Press Release  Bump Urges Gandara Mental Health Center to Strengthen Financial Management

Boston — Auditor Suzanne M. Bump today released an audit of Gandara Mental Health Center in West Springfield, which identified deficiencies in the agency’s oversight of issues related to client finances, inadequate protections over its own finances, and a lack of oversight on decisions involving staff, board members, and related organizations. Gandara Mental Health Center is a non-profit organization that contracts with state agencies to provide residential, mental-health, and substance-abuse-related services to children, adults, and families throughout Massachusetts.

The audit found that inadequate protections resulted in a theft of more than $45,000 in client funds. In addition, the audit found that Gandara did not conduct required evaluations of its clients’ ability to manage their own money. Bump called on Gandara to ensure adherence to new policies for protection of client funds.

“As a government contractor, Gandara must meet its obligations to both its clients and the taxpayers,” Bump said of the audit. “Client funds, as well as taxpayer dollars must be accounted for and used according to the rules. I am pleased that Gandara has cooperated with this audit and recognizes the important of accountability.”

In response to the audit’s findings, Gandara noted that they are now adhering to policies regarding oversight of client funds. They also indicated that the employee responsible for the theft has been terminated and prosecuted, and all clients have received restitution for these funds. Additionally, they stated that they are now in compliance with required evaluations of clients’ abilities to manage their own funds.

In addition to the findings related to the security of client funds, the audit also found that the agency:

• Did not seek multiple bids when it awarded a $286,600 contract for consultant services from a company whose president later became a board member of Gandara;
• Had inadequate protections over cash used to cover expenses at their residential houses;
• Charged the Commonwealth interest expenses it incurred on borrowed funds that it provided to another organization, which is prohibited under state contracts;
• Could not document that it annually evaluated the performance of their executive director or voted to approve his salary increases or a bonus he received; and
• Did not have lease agreements on file for five properties it was leasing from Hispanic Resources Inc., an organization related to Gandara Mental Health Center through shared board membership and other real estate-related business transactions.

This audit was conducted as part of the Office of the State Auditor’s (OSA) ongoing efforts to audit human-service contracting activity by state agencies and promote greater accountability, transparency, and cost-effectiveness in government.

The Gandara Mental Health Center audit is available here.

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