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MWD-75-89 1 (1975-06-10)

handle is hein.gao/gaobaaefy0001 and id is 1 raw text is: 0~ 15 ESTRICTED - Not to be released outside th Gone Accounting Office exedt10,t the basis of specific apprV by the Office ot Coigressional Relation', - COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, D.C. 20540 B-164031(5) The Honorable Philip A. Hart United States Senate Dear Senator Hart: RELEASED j 0 19 In response to your letters of August 29 and September 4, 1974, we reviewed (1) certain allegations of mismanagement of Federal funds at the Community Health Center in Baldwin, Michigan and (2) the actions by the Department of Health, Education, and Welfare and the P -7lJ 2grantee, Regional Health Care, Inc., to assure the fiscal integrity of P 27S- _-the Center. This Center is being funded primarily by Department grants under section 314(e) of the Public Health Service Act (42 U.S.C. 246 (e)). We obtained information from the local attorney who wrote the letter containing the allegations; reviewed records at the Center; interviewed former and present employees and officials, including officials of the Michigan Department of Public Health; and studied Certified Public Accountants (CPAs') reports on the Center's operations, and discussed these reports with officials of the CPA firms. We also reviewed the Department's regional files in Chicago and interviewed Department officials. As suggested by your office, we did not follow our normal procedure of obtaining official comments on this report. On February 21, 1975, we discussed the results of our review with your office. As requested, this report briefly summarizes the infor- mation we provided. BACKGROUND The Center was funded by-the Office of Economic Opportunity from June 26, 1967, through October 31, 1971. In August 1971, responsi- bility for the Center was transferred to the Department of Health, Education, and Welfare, which has funded it since November 1, 1971. Through October 31, 1974, grants totaling about $10.3 million for support of the Center were awarded to FIVECAP, Inc., a community action program established under section 222(a)(A) of the Economic Opportunity Act of 1964. For the fiscal year beginning November 1, 1974, the Department awarded a grant for about $962,000 to support the Center to Regional Health Care, Inc., a nonprofit corporation established by citizens in the area being served by the Center. The Center offers medical and dental care to residents of four counties in rural Michigan. The principal site is in Baldwin, Lake County, but a satellite is maintained in the other three counties. 090 3F3 MWD-75-89

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