Our Opinion: Audit makes case for Eastpointe to call off its merger

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Wilson County’s mental health agency is less than two months away from completing a merger with Cardinal Innovations Healthcare Solutions. A blistering audit showing misuse of taxpayer funds at Cardinal should prompt local leaders to hit the brakes.

Kannapolis-based Cardinal pays CEO Richard Topping a base salary of $635,000, more than three times the maximum salary for mental health area directors set by the N.C. Office of State Human Resources, according to the audit released Thursday. Topping also receives a $12,000 car allowance despite charging gas purchases to a company credit card.

Cardinal executives spent $15,765 on in-state charter flights during a three-month span in 2015, including two private-plane trips to the Rocky Mount-Wilson Airport. The agency spent lavishly on catered meals, alcohol and hotels for its board meetings, racking up $123,631 in charges during the 2015 and 2016 fiscal years.

A single Christmas party led to an $18,130 tab, the audit revealed, and five top executives and an executive assistant spent a combined $3,281 on booze, $10,521 on first-class plane tickets and $47,987 on hotel charges exceeding the federal reimbursement rate, all charged to Cardinal credit cards.

Cardinal also spent large sums on consultants and formed a separate nonprofit entity, Cardinal Ally, to “explore strategic options,” according to the audit.

“The unreasonable spending on board retreats, meetings, Christmas parties and travel goes against legislative intent for Cardinal’s operations, potentially resulting in the erosion of public trust,” State Auditor Beth Wood wrote in her findings and recommendations.

The audit includes Cardinal’s response to Wood’s findings. In that document, Topping defends the lavish spending as legal, claims that the state salary ranges for local management entity CEOs are mere recommendations and says the expenses Wood flagged as “unreasonable” account for just 0.34 percent of the agency’s administrative expenditures.

“Cardinal makes this assertion several times in an attempt to minimize the finding,” Wood wrote. “...As a government entity, there should be no amount of taxpayer dollars that is acceptable to be spent on extravagant or unreasonable expenses.”

We agree, and we applaud our state auditor for exposing Cardinal’s wasteful ways to the public.

The CEO’s bloated compensation package and the shameless spending on booze, travel and perks for board members and executives should infuriate North Carolina taxpayers. There is simply no excuse for this blatant misuse of our money.

Eastpointe, the Beulaville-based local management entity that coordinates behavioral care services for residents in Wilson, Nash, Edgecombe, Greene, Wayne, Lenoir, Bladen, Columbus, Sampson, Scotland and Robeson counties, is in the process of merging with Cardinal Innovations Healthcare Solutions.

Set to be complete by July 1, the merger would create a managed-care organization that serves a population of roughly 3.8 million people spread across 32 of North Carolina’s 100 counties, with more than 1.1 million enrolled clients.

If it isn’t too late to call off this wedding, Eastpointe should consider leaving Cardinal at the altar.