Due to the weather, some customers may experience late delivery of The Roanoke Times. We apologize for the delay.
It's the second time in two years that the attorney general has cited the state's restriction on some health care charities.
Friday, July 26, 2013
For the second time in as many years, nonprofit organizations with a health care mission are being told in some cases that their state funding violates Virginia’s constitution.
In a recent advisory opinion, Attorney General Ken Cuccinelli determined that a total of about $1.8 million in state funds to 12 nonprofits is impermissible.
The Virginia constitution forbids the General Assembly from making “any appropriation of public funds ... to any charitable institution which is not owned or controlled by the Commonwealth,” Cuccinelli wrote in the June 28 opinion.
It’s not the first time the issue has come up. In January 2011, Cuccinelli issued a similar ruling that led to a broader review of about two dozen nonprofits and more than $12 million in state funding they received.
The crux of the issue is that while the constitution forbids unrestricted state funding to private charities, that prohibition is not absolute. Funding can be deemed appropriate, for example, when there is a contract between the state and a nonprofit that spells out what public services are being supported with taxpayer dollars.
Two years ago, virtually all of the nonprofits affected by Cuccinelli’s ruling had their funds restored after contracts were established to replace informal agreements.
Cuccinelli has raised no objections to the missions of the nonprofits, which range from a free clinic for AIDS patients in Richmond to a mobile doctors office that makes the rounds in far Southwest Virginia.
“The question is not whether these proposed [budget] amendments serve noble purposes and they would provide needed relief — unquestionably, they are and they would,” Cuccinelli wrote in his 2011 opinion.
“The question is one of fidelity to the text of our constitution.”
Just as the 2011 opinion did, the more recent directive from Cuccinelli is causing consternation in nonprofit circles.
Linda Wilkinson, CEO of the Virginia Association of Free and Charitable Clinics, recalled the “significant negative impact” of her organization being told in 2011 that its state funding was unconstitutional.
“Based on my association’s experience two years ago and how disruptive it was for us, I would imagine that these other nonprofits are having a similar experience,” Wilkinson said.
One of them is The Health Wagon, a mobile clinic that provides free treatment in some of the medically underserved areas of rural Appalachia.
Cuccinelli’s opinion states that $153,424 for The Health Wagon in the state’s two-year budget is impermissible.
“It’s a pretty significant amount, because we kind of run things on a shoestring,” said Teresa Gardner, executive director of the nonprofit.
The Health Wagon has been receiving state funds for several years, Gardner said, and established a contract with the state health department in 2011 to comply with Cuccinelli’s first opinion.
Gardner said she had no idea why the state funding was deemed inappropriate this time around.
Likewise, the executive director of the Virginia Dental Association Foundation said he was not sure why his organization wound up on this year’s list of 12 nonprofits with improper state funding.
“It was kind of a slash-and-burn opinion that got everybody” when the issue first came up in 2011, Terry Dickinson said.
The Virginia Dental Association Foundation set up a contract with the health department in 2011, only to be told that about $30,000 in state funding still violates the constitution’s prohibition on such appropriations.
Dickinson said he hopes the issue will be resolved in the manner it was two years ago. But, he added, “I don’t know if this is going to put it to bed or not.”
Cuccinelli issued his most recent opinion at the request of Dr. Bill Hazel, secretary of the state Department of Health and Human Resources.
The June 28 opinion from Cuccinelli did not explain in detail why Hazel sought a legal interpretation of certain budget appropriations.
Officials in both the attorney general’s office and the department of health and human resources declined to provide a copy of Hazel’s letter seeking the opinion.
“That is confidential attorney-client privileged information which we cannot release,” said Brian Gottstein, a spokesman for Cuccinelli.
Matt Cobb, deputy secretary of health and human resources, said that questions about the funding came up during a routine review, and that some of the items flagged for legal analysis were new appropriations.
“It’s just the process we have to go through,” Cobb said.
In some cases, nonprofits that lack legitimate contracts with the state can still receive funding through the procurement process, Cobb said.
At least one of the charitable organizations cited in Cuccinelli’s opinion did not seem concerned about the potential loss of state dollars.
“It would appear as though the attorney general and his staff do not have complete information,” said Betty Dean, a spokeswoman for Didlake, a Manassas-based charity that provides vocational services to people with disabilities.
The $400,000 in state funds cited in the opinion does not actually go to Didlake, Dean said, but in fact is channelled through the state Department of Aging and Rehabilitative Services, which in turn contracts for services.
“No funds are received by Didlake until after services are delivered to individual citizens in strict compliance with contractual terms and conditions,” Dean said.
If nothing else, advocates for nonprofits said, a request for legal clarity on state funding seems to be leading to even more confusion.
“I wish I knew what is driving this,” said Wilkinson of the Association of Free and Charitable Clinics.
“I think it would be helpful for nonprofits to understand the legal basis for such an impactful opinion,” she said.
With that understanding, “we can align ourselves with whatever policy or procedural mechanisms we need to move forward and get back to the business of helping people and our communities.”
Weather JournalNew batch of moisture for PM