State audit critical of EMSA spending
BY ZIVA BRANSTETTER World Enterprise Editor
Tuesday, January 22, 2013
1/23/13 at 11:53 AM
Read the World’s investigation and
view related documents.
Document: View the EMSA audit here.
EMSA spent lavishly on items including more than $800 for spa treatments for its CEO and a retirement party costing $4,300 at which three employees were given $400 Mont Blanc pens, according to an investigative audit by the state Auditor and Inspector’s Office.
The audit, released today, follows an earlier Tulsa World investigation into the agency’s billing and spending practices. It confirms and expands on the findings of the World’s investigation, including making recommendations for improvements to EMSA’s patient address system.
The audit covers the period Jan. 1, 2009 through June 30, 2012.
EMSA’s board requested the audit in May, following a resolution by the Tulsa City Council urging EMSA to seek an investigative audit. Three state lawmakers also called on EMSA to seek the audit.
The audit takes EMSA’s board to task for failing to correct “abusive expenditure patterns” by the agency and singles out its CEO, Steve Williamson.
“During the period examined, Mr. Williamson was reimbursed for a number of expenditures that the general public would consider unwarranted and extravagant such as spa goods and services, an American Airlines Admirals’ Club membership and multiple lifetime subscriptions to Sirius Satellite Radio,” the audit states.
“The CEO’s total purchases (including reimbursed costs as well as corporate credit card purchases) for the period examined totaled $416,109 and, of that total, $220,436.89 was spent with no Board oversight.”
The Emergency Medical Services Authority is a government agency that oversees a contractor providing ambulance service for more than 1.1 million people in Tulsa, Oklahoma City and surrounding cities. Citizens in Tulsa, Oklahoma City and other cities served by EMSA pay a monthly fee on their utility bills designed to defray costs for emergency ambulance service.
State Auditor and Inspector Gary Jones said the audit shows EMSA was failing to provide proper oversight of its spending.
“It’s a public entity and they should be transacting business in that manner,” Jones said.
Jones said the World’s reporting brought the matter to the public’s attention and thanked the newspaper for its efforts.
“If it weren’t brought to the public’s attention this (audit) wouldn’t be happening,” he said.
Questioned costs in the audit include:
$4,304 on a 20-year anniversary party, including the purchase of three Mont Blanc pens between $385 and $410 each in June 2009;
$4,504 on a retirement party, including $2823 on catering, $831 on party planning fees and $325 on a crystal flower vase for the retiree, in June 2010;
$35,190 for “floral services” and “office beautification;”
$23,875 for “fitness services” to the wife of an EMSA employee to provide exercise classes to EMSA’s Oklahoma City employees at a cost of $125 per person per month;
$1,140 to a local vendor for the purchase of 60 gift bags for Leadership Oklahoma;
$399 each for two lifetime subscriptions to Sirius Satellite Radio;$349 for a gift from Uncommon Goods and $255 for a gift purchase from Bodean’s;$1,300 for "casino style entertainment" at a Christmas party that also featured a margarita machine.
While the audit doesn't find that EMSA committed any violations of state law, it suggests that EMSA seek legal counsel to determine whether an inappropriate relationship exists between the agency and its contractor, Paramedics Plus.
The audit focused on Williamson’s travel spending, which accounted for about half of all travel expenditures for the agency. Most of the travel involved Williamson’s role as head of the American Ambulance Association.
Williamson was president of the industry lobbying group from November 2010 to November 2012. He has said he will continue traveling on behalf of the association as its past president.
EMSA spent $132,000 in travel in fiscal year 2011. That compares with $287,000 spent by the city of Tulsa in the same year. The city has about 3,500 employees while EMSA has about 46.
Travel expenses Williamson charged include spa treatments at hotels where he stayed and membership in American Airlines’ frequent flyers’ Admiral’s Club, the audit states.
The spa treatments are among 19 questioned costs for which Williamson sought reimbursement. The receipts are for spa services costing $415 and $490 and both receipts indicated that EMSA’s contractor, Paramedics Plus, should be billed.
The World’s investigation found that EMSA accepted money from Paramedics Plus to defray some of Williamson’s travel for the American Ambulance Association. EMSA’s board was not told about the payment.
The Texas-based company has a five-year contract, which Williamson signed, valued at more than $150 million to provide paramedics to operate EMSA’s ambulances. Williamson is involved in negotiations for a new contract, which is expected to be considered by the board this year.
“That definitely sets up a perceived conflict of interest,” Jones said, noting that state employees are not allowed to accept such donations. He also said EMSA’s board should have been involved in the process and that “the sponsorship should not be to the individual employee.”
EMSA’s attorney has said the payment was not improper.
Williamson has said his participation in the industry group helps him stay current on industry trends and allows him to lobby Congress in order to keep ambulance transport costs low.
Jones said the audit shows that EMSA’s board needs to provide more oversight to the agency’s spending. The World’s investigation found the board canceled nearly half of its board meetings in 2011 and that three board members were serving expired terms.
Several board members have since been replaced and the board has canceled three meetings in the past 12 months, records show.
The audit made five recommendations related to EMSA’s billing practices, which had largely been overhauled by the time the audit began.
The audit notes that wording in some EMSA materials to customers could be misleading and makes suggestions for improvements in the agency’s billing practices. It recommends that procedures used to identify patient addresses be improved and that outreach efforts to patients be enhanced.
Before EMSA changed its financial statements last year, its bills failed to inform patients about the utility program. The old bills stated “due from patient” and “due upon receipt,” possibly leading patients to pay bills they did not owe.
The World’s investigation included a review of lawsuits filed by EMSA against patients in Tulsa District Court. It found EMSA had sued 124 people who lived at addresses that city records showed were included in the monthly utility program.
“While our testwork revealed that some billing errors did occur, they do not appear to have been intentional,” the audit states.
It recommends that EMSA improve its address system, enhance patient outreach efforts, enforce its contract with Paramedics Plus to collect patient information, address possible conflicts with related party accounts and automate the process of discounting TotalCare transports.
A lawsuit seeking class-action status filed by attorney Robert Pezold on behalf of several patients remains pending in Tulsa District Court. A judge handling that case recently denied EMSA’s motion to dismiss the suit, records show.
Other EMSA expenses questioned by the audit include money spent to rent an apartment in the Bricktown section of Oklahoma City. Williamson has said he used the apartment when doing business in the Oklahoma City area, where EMSA also has an office.
Expenses for the apartment included $40,000 for rent and $1,500 for cable services, the audit states. EMSA ended the apartment lease after stories in the World and The Oklahoman detailed expenses connected to it.
The audit also notes that EMSA spent more than $30,000 on “floral arrangements and office beautification” and $15,000 for donations to First Tee, a non-profit organization focused on teaching children how to play golf.
A website for the First Tee of Metropolitan Oklahoma City lists EMSA among its “primary sponsors.”
Jones said EMSA employees were cooperative and “obviously some changes have been made” at the agency to improve its oversight and operations. He said he hopes the board will seriously consider enacting the audit’s recommendations for additional changes.
“This is a public entity spending funds and there should be safeguards in place to be sure that the laws and statutes are followed. ... Any outrageous expenses do nothing but contribute to higher fees” passed on to patients, he said.
Read the complete story in Wednesday’s Tulsa World.