Department audit

Audit finds psychiatry department honored Corrigan contract

By Mark Nickel

Brown's Department of Psychiatry and Human Behavior delivered more than full value to the Commonwealth of Massachusetts under a professional services contract with the John C. Corrigan Mental Health Center in Fall River, according to an independent audit. The University released the confidential Coopers & Lybrand report late last week to officials of the Massachusetts Department of Mental Health (DMH) and to the media.

Brown's investigation dates to Sunday, Jan. 8, 1996, hours after the Boston Globe reported anonymous charges that Brown's psychiatry department had received payments from DMH for research that had never been done and that Brown had submitted "partially fabricated" invoices. The audit found no support for the Globe's allegations.

"I am pleased that Coopers & Lybrand's report shows Brown University did indeed deliver all that was promised to the Commonwealth of Massachusetts and more, and that Brown actually underbilled for its services rather than overbilled," said Brown Provost James Pomerantz. "We are taking steps to ensure that the billing inaccuracies identified by the auditors do not recur."

The contract was designed to establish a full range of academic and research programs at Corrigan and to do so within five years. Brown asked Coopers & Lybrand to conduct an audit of the Corrigan relationship, focusing on three areas:

Deliverables: What did the Corrigan contract require of Brown's Department of Psychiatry and Human Behavior?
Execution: Did the department fulfill the terms of the contract?
Billing: Did the University bill the state properly for work done under the contract?

Coopers & Lybrand interviewed 21 current and former employees from Corrigan, two Brown-affiliated hospitals and Brown (some of whom were among the Globe's sources), conducted a physical inventory of equipment purchased by Brown for Corrigan and reviewed a large volume of documents including contracts, invoices, agreements, financial statements, memos and other correspondence. Its report made four general findings:

I. The services anticipated by the contracting parties and described in the contract narrative were provided by the department.

The faculty, administration and programs of the Department of Psychiatry and Human Behavior are distributed across several Brown-affiliated hospitals. As part of formal affiliation agreements with the University, these hospitals annually contribute funds to support the core activities of the department, from which the hospitals receive a variety of resources and services.

The auditors determined that the contract clearly described an affiliation agreement. It required that Brown:

Establish Corrigan as a site for the department's psychiatry residents;
Develop a research program to study the longitudinal treatment of various disorders;
Provide biostatistical, academic and support services, including the personnel services of a chairman, resident training director, administrator, research assistant, biostatistical research assistant and research faculty;
Recruit staff for Corrigan, appoint them to the University faculty as appropriate, and monitor and help plan their career development;
Hire, place, supervise and train all residents.

Documentation and the testimony of persons involved showed that all of those services were performed. Daniel Amigone, Corrigan's director, also said patient care improved substantially at Corrigan as a result of the psychiatry department's supervision of medical staff and residents.

II. The department's calculation of the allocable cost of providing services under the contract appears reasonable and exceeds the amount invoiced.

The auditors studied the psychiatry department's calculation of Corrigan's portion of the affiliation costs. The department identified costs that were specific to the Corrigan site and allocated to Corrigan a portion of costs for services distributed to all affiliated hospitals. While the department invoiced Corrigan $78,355 for the 1994 fiscal year, the auditors determined that the Commonwealth of Massachusetts received resources and services worth more than $100,000.

III. The invoice for services provided during the contract year (1994) was inaccurate.

While the services were delivered and the amount was justified, the invoice did not list the correct names of persons who did the actual work under the contract. The auditors attributed the mistake to an inexperienced staff member at Brown and to poor contract administration both at Brown and at Corrigan. With guidance and instruction from the Corrigan administration that the invoice needed to correspond to budget line items in the contract, the invoice was prepared incorrectly by a newly hired administrator, submitted and approved.

IV. There is no indication of improper personal enrichment or diversion of funds by the department with respect to funds received from the Commonwealth.

The auditors determined that funds received from Corrigan were, in fact, treated in a manner similar to funds received from other affiliated institutions. No personal gain or improper diversion of funds occurred.

During their examination, the auditors found a high degree of consistency between the documentation and the interviews with participants and others knowledgeable about the Corrigan relationship. That consistency, plus the failure of any contrary information or testimony to come to light during the audit, led Coopers & Lybrand to conclude that the questions posed by the University have been fully answered.