Feb. 3—TRAVERSE CITY — Current and former employees of the region’s largest mental health organization more than two years ago described working conditions there as a dysfunctional “culture of fear.”

About that same time, board members of Northern Lakes Community Mental Health Authority questioned some expenditures and began asking for detailed financial reports.

As early as 2021, some elected officials said they’d tried working with a Northern Lakes’ top executive — now on paid administrative leave — and were met with a “my-way-or-the-highway” attitude.

And a steady stream of friends and family of people experiencing mental health crises have attended board meetings to say they feel abandoned by an organization mired in bureaucracy.

“We understand there are systemic issues that inform and impede what our organizations and institutions see as tenable,” Allison Zimpfer and Courtney Wiggins, on behalf of their unnamed friend, said during the public comment portion of the Dec. 21 board meeting.

“We cannot accept that individuals, who need support to become and stay safe, experience a rotating door of acute hospital stays, medication regimens, and encouraging words,” they said.

Board Chair Ben Townsend on Friday declined to say whether he thought the framework the board uses for oversight — a hand’s-off governance style called the Carver Model — contributed to these issues.

But days before, during a special meeting, the $45,000/month consultants Northern Lakes hired in August confirmed multiple systemic financial and human resources failings at the $90-million organization.

“The environment that they were working in was one of fear, retaliation and a lack of trust,” Rehmann Group consultant Kerreen Conley said, echoing what several employees previously told the Record-Eagle.

“There are pages and pages of employee comments that were very honest and brutal,” Conley said. “Ultimately, there’s a lot to overcome from the past.”

Richard Carpenter, also of the Rehmann Group, focused on the organization’s finances and he, too, shared troubling findings.

Policies were ineffective, and evidence may point to intentional accounting errors, collusion between two unnamed finance department employees and other inappropriate activity, Carpenter said.

“That puts our assessment, and really all of the financial operations of the organization, in a different light,” Carpenter said.

Former Chief Financial Officer Lauri Fisher was placed on administrative leave in September and is no longer with the organization, officials previously said.

An unnamed finance department employee was last month either fired or allowed to resign, records show.

From assessment to investigation

Carpenter said the Northern Michigan Regional Entity, the Medicaid funder now overseeing Northern Lakes in an emergency manager-type roll, approved Rehmann’s proposal to investigate further.

Escaping mention at the special meeting, however, was a U.S. Homeland Security investigation of $283,000 an email scammer netted from Northern Lakes, as acknowledged by officials in October.

On Friday, Townsend, the only member of the board authorized to speak to reporters, said he’d withhold comments on consultants’ findings for now.

“Until the forensic investigation is completed, it would be inappropriate and premature for the Board to comment upon the forensic investigation,” Townsend said. “The Board looks forward to receiving and discussing the results of the forensic investigation upon its conclusion.”

Eric Kurtz, NMRE’s chief executive officer, did not return calls seeking comment Friday, although Carpenter said the proposal was presented and approved by NMRE’s board prior to Northern Lakes’ special meeting.

Private investigators and others will soon dig into Northern Lakes’ payroll, vendor invoices, journal entries, billing transactions and other records to learn if internal controls were overwritten and documentation fabricated.

Carver Model criticism

Northern Lakes provides services in six counties — Crawford, Grand Traverse, Leelanau, Missaukee, Roscommon and Wexford — and as many as 16 board members are appointed to three-year terms by their respective county commissioners.

The organization receives the majority of its funding from Medicaid, the MI Choice Waiver program, grants, other state funds and county taxes, and releases an annual report to the public to show where the money goes.

That annual report, available on the organization’s website, does not contain line-item expenditures, which traditionally were not shared with the board during budget discussions, members previously said.

Consultants Conley and Carpenter delivered their findings and announced the pending investigation to the sober faces of Northern Lakes board members during a 35-minute special meeting Tuesday afternoon.

In December, the board voted unanimously for an ad hoc committee to seek an alternative to the Carver Model, which calls for a board to oversee the organization’s CEO, who is granted broad powers over the organization.

The Carver Model, meeting minutes show, directs the board to regularly address nebulous-sounding agenda items such as “ownership linkage” and “global executive limitations,” but take a more hands-off approach to pragmatic concerns such as employee complaints and line-item expenditures.

“The ad hoc committee is engaged in these discussions,” Townsend said Friday, “and intends to present its initial recommendations to the Board, hopefully at its March meeting.”

Townsend on Tuesday asked Carpenter if Rehmann’s forensic investigation would be “exhaustive.”

Carpenter said private investigators and others would begin with fiscal year 2023 (Oct. 1, 2022- Sept. 31, 2023) and go where the evidence might lead.

Of concern to community members, nonprofit leaders and officials, who spoke anonymously for fear of possible retaliation, is how much these controversies are costing.

A calculation from meeting minutes, internal documents and news tips, of administrative leave pay, consultant pay, the email scam, previous payroll errors for at least one leadership team member and other costs, put the total expended since September at more than $600,000.

Secretive past, uncertain future

This is not the first time the words Northern Lakes and private investigator have been used in conjunction with one another.

In 2021, Stephanie Annis was fired from her job as a Northern Lakes case manager, therapist and social worker for what NLCMHA records showed was a billing issue.

Annis, who was among the first to sound the alarm about the culture of fear, told the Record-Eagle in 2021 that she liked her job and received excellent performance reviews — but was fired in retaliation for speaking positively about another terminated employee.

Annis and the other terminated employee, Rob Ordiway, each filed Equal Employment Opportunity Commission complaints against NLCMHA, records show, after being interviewed by Grand Rapids attorney and private investigator Keith Brodie.

Internal invoices, previously provided to the Record-Eagle in response to a Freedom of Information Act request, showed Brodie was hired to investigate a possible romantic relationship between two now-former employees.

“We were invited to a meeting to supposedly talk about how we were doing under COVID,” Annis told the Record-Eagle in 2021. “Then, when we got there, we were told the man was a private investigator, hired by the interim CEO, to look into . . . a possible affair with another staff member.”

The interim CEO at that time was Joanie Blamer, who the board in April 2022 announced they had offered the permanent job to, but then rescinded that offer less than three months later.

Ordiway, records show, also applied for the post, but was not a finalist.

Blamer for several months continued to serve as interim, then was placed on paid administrative leave in mid-September for what officials say is an unspecified “pending investigation.”

Blamer has declined to comment, citing the ongoing nature of the dispute.

The current interim CEO, appointed in October, is Brian Martinus — and his efforts, along with those of longtime Northern Lakes employees, were singled out by Rehmann Group consultants as rare bright spots.

“I appreciated their cooperation and willingness to talk,” Conley said. “Nobody said they didn’t want to talk — and some we didn’t invite asked to talk.”

Attempts to reach Annis for comment were unsuccessful and Ordiway declined to comment on Northern Lakes’ previous and current controversies.

But Ordiway did say he continues to support the organization’s mission, largely because of skilled clinicians and others who stayed in their jobs, despite the problems and publicity.

Deserving of specific praise, he said, is Traverse House Clubhouse and contract providers, Magnolia and MI Independent Living.

“This organization is filled with unsung heroes,” Ordiway said.

Rehmann consultants said there is, so far, no written financial report, although a written human resources report is expected to be presented to NMRE’s board at its next meeting on February 28.