we have one alleged bad actor.”

The disagreements also come during a time when Delaware has finally begun to see overdose deaths decline – the first time in a decade , fueling support for keeping money flowing and preventing internal squabbles from negatively impacting those who need services.

Applicants say the process for receiving an opioid settlement grant is “very extensive.”

Jill Fredel, a spokesperson for atTAcK Addiction, said the application process was detailed and the program’s oversight is “the most stringent reporting system” she’d ever seen for a grant.

“We’ve had to account for every penny we’ve spent,” Fredel told Delaware Online/The News Journal in early July after news broke about Code Purple. “The application process may have dissuaded people from applying.”

Other nonprofit leaders also pointed out that the opioid grant commission’s oversight system worked since it caught the potential fraud at Code Purple. State authorities are trying to recuperate $290,000 given to Code Purple last year.

Jennings pushed back on characterizations that the system worked.

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“When people say the system worked – we're out $290,000 folks. That’s not good,” she said. “And I think we all bear responsibility to fix something that obviously went wrong, to make sure it doesn’t happen again.”

Future oversight, establishing ‘guardrails’

Commission members await a report and recommendations from Wilmington business management firm, Social Contract, which the public body began working with in October. The firm aims to create a strategic plan for grant disbursement, review and allocation of funds. The completed report is expected this fall.

While $1.9 million in bridge grants have been approved by the commission and consortium, Hall-Long reiterated the commission will not move forward with new funding until recommendations from Social Contract are received.

Jennings said the settlement funds were hard-fought, “precious” dollars. The attorney general added she wants to make sure those who receive the grants are good stewards.

“Nonprofits perform an invaluable service in our state; they save lives all the time,” she said. “I want to make sure they are receiving the funds because they’ve shown us that they know what they are doing, they’re really good, they’re dedicated, they’re passionate, and we are partners in this mission. I believe that we can get there, but it needs work.”

That’s why she called for a freeze on grants, Jennings said, so that the contractor can “suggest guardrails and measures of effectiveness,” along with a landscape analysis.

Spotlight Delaware contributed to this report.

Got a tip? Contact Amanda Fries at afries@delawareonline.com. Follow her on X at @mandy_fries.

This article originally appeared on Delaware News Journal: More Delaware opioid grant recipients to be audited as commission members cry foul