Audit Finds Improper Project Manager Selection Process, Conflict Of Interest At HealthFirst

Jul 25, 2013

LEXINGTON, Ky. - An audit of HealthFirst Bluegrass has uncovered four areas of concern that could derail a $12M dollar federally-funded clinic project on Southland Drive.

State Auditor Adam Edelen and Mayor Jim Gray announce the results of HealthFirst audit
State Auditor Adam Edelen and Mayor Jim Gray announce the results of HealthFirst audit

State Auditor Adam Edelen told reporters Thursday that his audit shows that HealthFirst pre-selected the project manager for the Southland clinic and failed to even conduct interviews for the position. The audit also says that the pre-selected candidate, developer Ted Mims, has a conflict of interest because he now owns 10 percent of the property.

"I think any reasonable person understands that if you have 10 percent interest of a nearly $12M dollar project, that's a significant interest that makes it, in my view, impossible to separate personal good from what's good for the overall project and the people you're hired to serve," Edelen says.

Edelen also pointed to late Medicaid payments totaling more than a million dollars and overly optimistic revenue projections as reasons to worry about HealthFirst’s long-term financial stability.

In response to the audit, HealthFirst board chairman Thomas Lester, along with the building committee chairman, wrote in a letter that beyond “minor and potential findings,” there were no concerns or issues that resulted in any improprieties.

Mayor Jim Gray says in a time when the federal government is slashing spending at the state level, Lexington can’t afford to lose the $12M grant and called on the HealthFirst board to address the issues raised in the audit.