Kern Health Systems dumps attorney
| Thursday, May 13 2010 04:57 PM
Last Updated Thursday, May 13 2010 04:57 PM
Continuing on a path of reform begun earlier this year, the Kern Health Systems board voted Thursday to fire the agency's longtime attorney and replace him with the legal team at the Kern County counsel's office.
The board voted 6 to 2 to end Kern Health's relationship with Sacramento attorney Mark Wasser. Two board members were absent and one seat remains vacant.
Wasser, who has represented KHS for more than a decade, did not appear pleased by the outcome of the vote.
He asked board Chairman Paul Hensler if he expected Wasser to continue representing KHS until an orderly transition could be made in late June.
"Yes, that would be my expectation," Hensler said.
"It would not be mine," Wasser answered pointedly.
Instead, Wasser suggested his termination might be effective immediately -- and for a few moments that seemed like a distinct possibility.
"I don't want to have someone representing this board that doesn't want to represent us," said new board member Gordon Tanner.
But Estela Casas and other board members argued an orderly transition -- of legal duties and documents -- was in the best interests of the local Medi-Cal agency.
Casas, who is also an attorney, suggested that Wasser has an ethical duty to assist in the transition.
In the end, it was determined that the termination of Wasser's contract requires 30 days notice. So Wasser quietly agreed to stay on for 30 days, which should include next month's board meeting on June 10.
'HALF THE PRICE'
"This is huge," board member Al Wagner said after Thursday's meeting. "With the county counsel, we have someone in the community, someone who knows KHS, someone who can provide the protection we need -- at half the price."
The county counsel's office will charge slightly more than $150 per hour, significantly less than the $290 per hour Wasser charges. In addition, Wasser bills for his travel time from Sacramento, plus hotel and per diem charges.
According to KHS Compliance Officer Clayton Carlos, Wasser was paid more than $57,000 in the first four months of 2010.
County Counsel Theresa Goldner, who was present at Thursday's meeting, said she is "pleased and happy" to represent KHS.
But first she will have to get official approval from the Kern County Board of Supervisors. It was supervisors who originally suggested the county counsel's office would be a good fit at KHS, which had been under intense public scrutiny for uncontrolled spending and lack of transparency. So the approval of supervisors is probably a given.
Wasser was at the legal helm at KHS in 2008 when KHS Chief Executive Carol Sorrell signed a contract with Santa Ana-based Allied Management Group that would eventually cost taxpayers close to $8 million for an investigative audit conducted by Allied.
The contract, which was open-ended and included no dollar limit, has been the topic of much criticism by county supervisors and Bakersfield residents since The Californian broke the story late last year.
A "CLEAN" AUDIT
In other business, the board received a report on an audit of KHS finances for calendar year 2009 conducted by an independent CPA firm in Bakersfield.
"It's what's known as a clean opinion, the best you can get," Chief Financial Officer Keith Quinlivan said of the audit.
Apparently, all the numbers added up. And with $74.6 million in net assets, the agency's financial position is strong.
"We are so liquid," Quinlivan told the board. "We have a lot of cash, a lot of money market investments."
The report recommended tightening procedures on contracts, but reserved any judgment on operational flaws that may have led to runaway spending in 2008 and 2009.
The auditor noted Kern Health is undergoing an extensive review of its policies and procedures. One policy change this year requires the KHS board to approve contracts valued at $10,000 or more.
In its report, the local auditor recommended that at least one KHS board member sign the contracts in order to "leave a paper trail of authorization." The accounting firm also suggested the policy be extended to include settlements of disputes with providers.
The KHS board approved those additional protections Thursday.
OTHER ITEMS
The county of Kern's ethics guru, Compliance and Accountability Officer Carl Breining, was again in attendance Thursday. Breining has been instructed by the Kern County Board of Supervisors to look at every component of KHS, report back to supervisors and make recommendations for improvement.
He is examining the organization's procurement process and accounts payable from the moment an invoice is received to the moment a check is cut and mailed.
He told the KHS board he expects to present his final report to supervisors around the end of May. His report will likely be presented to the KHS board in June.
And finally, KHS board member Kyle Terry, a physician with a practice in northern Kern County, announced Thursday that he will soon be leaving the state.
His resignation from the board will become effective June 30.
