New London - From June 2011 to December 2012, the three top administrators at Sound Community Services used agency credit cards to travel, dine and stay at hotels across the country with a frequency more befitting that of a top salesman with a big expense account than leaders of a local nonprofit mental health agency.

Sound Community Services - the region's largest provider of outpatient psychiatric services for adults - receives most of its $10 million annual budget from state Department of Mental Health and Addiction Services and the federal government. It has been under scrutiny by state officials since the summer over issues including high employee turnover, complaints about a tyrannical management style and a lack of medical professionals to prescribe and monitor psychiatric medications for clients.

Now, the office of the State Auditors of Public Accounts is conducting a review of the agency after financial questions were raised about the existence of a consulting firm being run within the agency.

The agency's 12-member board of directors has maintained its support for the administration of President and Chief Executive Officer Gail Lawson, Chief Financial Officer Cindy Kirchhoff and Chief Informatics Officer Christopher "Heath" Bish.

The three charged a combined total of $222,507.61 in expenses on their agency American Express cards during that 18-month period, a review by The Day shows.

The charges were for airline tickets, meals, hotel stays and car rentals, as well as purchases at such retailers are Walmart, Home Depot and Bed, Bath & Beyond.

During that same period, the three were paid their salaries - about $135,000 for Lawson, $107,000 for Kirchhoff and $99,000 for Bish - in addition to a combined nearly $50,000 in earnings marked "other dollars" on payroll statements. Bish received $19,383, Lawson tallied $18,921 and Kirchhoff, $11,264.

None of the three responded to requests to comment for this article. DMHAS spokeswoman Mary Kate Mason said the state agency would not comment until after the state auditors have finished their work.

"Any information related to funds expended by the senior leadership of Sound Community Services has been turned over to the Auditors of Public Accounts for additional investigation," she said. "DMHAS cannot comment about the propriety of these expenditures until the matter has been thoroughly investigated and a final report issued."

In response to a whistleblower's complaint, state auditors this winter began examining the payroll and charge card statements of Lawson, Kirchhoff and Bish, to determine whether expenses they incurred and payments they received for consulting work were accounted for appropriately and kept separate from state funds used to support Sound Community Services programs. State Auditor John Geragosian said last week that the review is ongoing, and declined to comment further.

In a Feb. 27 email to DMHAS and forwarded to Sound Community Services, the auditors asked for copies of consulting contracts, detailed information on consulting-related expenses, and an explanation for $360,656 in "other expenditures" listed on an audited financial statement for fiscal 2011-2012. The email instructs Lawson and Kirchhoff to provide the answers by Thursday.

From iTunes to casino

Among documents being reviewed by the auditors are copies of American Express charge card statements and payroll records for the three for the 18-month period ending in December, which also were obtained by The Day.

A review of these documents by The Day shows that Lawson, Kirchhoff and Bish purchased a total of 108 airplane tickets on the nonprofit's American Express cards to destinations such as Baltimore, Nashville, Chicago, Omaha, Denver, Phoenix and Fort Lauderdale. They charged 95 meals at seafood restaurants in Baltimore, steakhouses in Chicago, barbecue grills in Nashville, a historic inn in Gettysburg, Hooters in Paramus, N.J., and dozens of other eateries from Providence to Clearwater, Fla.

They rented cars at least 19 times in places such as Hanover, Md.; Erie, Pa., Cambridge, Mass., Cleveland and Tulsa, among others. They stayed at hotels 56 times, including Hiltons and Hyatts in Chicago, Nashville and Washington, D.C.; at the Gaylord Palms Resort in Kissimmee, Fla.; the Omni in Orlando; and the Crowne Plaza in Philadelphia.

They patronized local establishments, too, including the Mystic Marriott, The Spa at Norwich Inn, Tony D's, the Recovery Room and Enterprise car rental in New London.

They also used the agency cards for $10,530 in purchases at Home Depot; $3,008 at Kloter Farms, which sells furniture, sheds and gazebos; $1,800 for business outfits at Lands' End; $999 at Walmart; $640 at Bed, Bath & Beyond; and undisclosed amounts at the Big East Casino in Atlanta, iTunes, the Apple Store in Providence, Target, Wholefoods, Wolferman's English muffins, Paypal and Timbuk2, a baggage outfitter.

They also charged purchases from Dell and Best Buy.

In response to questions about the information being reviewed by state auditors, Jane Cable, the Old Lyme resident who is chairwoman of the 12-member board, issued a statement.

"Audits are to be expected and independent and state auditors have always been satisfied with our procedures for accounting for income and expenses," Cable said in an email. "We will be able to discuss the details of this matter only after the auditor has reviewed the records."

Questions about consulting company

Lawson, Kirchhoff and Bish are the principle staff of a consulting company that advises similar nonprofits about implementing the CareLogic electronic medical records system produced by the Nashville-based software company Qualifacts. In 2010, Sound Community Services paid $105,239 to Qualifacts for the software system, according to the agency's IRS 990 form.

Lawson is pictured on the Qualifacts website endorsing CareLogic software under the phrase, "Sound Community Services experiences a 50 percent increase in revenue with CareLogic without increasing staff size." Bish was employed as technical lead at Qualifacts before coming to Sound Community Services about four years ago.

In response to a question from DMHAS for a financial review that preceded the current state auditors' review, Lawson and Kirchhoff said the consulting company had contracts with similar agencies in Ridgewood, N.J.; Illinois; Little Rock, Ark.; Chicago and Oregon, as well as five others in Connecticut.

In addition to Lawson, Kirchhoff and Bish, five other Sound Community Services' staff also do work for the consulting business, according to information given to the state by Lawson and Kirchhoff.

They also were asked to explain why an agency whose primary mission is to provide mental health services is involved in consulting about electronic medical records systems. In response, the state was told that the consulting firm was created to generate additional revenue for Sound Community Services to offset about $275,000 in costs associated with underfunding of the employee 401K plan and related accounting, IRS and attorneys' fees.

But instead of generating income for the nonprofit, the consulting business appears to be losing money.

In a "fiscal year-end audit reconciliation" statement provided to DMHAS, income for "consulting activity" in fiscal 2012 was listed as $67,865. Consulting-related salaries and wages were listed as $47,960. These salaries plus operating and other expenses totaled $70,076, meaning the consulting business ended the fiscal year with a $2,211 deficit. How those funds were made up is unclear.

In the financial statement for the 2012 fiscal year that the agency was required to submit to DMHAS, "other income" is listed at $195,387, a major increase over the previous year's "other income" figure of $37,138. The statement, prepared by the agency's auditors, CohnReznick of Glastonbury, states that $127,500 of the "other income" came from Medicaid incentive payments to the agency for "meaningful use" of electronic medical records technology. The incentive was made available as part of the American Recovery and Reinvestment Act of 2009. The source of the remaining "other income" was not explained.

In response to questions about Sound Community Services finances and other issues with its operations, Mason, the DMHAS spokeswoman, said in a statement that the department "continues to actively monitor Sound Community Services to ensure that the state-funded programs run by Sound Community Services are meeting the needs of the department's clients.

"The Department of Mental Health and Addiction Services has received and investigated a number of complaints related to Sound Community Services," she said.

The department and the auditors "are reviewing fiscal information to determine if the revenue and expenses associated with the consulting business has been separately identified and reported," she said. "If, upon conclusion of the State Auditor's investigation, any improprieties are identified, DMHAS will take immediate necessary steps to ensure that taxpayer funds are used appropriately and that clients are provided the highest quality care."

j.benson@theday.com

A GLIMPSE OF THE CHARGES

Some of the charges listed on the statements for Sound Community Services American Express cards issued to President and Chief Executive Officer Gail Lawson, Chief Financial Officer Cindy Kirchhoff and Chief Informatics Officer Christopher "Heath" Bish:

When

How much

Recipient

Sept. 9, 2011

Sept. 9, 2011

$1,098

Hyatt Regency hotel, Chicago

Oct. 21, 2011

$408

Rusty Scupper, Baltimore

Oct. 24, 2011

$459

Hyatt Regency, Baltimore

Jan. 20, 2012

$567

Airfare to Tampa

Jan. 21, 2012

$286

Airfare to Fort Lauderdale

Feb. 12, 2012

$733

Budget rental car, Tampa

March 7, 2012

$1,837

Hilton Nashville

March 14, 2012

$213

Cantino Laredo, Nashville

April 11, 2012

$431

Amtrak

April 19, 2012

$858

Hilton Chicago

July 7, 2012

$443

Airfare to Nashville

July 24, 2012

$232

Tavern on Rush, Chicago

July 27, 2012

$766

Crowne Plaza, Chicago

Aug. 11, 2012

$363

Hilton Nashville

Aug. 14, 2012

$405

Airfare to undisclosed location

Aug. 27, 2012

$718

Airfare to undisclosed location

Aug. 30, 2012

$408

Sheraton, Erie, Pa.

Oct. 21, 2012

$3,269

Omni Orlando Golf Resort at Champions Gate

Oct. 22, 2012

$322

Amtrak