Jul. 17—TRAVERSE CITY — The region's largest provider of mental health services last year paid three law firms a total of $130,000 to investigate employees, clarify board rules, and handle civil litigation, legal invoices show.

Some Northern Lakes Community Mental Health Authority board members expressed concern about these legal expenditures, suggesting they may be a symptom of a budget approval process that lacks transparency.

"That seems like a high amount and there should be a budget line item for legal so we can tell," said Tony Lentych, who was appointed to the board in May.

"High legal fees aren't necessarily bad if you can explain them," Lentych said. "If it went over, it might be a concern and the board should be made aware. It's a question that should be answered."

Interim CEO Joanie Blamer said the 2021 fiscal year (Oct 1-Sept 30) budget included $390,000 for professional fees and dues, a broad line item encompassing accreditation costs, financial audits, unspecified fees and dues, as well as general legal services and legal fees related to Medicaid administration.

A longstanding board policy places a $15,000 limit on expenditures by the CEO for anything not budgeted and not directly related to providing services to clients, and Blamer said this limit was not exceeded in 2021.

"The $15,000 executive limitation placed on the CEO is for expenses unrelated to service delivery," Blamer said in an email. "Legal fees are related to service delivery as professional activities."

Drilling into the nitty-gritty of legal and other specific expenditures included in the $83 million organization's annual budgets may prove more complicated than some board members would like, however.

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.

But that annual report, available on the organization's website, does not contain line-item expenditures, which also aren't shared with the board during budget discussions, members said.

"I have not seen detail, I don't think any board members have seen detail, and I think what you've uncovered here is an example of how hands-off, and I think irresponsible, the board has been," said Ty Wessell, a Leelanau County Commissioner and Northern Lakes board member.

"That goes back to our governance and several of us are concerned," Wessell said.

Blamer responded to a request for a copy of the organization's line-item budget for FY2021, with copies of an audit report and financial statements.

These documents also were previously provided to board members, contain general lists of revenues and expenditures, and are publicly available on the organization's website.

Meeting minutes show board members review the budget with staff beginning in July or early August, discuss the budget at their August meeting, then approve the budget for the forthcoming fiscal year, which begins Oct. 1.

When asked why board members do not see a more detailed line-item budget before they approve it, Blamer said the organization's financial management adheres to governmental accounting standards, adding that the latest audit was exemplary.

"As has been the practice for many years, it (the audit) is approved by the Northern Lakes Community Mental Health Authority Board in April every year," Blamer said.

Wessell and others said this may be the way the organization's budget has been determined in the past, but the process is no longer satisfactory.

"I do plan to ask for a lot more detail in the future," Wessell said. "I have gone on record as saying I believe the board has responsibility to be more in the decision-making loop."

Penny Morris, a Grand Traverse County Commissioner who serves on Northern Lakes' board, said she'd like to see specifics during budget discussions, and have the overall workings of the organization, including its finances, be more available to the public.

"What I recall from last year's budget process is that we did not review line-item spending," Morris said. "Making this a great time to re-visit our governance model and provide the public with better transparency."

The enabling resolution that created Northern Lakes in October 2003, included a reference to the Carver Model style of governance, which states the board has only one employee — the CEO — and defers most human resources, management and operations decisions to that employee.

Some say this decades-old decision is at the root of the organization's present management problems.

"One of the biggest criticisms of the Carver method, its biggest weakness, is crisis management," Lentych said. "And that seems to be what we're stuck on."

Mary Marois, on the board since 2017, said she agrees with colleagues Lentych, Morris and Wessell; the organization's governance style requires improvement.

"It's time to give the board back its inherent responsibility to manage the organization," Marois said. "I don't mean day-to-day operations, and I don't mean mircro-manage, but to have Northern Lakes Community Mental Health in the control of the board of directors where it belongs — and not in the hands of the CEO."

The board receives monthly financial reports in the board packets, which list contracts with some direct-care vendors in a line-item format. But these financial reports do not include specific administrative or legal expenditures, for example, and staff salaries are listed as a total figure and not individually, records show.

The $130,000 that the organization spent in 2021 for civil, internal and personnel issues were not listed in financial reports included in board packets, and came from invoices three law firms submitted to Northern Lakes and the organization provided to the Record-Eagle in response to a Freedom of Information Act request.

A portion of those fees were incurred when an anonymous tip, called in to an ethics hotline, prompted Blamer and other members of the organization's executive team to direct an investigation into the personal lives of two employees.

Blamer and staff with the organization's human resources department are referenced in the invoices and in other documents related to the investigation as directing the effort.

Marie Belville and Rob Ordiway, who documents show were a focus of the anonymous tip, are no longer employed with Northern Lakes and subsequently filed complaints with the Equal Employment Opportunity Commission, accusing the organization of harassment and of fostering a hostile work environment.

Belville declined to comment on the internal investigation, although she confirmed her EEOC complaint remains active. She said she has retained Ann Arbor attorney David Nacht, who, in turn, also declined to comment.

Ordiway had been employed as a supervisor at Northern Lakes and the EEOC's Detroit Field Office earlier this year dismissed his complaint, records show, after investigators learned Ordiway secured comparable employment with another community mental health organization.

"I loved my job and I miss my team," Ordiway said. "But getting fired from Northern Lakes doesn't hold much stigma because so many good people get fired from there. Local businesses don't even count it against you and it certainly didn't stop me from getting another job."

An email Ordiway sent in April to the Northern Lakes board, and subsequently shared with the Record-Eagle, states Northern Lakes human resources staff in July 2021 interviewed several employees assigned to Ordiway's team under the pretense of learning how well they'd weathered the COVID-19 pandemic, then asked about Belville and Ordiway.

When the interviews uncovered rumors, but no direct evidence, of a romantic relationship, Ordiway said Blamer hired Keith Brodie, a Grand Rapids attorney, who on July 22, 2021, and July 26, 2021, introduced himself as an investigator during interviews and phone calls with many of the same employees and with at least one person outside the organization.

Blamer declined to comment on the reported pretense of these interviews, stating employment law precludes her from speaking publicly about employee issues.

Brodie also previously declined to comment.

Legal invoices and mileage expenses from Barnes & Thornburg L.L.P., citing work by Brodie and others with the firm, confirm interviews were conducted by Brodie on these dates, as do transcripts of the interviews provided to the Record-Eagle.

Documents show Ordiway was terminated when a person outside the organization said in an interview that she had witnessed evidence of a relationship between Ordiway and Belville.

Belville, at one point, had worked on the team Ordiway supervised, then later switched to another area of the organization and the two did not work together for weeks prior to the investigation, records show.

Blamer told Ordiway that he had engaged in nepotism — a violation of company policy — and that he did not tell the truth during an interview and therefore was not trustworthy, notes from a July 27, 2021, separation meeting state.

Ordiway on July 27, 2021, was given the option of resigning and refused, records show.

The code of conduct on Northern Lakes' website defines nepotism as advocating for the employment or advancement of a relative, but does not mention romantic relationships between employees.

A new code of conduct, not posted on the organization's website but circulated internally shortly after Ordiway was fired, contains language prohibiting dating relationships between a supervisor and a subordinate, records show.

"Any such relationship that exists as of the date of approval of this policy may be continued provided that it does not cause disruption in the workplace or violate any other policy of Northern Lakes CMHA," the updated policy manual states.

"Such relationships must be brought to the attention to the Human Resources officer," the policy states. "Any such relationship which may develop in the future must be immediately disclosed to the Human Resources Officer."

The human resources officer has the option of reassigning or terminating one or both employees if they cannot work out a solution themselves, the policy states.

"My concern is not that an investigation was launched, but rather the unethical manner in which the investigation was mishandled," Ordiway said in his April email to Northern Lakes board members.

"Medicaid/public funds were used to interview people who were not, nor ever have been, employed by NLCMHA to inquire about my personal life outside of work," Ordiway said. "I am not even sure how this is legal?"

The remainder of Northern Lakes' 2021 general legal services were provided by attorneys with Cummings, McClorey, Davis & Acho PLC. and P. David Vinocur PLC, records show, for a clarification of board rules, additional legal research requested by Blamer, representing the organization in civil and probate court, preparing settlement agreements, attending closed sessions of the board and responding to FOIA requests.

The next regular meeting of the Northern Lakes board will take place on July 21 at 2:15 p.m., with a meeting of the committee of whole just prior to that, beginning at noon.

This will be the first board meeting conducted without board members Nicole Miller and Justin Reed, who were removed from their posts in a 4-2 vote by Grand Traverse County commissioners during a special meeting Tuesday, as previously reported.

Commission Chairman Rob Hentschel expressed concern about Miller's and Reed's support of Blamer for CEO after she was accused of seeking to communicate with Northern Lakes board members outside official channels — a possible violation of board rules — and doing so while she was a candidate for the organization's top job.

Hentschel, in a phone call, also weighed in on the organization's 2021 legal expenditures.

"I don't know if that amount is typical, but I do think the money would have been better spent on providing services to people with mild to moderate mental health needs," Hentschel said.

Community mental health services are largely financed with public money strictly allocated for adults with serious mental illness, children with serious emotional disturbance, individuals with intellectual and developmental disabilities, and people with co-occurring substance use disorders.

Securing public funding for people experiencing mild to moderate mental health needs has been increasingly problematic, and is a frequent discussion point of the Northern Lakes board, records show.

Regular board meetings are open to the public and rotate locations, with the July meeting scheduled to take place at Kirtland Community College in Grayling. There are remote options, with dial-in and log-in details included in the meeting agenda, posted on the organization's website approximately one week before the meeting.