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Attorney defends SEABHS car fleet
Thelma Grimes/San Pedro Valley News-Sun
Rose Weston, legal director for the Southeastern Arizona Behavioral Health Services, Inc. (SEABHS), defended the non-profit's 119-car fleet that has been criticized by board members following termination of the company's CEO.
Marcelino Varona, a board member from Nogales, spoke out during last month's meeting about its costing SEABHS more than $650,000 a year for maintenance and fuel. SEABHS has recently come under scrutiny after 14-year CEO Dana Johnson, who is being investigated by the Arizona Attorney General, was fired Nov. 19 by the board.
At the center of the accusations is Johnson's receiving a $150,000 loan from SEABHS in 2004. The loan was approved by an executive committee but was not repaid. Third-party auditors found the discrepancy, and a 2007 income tax form outlines details of the agreement where Johnson was granted an extension.
The 990 form states, "SEABHS has a note receivable with an employee in the amount of $150,000. Interest only payments are due monthly at 6 percent until maturity with a final balloon principal payment expected to be made Dec. 2010. The note is collateralized by the employee's balance in their pension plan account. Additionally, SEABHS is named the beneficiary on a life insurance policy in an amount equal to the principal balance."
When asked if Johnson had been making the interest-only payments as stipulated, Weston said SEABHS is currently conducting an investigation to find out.
At the time of her termination, Johnson was making between $120,000 and $130,000 a year, Weston said.
When asked why the Attorney General's office would be investigating if Johnson still has until Dec. 2010 to repay the loan, Weston said she is not permitted to comment regarding the ongoing investigation.
Johnson, who was with the SEABHS for 19 years, was upgraded from a person of interest to a suspect in the investigation. Weston informed the board last month that because Johnson is a suspect, the company's accounting records would be subpoenaed by the state.
Since the accusations were made public, Weston said management decisions made by Johnson have caused SEABHS employees to be criticized unfairly and have prompted questions about daily operations.
One of those operations is the costly purchase and management of the vehicle fleet, including Johnson's own car, a 2007 Cadillac SRX purchased with SEABHS funds.
SEABHS, which provides services to the mentally ill in Greenlee, Cochise, Graham and Santa Cruz counties, is mandated by law to provide a certain level of service to its clients, Weston said.
Citing the 1989 Arizona Supreme Court case, Arnold v. Sarn, Weston said SEABHS is obligated to provide transportation.
In the case, the Arizona Supreme Court ruled that seriously ill adults had the right to appropriate treatment in their communities. The court ruled that the State of Arizona and Maricopa County had failed to provide proper services to the defendants in the case.
In the court's final stipulation, the state was ordered to reorganize its health care services according to the 'Principles for Persons with Serious Mental Illness,' which requires focus on dignity, hope, freedom and timely access to appropriate care.
Weston said based on this decision, a vehicle fleet is required.
For instance, Weston said, SEABHS must pick up students who are released from school and drive them to therapy sessions. Suicidal patients must be driven from the hospital to home and within 24 hours a welfare check is required.
"We could not serve this vast area without these vehicles," Weston said. "We have a variety of transportation needs, and the public must realize we need these cars to provide these services to our clients."
However, when asked if SEABHS has taken cost-effective steps in acquiring and maintaining the fleet, Weston said she was not a part of management decisions made by Johnson.
According to SEABHS vehicle inventory, there are a large number of passenger vans, which is expected for an agency transporting patients. But, as Varona noted, many of the vehicles are being purchased at dealerships in Tucson brand new. Only 26 cars in the fleet were purchased at a discount from the Arizona Department of Transportation.
The SEABHS fleet costs the non-profit more than $650,000 a year or $5,462 per vehicle in maintenance and fuel, while the City of Benson, with an estimated 80-vehicle fleet, spent $72,428 last year, or $905 per vehicle.
Dick Hamilton, one of the longest-running members on the SEABHS board, said he understands the need for passenger vans to escort clients, but feels there should be an investigation into how much the fleet is costing, and who is driving what.
Another concern brought up by Varona, a former mayor of Nogales, is the kinds of cars SEABHS administrators are driving.
Johnson, who received a severance package worth $20,000 after being fired, has been driving a Cadillac. Administrator Bob Rossman has a 2007 Dodge Ram, and administrator Steve Ochsenbein drives a 2008 Jeep Liberty.
"We as a board should be ashamed of ourselves," said Hamilton, a nine-year board member. "I've never been one to micro-manage, but here, maybe we as a board should have micro-managed a little more. The car situation definitely needs more investigation. I was aware that (Johnson) and others had company cars, but I never thought it was a Cadillac."
Hamilton said one of the problems with the board is that the members stretch across all four counties, and meet once a month.
"Because we are spread out, like a City Council would look to the city manager for leadership, we relied on the CEO," said Hamilton, who is a former Benson mayor. "We expected her to be truthful with us about how the company was going."
Hamilton said after more investigation, he wouldn't be surprised if some of the more costly vehicles are retired.
Weston also defended some of the administrators' choices in vehicles, stating some have personal preferences that they only be made in America, or that they meet certain standards in regards to safety. The legal director, who does not drive a company car, said sometimes the lowest bid does not result in the company's getting the best in quality.
Mary Battaglia, who has served on the board less than year, also said she wants more information on who is driving what.
"(Johnson) managed things for SEABHS for a long time, and in that time we have grown into a large corporation, and now need someone with more expertise," she said. "The best thing we can do, and the best thing for SEABHS, is to move forward. It sounds like there are some vehicles that could be put to better use, or maybe there are ones we don't even need anymore."
Battaglia said while there is a report of all the cars SEABHS has, there needs to be more investigation not only into who is driving what, but in what capacity. Like Hamilton, Battaglia said with maintenance and fuel costs, some of them may need to be retired.
Varona also expressed concern last month, stating none of the cars carry the SEABHS logo, and if employees are using the cars for personal use, he wonders if the company and the employees are reporting the proper information to the Internal Revenue Service (IRS).
Weston said the company discourages personal use of the company vehicles, but has told employees if they do so, it must be reported to the IRS.
According to IRS.gov, the personal use of a company vehicle is considered a fringe benefit, and must be reported as such. Fringe benefits are taxable unless specifically excluded by law.
The Attorney General's office is also investigating what Weston referred to in the Nov. 19 meeting as "vehicle fraud." Weston said the employee being investigated has been fired.
Rose Weston, legal director for the Southeastern Arizona Behavioral Health Services, Inc. (SEABHS), defended the non-profit's 119-car fleet that has been criticized by board members following termination of the company's CEO.
Marcelino Varona, a board member from Nogales, spoke out during last month's meeting about its costing SEABHS more than $650,000 a year for maintenance and fuel. SEABHS has recently come under scrutiny after 14-year CEO Dana Johnson, who is being investigated by the Arizona Attorney General, was fired Nov. 19 by the board.
At the center of the accusations is Johnson's receiving a $150,000 loan from SEABHS in 2004. The loan was approved by an executive committee but was not repaid. Third-party auditors found the discrepancy, and a 2007 income tax form outlines details of the agreement where Johnson was granted an extension.
The 990 form states, "SEABHS has a note receivable with an employee in the amount of $150,000. Interest only payments are due monthly at 6 percent until maturity with a final balloon principal payment expected to be made Dec. 2010. The note is collateralized by the employee's balance in their pension plan account. Additionally, SEABHS is named the beneficiary on a life insurance policy in an amount equal to the principal balance."
When asked if Johnson had been making the interest-only payments as stipulated, Weston said SEABHS is currently conducting an investigation to find out.
At the time of her termination, Johnson was making between $120,000 and $130,000 a year, Weston said.
When asked why the Attorney General's office would be investigating if Johnson still has until Dec. 2010 to repay the loan, Weston said she is not permitted to comment regarding the ongoing investigation.
Johnson, who was with the SEABHS for 19 years, was upgraded from a person of interest to a suspect in the investigation. Weston informed the board last month that because Johnson is a suspect, the company's accounting records would be subpoenaed by the state.
Since the accusations were made public, Weston said management decisions made by Johnson have caused SEABHS employees to be criticized unfairly and have prompted questions about daily operations.
One of those operations is the costly purchase and management of the vehicle fleet, including Johnson's own car, a 2007 Cadillac SRX purchased with SEABHS funds.
SEABHS, which provides services to the mentally ill in Greenlee, Cochise, Graham and Santa Cruz counties, is mandated by law to provide a certain level of service to its clients, Weston said.
Citing the 1989 Arizona Supreme Court case, Arnold v. Sarn, Weston said SEABHS is obligated to provide transportation.
In the case, the Arizona Supreme Court ruled that seriously ill adults had the right to appropriate treatment in their communities. The court ruled that the State of Arizona and Maricopa County had failed to provide proper services to the defendants in the case.
In the court's final stipulation, the state was ordered to reorganize its health care services according to the 'Principles for Persons with Serious Mental Illness,' which requires focus on dignity, hope, freedom and timely access to appropriate care.
Weston said based on this decision, a vehicle fleet is required.
For instance, Weston said, SEABHS must pick up students who are released from school and drive them to therapy sessions. Suicidal patients must be driven from the hospital to home and within 24 hours a welfare check is required.
"We could not serve this vast area without these vehicles," Weston said. "We have a variety of transportation needs, and the public must realize we need these cars to provide these services to our clients."
However, when asked if SEABHS has taken cost-effective steps in acquiring and maintaining the fleet, Weston said she was not a part of management decisions made by Johnson.
According to SEABHS vehicle inventory, there are a large number of passenger vans, which is expected for an agency transporting patients. But, as Varona noted, many of the vehicles are being purchased at dealerships in Tucson brand new. Only 26 cars in the fleet were purchased at a discount from the Arizona Department of Transportation.
The SEABHS fleet costs the non-profit more than $650,000 a year or $5,462 per vehicle in maintenance and fuel, while the City of Benson, with an estimated 80-vehicle fleet, spent $72,428 last year, or $905 per vehicle.
Dick Hamilton, one of the longest-running members on the SEABHS board, said he understands the need for passenger vans to escort clients, but feels there should be an investigation into how much the fleet is costing, and who is driving what.
Another concern brought up by Varona, a former mayor of Nogales, is the kinds of cars SEABHS administrators are driving.
Johnson, who received a severance package worth $20,000 after being fired, has been driving a Cadillac. Administrator Bob Rossman has a 2007 Dodge Ram, and administrator Steve Ochsenbein drives a 2008 Jeep Liberty.
"We as a board should be ashamed of ourselves," said Hamilton, a nine-year board member. "I've never been one to micro-manage, but here, maybe we as a board should have micro-managed a little more. The car situation definitely needs more investigation. I was aware that (Johnson) and others had company cars, but I never thought it was a Cadillac."
Hamilton said one of the problems with the board is that the members stretch across all four counties, and meet once a month.
"Because we are spread out, like a City Council would look to the city manager for leadership, we relied on the CEO," said Hamilton, who is a former Benson mayor. "We expected her to be truthful with us about how the company was going."
Hamilton said after more investigation, he wouldn't be surprised if some of the more costly vehicles are retired.
Weston also defended some of the administrators' choices in vehicles, stating some have personal preferences that they only be made in America, or that they meet certain standards in regards to safety. The legal director, who does not drive a company car, said sometimes the lowest bid does not result in the company's getting the best in quality.
Mary Battaglia, who has served on the board less than year, also said she wants more information on who is driving what.
"(Johnson) managed things for SEABHS for a long time, and in that time we have grown into a large corporation, and now need someone with more expertise," she said. "The best thing we can do, and the best thing for SEABHS, is to move forward. It sounds like there are some vehicles that could be put to better use, or maybe there are ones we don't even need anymore."
Battaglia said while there is a report of all the cars SEABHS has, there needs to be more investigation not only into who is driving what, but in what capacity. Like Hamilton, Battaglia said with maintenance and fuel costs, some of them may need to be retired.
Varona also expressed concern last month, stating none of the cars carry the SEABHS logo, and if employees are using the cars for personal use, he wonders if the company and the employees are reporting the proper information to the Internal Revenue Service (IRS).
Weston said the company discourages personal use of the company vehicles, but has told employees if they do so, it must be reported to the IRS.
According to IRS.gov, the personal use of a company vehicle is considered a fringe benefit, and must be reported as such. Fringe benefits are taxable unless specifically excluded by law.
The Attorney General's office is also investigating what Weston referred to in the Nov. 19 meeting as "vehicle fraud." Weston said the employee being investigated has been fired.
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Reader Comments
The following are comments from the readers. In no way do they represent the view of bensonnews-sun.com.
Concerned Citizen wrote on Dec 9, 2009 5:06 PM:
" It's about time SEABHS cleaned house. I wouldn't be surprised if they found more than what's been mentioned in these news articles during their investigation. Spend the money where it needs to be spent on! You don't need a Cadillac when you are working from home! "
Christine wrote on Dec 10, 2009 3:19 PM:
" Too Many Cars !!! Why do their maintainence men need their own cars to drive back and forth to work??? most jobs you apply for ask if you have reliable transportation , not would you like your own reliable tranportation at our expence, I am sure the all have their own fuel cards as well. "
JV wrote on Dec 13, 2009 1:24 AM:
" Simple... Lack of oversight. Who is responsible for the funding these clinics receive? "
JV wrote on Dec 13, 2009 1:35 AM:
" Personal usage of business vehicles, per the IRC are required to be tracked by employee or employer. The treatment of fringe benefits is the responsibility of the employer to properly disclose on form W-2 at the end of the year.
If this wasn't done... it is just another item SEABHS wasn't properly managing of their employees.
Finally.... heard of "Tone at the top"?.... Lead by example. "
If this wasn't done... it is just another item SEABHS wasn't properly managing of their employees.
Finally.... heard of "Tone at the top"?.... Lead by example. "
cdg wrote on Dec 13, 2009 3:32 AM:
" Rose Weston claims that SEABHS needs a fleet of 119 vehicles for transporting "clients". How many "clients" had Ms. Weston transported with the vehicle she obtained when she (recently) went to work for SEABHS? Ms. Weston claims that "the company discourages personal use of the company vehicles, but has told employees if they do so, it must be reported to the IRS." Does Ms. Weston report to the IRS her use of her company vehicle to drive to and from work?
The IRS classifies commuting between one's home and one's office as personal use of a vehicle. If they didn't, a taxpayer could deduct the cost of going to and from work in a personally-owned vehicle.
If SEABHS needed these vehicles for transporting "clients", as they claim, they could be parked at SEABHS, and used for that purpose. The fact that privileged employees take their company vehicles home overnight, and use them for commuting, and only occasionally (if ever) for "transporting clients" demonstrates vividly that these vehicles are intended and used for personal use.
If this is the case, the EMPLOYER is required by federal law to report the "fringe benefit" to the IRS on the annual Form W-2; and the EMPLOYEE is required by federal law to declare the "fringe benefit" on their income tax return. Failure by either party to do so could well be construed as tax fraud. "
The IRS classifies commuting between one's home and one's office as personal use of a vehicle. If they didn't, a taxpayer could deduct the cost of going to and from work in a personally-owned vehicle.
If SEABHS needed these vehicles for transporting "clients", as they claim, they could be parked at SEABHS, and used for that purpose. The fact that privileged employees take their company vehicles home overnight, and use them for commuting, and only occasionally (if ever) for "transporting clients" demonstrates vividly that these vehicles are intended and used for personal use.
If this is the case, the EMPLOYER is required by federal law to report the "fringe benefit" to the IRS on the annual Form W-2; and the EMPLOYEE is required by federal law to declare the "fringe benefit" on their income tax return. Failure by either party to do so could well be construed as tax fraud. "
Elizabeth wrote on Dec 16, 2009 9:55 AM:
" I understand that the company needs its own fleet. Some of their employees may be extremely qualified, without a reliable automobile.
It may be wise, however, to put GPS tracking systems in the vehicles so fuel, miles, and stop times can be watched. This would probably cut back on a lot of costs and especially unauthorized use. "
It may be wise, however, to put GPS tracking systems in the vehicles so fuel, miles, and stop times can be watched. This would probably cut back on a lot of costs and especially unauthorized use. "
sean01 wrote on Dec 16, 2009 3:51 PM:
" At the centrist of the accusations is Lexicologist's receiving a $150,000 word from SEABHS in 2004. The give was authorized by an chief committee but was not repaid. Third-party auditors plant the departure, and a 2007 income tax configuration outlines information of the planning where Lexicographer was acknowledged an airing.
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attorney "
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attorney "
bablu wrote on Dec 17, 2009 12:03 AM:
" woohoo thats how I like it! The people posting the better!
attorney--attorney "
attorney--attorney "
delicate wrote on Dec 30, 2009 4:22 PM:
" the staff of SEABHS are dedicated to helping their clients and the community.
Many do go more than is expected to make sure the clients are getting the best service avilable. Issues of the administration and the board are not the clinical parts of the agency.
It is unfortunate that some of the administration reflect badly on the clinical staff and the clinical staff are already underpaid and understaffed. "
Many do go more than is expected to make sure the clients are getting the best service avilable. Issues of the administration and the board are not the clinical parts of the agency.
It is unfortunate that some of the administration reflect badly on the clinical staff and the clinical staff are already underpaid and understaffed. "
former employee wrote on Dec 9, 2009 11:35 AM: