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Accounting Tricks Keep MeckLINK In The Black, Out Of State Hands

North Carolina General Assembly

In the waning moments of a year-long battle with the state over its mental health services agency, MeckLINK, the Mecklenburg County Board of Commissioners has approved some accounting tricks to maintain its leverage over the agency’s fate.

The county government has subsidized MeckLINK in two ways: It got the agency off the ground with a nearly $8.5 million loan that’s yet to be repaid, and county employees have continued to perform services for it—handling payroll for instance—at the cost of about another $1 million per year. But, MeckLINK does not include those costs in reports to the state. County accountants say that is legal, assistant county manager Dena Diorio told commissioners Tuesday night.

“It is our choice to record it in the way that we think is most appropriate for Mecklenburg County,” Diorio said. “And, that treatment is totally acceptable.

Republican commissioners expressed discomfort at leaving millions of dollars off the balance sheet.

"It may very well be correct accounting, because Schedule W is not an audited form, but I still think it’s dishonest,” said Commissioner Bill James, who is an accountant.

The problem is that, if MeckLINK included the loan, for instance—which it had to supply to start the agency—it would show the agency has more debt than assets. That would give the state cause to pull MeckLINK’s contract for managing hundreds of millions in Medicaid funds—effectively dissolving the agency.

“We would immediately be in violation of the contract and they could literally jerk the rug out from under us,” said Commissioner Dumont Clarke, a Democrat. “I think to call it dishonest is just using inflammatory language.”

State lawmakers have spent a year trying to wrest control of MeckLINK from the county, for reasons including MeckLINK being the only such agency run by a single county, as well as specific concerns about the county’s ability to handle the job.

And, the state has succeeded; the county has to give up MeckLINK next year, probably to Cardinal Innovations, its equivalent to the north. But, these accounting tricks give commissioners a bit more time to figure out that transition and if they can recoup their investment. Although, Chairwoman Pat Cotham was skeptical that would happen.

“We’re probably never going to see that money again,” said Cotham. “This is wishful thinking.”

Ultimately, the commission voted unanimously 8-1 to keep those funds off the sheet.

Correction: Commissioner Bill James voted against the measure.