Feds Want Alabama to Repay $5.7 Million in Disaster Funds

January 5, 2009

State officials are disputing the federal government’s claim that Alabama should repay $5.7 million it received for disaster preparedness.

The government reimbursed Alabama for the millions it spent for its Bioterrorism Hospital Preparedness Program that was part of a federal project administered by state public health officials.

The inspector general’s office at the federal Department of Health and Human Services conducted a routine audit of claims paid to the state for the program between Sept. 1, 2004, and Aug. 31, 2006.

Inspectors are questioning part of the $6.2 million that was paid to the Alabama Hospital Association, a statewide trade organization for hospitals, health systems and related companies.

They say the money was put in an interest-bearing account by the association, and $5.7 million was not actually spent on the intended goods and services before a program deadline.

The inspector general’s office has since recommended to the federal Department of Health & Human Services that the money be repaid along with interest. The state did repay the federal government about $200,000 in interest, but contends the money was properly spent.

A spokesman for the inspector general said their auditors go by the letter of the law and their recommendations are subject to review and revision.

State Health Officer Don Williamson said public health officials worked closely with federal officials and there was never any concern raised about a deadline for spending money.

He said the state spent the money when it wrote the check out to the hospital association, and that met the deadline. The state needed the association for a project of that magnitude, and by state law, the association had three years to fulfill its obligation to spend the money after getting the check, he said.

“They had 626 contracts they were trying to administer with these dollars,” Williamson said.

The money was spent for things like antibiotic stockpiles for 50 hospitals, trailers to handle emergency casualties and medical equipment.

“What is really troubling about this is what the hospital association did was exactly what it was supposed to do,” he said. “There’s no money missing. Nobody stole any money. It’s all because the hospital association couldn’t get things done in the time that now the IG is saying it should be done by. It was never an issue at the beginning of the grant.”

He said his staff is still writing a response to the audit and is hopeful the agency won’t have to refund the $5,711,145.

“That would be a tragedy of the first order, since every dime of that was spent for exactly what the program intended it to be spent for,” he said.

The inspector general’s spokesman said the next step is for the federal agency and Alabama’s Department of Public Health to negotiate a settlement.


Information from: The Birmingham News,

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