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DHHS Statement on Cardinal Innovations

Raleigh

DHHS has released two documents related to our investigation of Cardinal Innovations. First, as required by state law, DHHS Office of Internal Audit has conducted a six-month Follow-Up Assessment based on the Office of State Audit report that was released in May 2017. Second, DHHS Office of Internal Audit has provided an additional interim report to DHHS leadership associated with a site visit it conducted at Cardinal Innovations on October 30.

DHHS continues to have serious concerns with the leadership of Cardinal Innovations. This past weekend the Board of Directors had the opportunity to address issues raised in these audits to restore the confidence of DHHS, the legislature, and, most importantly, the families and consumers who rely upon the services managed by Cardinal. Although the board did terminate CEO Richard Topping from his position, they also removed a board member who had been outspoken regarding his concerns about the organization. Further, despite having been specifically instructed by DHHS not to pay severance to any employee without the express written permission of DHHS, the board has awarded the CEO a large severance payment. These actions indicate a lack of understanding by board leadership of the serious nature of the concerns expressed by DHHS and other public entities.

DHHS will issue a demand letter to Cardinal for payment from their administrative funds the amount paid in severance to the CEO and any other member of Cardinal's leadership. We will engage interim CEO Sutten to assure full compliance with legislative and regulatory items.