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The Nonprofit QuarterlyWho Takes the Fall?
January 12, 2010; Courier-Post | Any organization considering closing a major program should take a look at this story. We can only guess at the back-story but we know there is at least one to tell and unfortunately the situation will have real human consequences. Anyone who has worked in social services for any length of time knows that long-term residential programs that serve addicted women and their children together are critically important to the health of communities and that beds in these programs can be very scarce. Therefore, when we saw this story about the closing of the only program of this type in South Jersey it caught our attention. What we find is an argument between state contractor and a provider about who takes the loss for a recently reduced reimbursement rate. The state, which originally invested more than $4 million in this facility, wants its investment back now that the program has been closed. The organization claims that the closing was unavoidable due to the reduced rates. Meanwhile those likely to take the worst loss from the situation are these vulnerable families formerly served by the program.—Ruth McCambridge

The Nonprofit QuarterlyVermont’s Unused Rainy Day Fund
January 15, 2010
; Bennington Banner | This Bennington Banner op-ed writer makes an interesting point about Vermont’s rainy day fund: he calls for the state to stop “hoarding this money and use(d) these reserve funds as intended. Some 40 states have tapped their rainy-day funds at least a little bit, and 27 have had to tap as much as half or more of their rainy day revenues. What is a rainy day fund supposed to do? It is to prevent harmful cuts in services or provide services to people in need. Apparently, Vermont likes having a rainy day fund that never gets used, going against the grain of most states that are trying to prevent draconian service cuts. The author doesn’t call for diving into rainy-day funds willy-nilly, but during recessions when the alternatives are to deprive needy populations of critical services and support or, as a few states can do, to go into deficit spending modes, there’s no reason not to use some of the rainy day capital during the downturn with the anticipation that the fund can be replenished when the economy turns around.—Rick Cohen

The Nonprofit QuarterlyNo Reimbursement for Fraud: More for Florida to Save Where This Came From
January 5, 2010; Palm Beach Post | Here’s an audit finding that’s hard to explain away. The Florida Agency for Health Care Administration audited some nonprofit nursing homes and found one in Pahokee that billed $672,000 in operating expenses to Medicaid between 2003 and 2004 that were unsubstantiated with back-up information and probably inappropriate to bill to Mediaid. According to the audit, nursing home CEOs used the Medicaid moneys for items such as hot tubs, Cadillacs and BMWs and more. The problem with this Palm Beach Post editorial is that it sounds like there is a band of rapacious nonprofit nursing home operators out there bilking the government and poor people out of Medicaid moneys. The reality is that there are unfortunately too many people who view Medicaid as a great opportunity for stealing money. They might use for-profit vehicles or nonprofit vehicles, but the criminals in these cases are the hoards of people eager to purloin a few hundred thousand dollars through billing the federal government for costs that shouldn’t be reimbursed. This is a criminal story, not a problem-with-the-nonprofit-sector story.—Rick Cohen



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