The Delaware Auditor of Accounts finds no evidence of fraud following the performance audits of four opioid settlement grant recipients.
After Kent County nonprofit Code Purple was flagged for fraudulent use of opioid settlement funding in June 2024, the commission in charge of distributing those funds has been overhauling its grant distribution system.
While the Prescription Opioid Settlement Distribution Commission (POSDC) has been developing better grant-awarding procedures and guardrails, State Auditor Lydia York has been reviewing the finances of 12 additional grant recipients chosen at random.
Thursday, the auditor announced the completion of four audits and found three of the organizations to be in complete compliance with their grant agreements.
The fourth organization, Higher Ground Outreach, was unable to provide supporting financial documentation to monitor grant expenditures, but York stresses this does not correlate to fraudulent use of funds.
“We believe that they are doing the work, but they just didn't have the infrastructure or the controls in place to best document that work. But there's just no evidence of fraud," York said.
She explains Higher Ground Outreach is a two-person operation that focuses on service delivery without a background in business or accounting.
As the commission moves forward, York says it’s important to ensure these types of community-level organizations are not at a disadvantage when applying for these grants, but if they are, the state needs to "adjust its expectations in some respects," but also needs to ensure these smaller operations get the support they need in order to comply with grant guidelines.
“These findings — and you know, we may or may not see this in the future — but they do demonstrate the challenges that may be typical of smaller organizations with a more limited capacity, but they can actually get to the granular level that these grants were intended to reach."
York says audits of the remaining organizations are still underway with no set timeline of their completion.
As far as how the settlement funding is being spent, York says it can be difficult to measure direct correlation, but she notes opioid deaths have been declining in the First State.
The Department of Justice has yet to provide a public update on the status of Code Purple, noting it cannot comment on an ongoing investigation, but that no charges have been filed at this time.
The POSDC's next full commission meeting, and first with new Co-Chair and Delaware Division of Substance Abuse and Mental Health Director Joanna Champney who replaced former Lt. Gov. Bethany Hall-Long, will be held on March 3.
