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Because the state's audit of the Timpanogos Community Health Center "just hit the high points" of the problems there, the Utah Department of Social Services will coordinate another multi-organization audit, the department's director says.

"It will take much longer to sort it all out," Norm Angus said. "We need to see where the money came from and where it went. Much of it was collections from individuals, as well as federal Title 19 money and state funds."Angus said Social Services will coordinate reviews by the Internal Revenue Service and state, county and Medicaid fraud auditors.

The recent audit of the Timpanogos center by the legislative auditor general's office showed misappropriations of at least $3.5 million by several employees since 1984.

The audit report says money was diverted to individuals through multiple administration contracts, personal use of center credit cards and payment of inflated rents on properties leased from a management member.

The legislative audit said three groups failed to adequately oversee use of funds by the center the Timpanogos Mental Health Board (comprised of a county commissioner from each of three counties), the State Division of Mental Health and the accounting firm that did an independent audit of the center.

But, according to Janetha Hancock of the Office of Legislative Research and General Counsel, "the county is primarily responsible for oversight. The statute is specific. Ninety percent of the responsibility was taken from the state and given to the counties."

By law, the state takes money allocated by the Legislature and passes it through to county mental health authorities, who then contract with providers county or private to actually deliver services. Timpanogos has been described as a private facility, but Don Muller, spokesman for the Division of Mental Health, said it is actually a tri-county facility that serves Utah, Summit and Washington counties and falls under jurisdiction of those commissioners.

An unknown portion of Timpanogos' money comes from private and insurance company fees, schools and other social service divisions, so at this point what percentage of the misappropriated money came from taxpayers is unknown.

Any contract for more than $100,000 must be audited independently by a certified public accountant, while contracts for less are subject to in-house audits by the state. "Every contract we have says we are to be advised of related-party transactions," Angus told lawmakers. "These were definitely related-party transactions, but we were told there were none. We have an oversight responsibility, and we failed in that. If we'd had a valid independent audit, we could have picked it up."

Legislators must now decide if they want to change the system, possibly eliminating local mental health authorities. "The Legislature created this beast," Bryant Howe, legislative analyst, told members of the Social Services Joint Interim Committee, under which the Division of Mental Health falls. "The theory was we had to have local control. Now you have to decide if you want to change the system."

Although the department has discussed cancelling all independent audits, and conducting in-house audits, Angus is reluctant. "Audits of three other county mental health authorities, identical to Timpanogos', have shown no problem. The system, until now, seems to have worked well."

Instead, Angus wants to establish an inspector general function in the department. "I'm not sure we want to take on all the nuts and bolts parts of auditing. I think we want to do checks and spot checks. An IG would be another resource a check to look over what goes on in all our contracts, not just mental health."