National Partnership for Women & Families

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Pa. auditor general launches new investigation into CPC organization

Pennsylvania Auditor General Eugene DePasquale this week will launch an audit of Real Alternatives, a not-for-profit that manages a multi-state network of antiabortion crisis pregnancy centers (CPC), the Pittsburgh Post-Gazette reports (Born, Pittsburgh Post-Gazette, 9/26).

Background

Real Alternatives is a not-for-profit that operates in Indiana, Pennsylvania and Michigan. In Pennsylvania, Real Alternatives has secured a $30 million, five-year state contract that expires in 2017. The grant is funded by about $5 million annually from the state's general fund and $1 million in federal assistance program money.

The funding is used at 93 sites monitored by Real Alternatives. Employees at the sites are required to "maintain a pro-life mission," according to the contract. Roughly $604,000 is allocated annually to cover administrative costs, including five full-time and five part-time workers.

Initial state audit

In April, the Pennsylvania Department of Human Services (DHS) released an audit of the organization that raised concerns about how Real Alternatives uses its money.

DHS found that Real Alternatives collects a 3 percent fee from claim reimbursements filed by service providers. The organization then invoices the original claim amount to DHS as "direct services." For example, Real Alternatives would collect $3 from a $100 claim, meaning that the service provider receives only $97.

The audit found that Real Alternatives has collected $497,468 from the fee since July 2012. However, "only a portion of the amount collected has been expended," the audit found.

According the audit, Real Alternatives would not permit DHS to review how the organization used those funds. However, at least part of the money appears to have been earmarked for out-of-state programs. Real Alternatives says on its website that it has assisted 14 states in creating antiabortion counseling programs.

The audit stated, "RA management stated that the fee is used to fund expenses that are not permitted under the grant agreement, such as travel and other expenses to support advancement of the program in other states" (Women's Health Policy Report, 4/29). The audit continued, "Since [DHS] was denied an opportunity to audit the expenses funded by the fee, we could not determine the amount of revenues collected from the Pennsylvania service providers that were used to benefit the PA program."

Further, the audit found that contrary to Real Alternative's claims that the 3 percent fee was voluntary, two of the three service providers interviewed by DHS "assumed that the fee was a cost of doing business" with the not-for-profit (Pittsburgh Post-Gazette, 9/26).

DHS recommendations

DHS called on the state's Office of Social Programs (OSP) to evaluate whether Real Alternative's 3 percent fee is appropriate. DHS said if OSP finds the fee inappropriate, it should recover the funds or ensure Real Alternatives returns the money to the service providers. If deemed appropriate, DHS said OSP should detail potential ways to allocate the money.

In addition, the audit cited several "internal control weaknesses" at Real Alternatives. DHS advised the organization to improve documentation and on-site supervision of service providers. Further, the audit confirmed $485,000 in inappropriate billing, most of which was linked to Pittsburgh Family Development. The auditors advised OSP to recover that funding (Women's Health Policy Report, 4/29).

According to the Post-Gazette, DHS Secretary Ted Dallas also called on DePasquale to launch an audit, noting that the auditor general's office has subpoena power that would allow DePasquale to investigate how Real Alternatives spent the contested funds.

Comments

Sue Frietsche, senior staff attorney with the Women's Law Project in Pittsburgh, said DePasquale's audit should examine not only how Real Alternatives is using the funds resulting from the 3 percent fee, but also "if the quality of the information being provided is worthy of public support."

In an investigation last year, the Post-Gazette found that some of the materials distributed at Real Alternatives' service providers included medical misinformation about abortion care. According to the Post-Gazette, CPCs have previously been found to misinform women about abortion care and to deceive them by not disclosing their antiabortion stance.

Separately, state Rep. Dan Frankel (D) praised the launch of the latest audit. "The Real Alternatives program has many questions with respect to the so-called service that they provide, and the professionalism with which it is offered," he said, adding, "Many of us believe that it is purely an expenditure of state dollars to misinform women about their reproductive health" (Pittsburgh Post-Gazette, 9/26).