News Photo by Kayla Wikaryasz On Tuesday, the District Health Department No. 4 (DHD4) is seen meeting at the DHD4 building in Cheboygan. The main topic of the meeting was an overview of the department’s financial challenges.

CHEBOYGAN – Denise Bryan, District Health Department No. 4 (DHD4) administrative health officer, told The News on Tuesday that she believes close to $1 million of health department funds have been lost. Bryan said she cannot disclose an exact amount until a department audit has been completed.

The DHD4 health board and leadership team began their regular monthly meeting on Tuesday by addressing pressing financial challenges that have led to employee layoffs and further pressures on the department.

Bryan disclosed details pertaining to the causes of their financial challenges, citing “willful and reckless” negligent actions per the former financial director’s oversight. Bryan noted a series of misreporting to the state level as probable cause. However, Bryan said they are still reviewing their current situation.

In all, Bryan said that their misreported funds may be equal to $1 million, though she is unable to give an exact amount until she sees a completed audit. Thus far, Bryan told the board that she has seen a first draft of the aforementioned audit.

Amid these financial challenges, DHD4 has currently laid off three employees including Nicholas Modrzynski, the previous emergency preparedness supervisor, and Kendra Bartz, the previous human resources director. Bryan disclosed to the health board that the most recent layoff has been an employee in the finance department. Bryan explained that this employee was a recent hire.

Bryan outlined a series of events that have led to the health department’s current financial woes.

According to Bryan, the state put a “soft close” on payments to the health department in December when the previous financial director failed to submit required reports to the state.

Bryan explained that when the previous financial director had failed to comply with the state’s intervention, the state put a “hard close” on payments to the health department. Bryan told the board at no point was she informed of these developments.

As a consequence, the health department did not receive state money for operating costs for December, January, February, or March.

Bryan had anticipated COVID-19 funding clawbacks discussed at the June health department meeting. She told the health board she had organized a process with the previous financial director to “set aside that money” and account for it in their financial processes.

Bryan explained that the previous financial director had neglected to do so.

Bryan noted that the department will postpone their audit further, which the previous finance director was supposed to produce by March 15 of this year.

“The auditor thought that an accurate report was better than a delayed one,” Bryan said.

Loyd Peltier, health board chair, told The News in a separate interview last month that the previous financial director had resigned between April and May. At DHD4’s June meeting, Bryan introduced the board to their new finance director, Michelle Konwinski.

Both Bryan and Peltier told the board they are excited and grateful for Konwinski’s expertise as she has begun to dig into the specifics of their financial situation.

Konwinski provided the board with a detailed report of the health department’s “cash flow” to begin straightening out their challenges.

“Get our arms around where we’re at with our cash,” Konwinski said.

Konwinski told the board that the report is not representative of two $100,000 grants that the department is expected to receive. However, Konwinski noted that the grant money should not be budgeted in until the department actually receives what they are awarded.

Bryan added that if the health department receives both grants, the money should sustain the department through these current financial challenges.

Additionally, Konwinski explained that under the direction of the previous financial director, there was not a comprehensive set of protocols or processes to account for revenues coming in. Therefore, with guidance from Bryan, both Konwinski and Bryan are “starting from scratch” to outline proper procedures.

Lucille Bray, an Alpena County commissioner and health board member, asked Bryan if the health department’s current situation is a result of the board. Bray commented that the board had not been given financial reports at the last two meetings. Bryan explained that the leadership team did not have access to those reports after the previous financial director resigned.

“My worry as a board … if we failed, we didn’t ask for this … I didn’t know if that was our responsibility,” Bray said.

Bryan stated that the capability for their current situation falls on the previous finance director.

“No one was raising yellow flags, like ‘This is not right’,” Bryan said. “And make no doubt about it … culpability lies with the CFO.”

Peltier interjected and stated that because full trust was placed in one individual (the previous finance director) it allowed for negligence to continue.

“That’s the key because we were all so trusting of one individual who had financial knowledge that none of us had,” Peltier said. “That was the key that allowed him to get away with this for as long as he did and put us in a dangerously close position to fail.”

Bryan said that if the previous finance director had disclosed to her the developing financial challenges, she would have intervened.

DHD4 covers four counties that include Alpena, Cheboygan, Montmorency, and Presque Isle.

IN OTHER BUSINESS

— Stephan Horton, DHD4 environmental health director, told the board of his plans to hire a new sanitarian for Cheboygan. This person will focus on food safety and slowly transition to well and sewage monitoring. Horton also noted a potential lawsuit by the Michigan Groundwater Association regarding a stop work order the department issued for a “local well driller.” Horton said he believes there is not much ground to the lawsuit but will keep the board updated.

— Dr. Joshua Meyerson, DHD4 medical director, updated the leadership team and the health board of rabies concerns in the DHD4 coverage area. Meyerson explained that DHD4 has not had a positive case of rabies yet this year but that DHD4 is actively monitoring potential exposure cases.

— Nathan Scott, DHD4 IT supervisor, noted that Microsoft is rolling out corrective updates to their systems.

Kayla Wikaryasz can be reached at 989-358-5688 or kwikaryasz@TheAlpenaNews.com.