KENT CO., DE - Delaware Attorney General Kathy Jennings is raising red flags over opioid settlement funds in the First State after the State Auditor claimed signs of fraud at Code Purple Kent County, a nonprofit aimed at easing homelessness and addiction.
Delaware distributes opioid settlement funds from pharmaceutical lawsuits to local organizations and charities with the aim of combating Delaware’s opioid crisis. Those funds, and who they are distributed to, are overseen by the Prescription Opioid Settlement Distribution Commission (POSDC), which Attorney General Kathy Jennings co-chairs with Lt. Governor Bethany Hall-Long.
Due to recent allegations stemming from Delaware’s Office of the Auditor of Accounts, however, Jennings is now calling for a pause and review of those settlement fund grants.
STATE AUDITOR’S ALLEGATIONS
In a letter to Jennings sent June 12th, State Auditor Lydia E. York said she had discovered signs of “potential waste, fraud, and abuse of state resources, including indications of fraudulent grant submissions” in her office’s review of Code Purple Kent County.
In that letter, York notes that while her audit only covered the grant awarded to Code Purple Kent County by the POSDC, Code Purple Kent County received nearly $1 million from the State in the last 2 years.
“Despite our best efforts, we have encountered significant challenges in establishing trust regarding the accuracy and authenticity of the documents provided by [Code Purple Kent County],” York’s letter to Jennings reads.
York concludes her letter to the Attorney General underscoring her office’s commitment to assisting in the DOJ’s investigation to “ensure all responsible parties are held accountable.”
AG JENNINGS’ RESPONSE
On June 28th, Jennings penned a blistering letter to her colleagues on the Prescription Opioid Settlement Distribution Commission, citing the Auditor’s allegations in her justification for her calls to temporarily freeze the issuance of settlement grants.
Jennings says she has repeatedly expressed concerns with how the Commission distributes the funds won from the opioid settlements, claiming she’s asked the Commission to develop a thorough plan including auditing and accountability before awarding more money.
“...it has been 20 months since the Commission began awarding grants, and we still do not know where these funds will be most useful, how we will measure their impact, or even whether our grantees are compliant,” Jennings writes.
Jennings goes on to say the Commission’s project is susceptible to potential fraud, waste, and abuse, a claim she justifies with the State Auditor’s allegations against Code Purple Kent County.
Until the Commission establishes the “guardrails” Jennings has called for, the Attorney General urges a complete freeze on new grants.
“I realize that this step may go against some of our reflexes; DOJ fought for years to secure these funds precisely because they are so important, and I know how deeply personal the epidemic feels to all of us,” Jennings letter to the Commission reads. “That is exactly why the public’s trust in this Commission is so vitally important — and why we must be unconditionally insistent that these funds are used wisely.”
LT. GOVERNOR HALL-LONG
WBOC reached out to Lt. Governor Hall-Long’s office Wednesday and received a detailed response including a statement from POSDC Executive Director Susan Holloway. Holloway claims it was the POSDC that first discovered the discrepancies with Code Purple Kent County and immediately froze opioid settlement funding to the organization.
According to Holloway, grant awardees are required to submit monthly compliance data before they are awarded grant funding from the POSDC. Grantees are also assigned a monitor who communicates with the organization, conducts site visits, and assesses compliance. Holloway says the POSDC noticed data inconsistencies with Code Purple Kent County, and a review of those inconsistencies triggered a permanent funding freeze in December 2023.
“We should stress that it was POSDC’s monthly reviews that uncovered the potential issues at Code Purple, investigated further and took immediate action to freeze funds and notify the proper state agencies for further investigation,” Holloway says. “The commission was glad to see this issue elevated through the DOJ and Auditor’s Office.”
As for Jennings’ request to freeze new grant awards, Lt. Governor Hall-Long says that freeze is already in place.
“In partnership with the Attorney General and all members of the commission, we’ve worked hard to ensure every dollar is well spent in support of those impacted by the horrific disease of addiction,” Lt. Governor Hall-Long said. “As discussed at last Friday’s commission meeting, there is no date set to execute the next open grant cycle, which means there is a pause in new funding. I want to reiterate that means no new grant funding will be awarded at this time. I agree with my co-chair that we need to carefully consider the next grant cycle launch date. We will continue to take input from the commission members, our consultants, and the public as we move forward.”
WHAT’S NEXT
A spokesperson for the Department of Justice says the the fraud allegations at Code Purple Kent County have been referred to the DOJ’s White Collar Crime Unit for investigation. How long that investigation could take was not immediately clear.
The Prescription Opioid Settlement Distribution Commission currently has their next quarterly meeting scheduled for October 28th, 2024 at 1 p.m. in Wilmington.
WBOC reached out to Code Purple Kent County for comment Wednesday but did not receive an immediate response.