DHHS chief Wos tells NC legislators Hauck's services integral to state

lbonner@newsobserver.comSeptember 6, 2013 

The state Health and Human Services secretary sent an email to key legislators Friday explaining why she hired under a state contract a vice president from her husband’s company.

Dr. Aldona Wos wrote that she wanted to tell legislators about the contract in “light of recent media reports.” She said he was integral to the proper functioning of a department in disarray when she took over in January.

The News & Observer reported Friday that Joe Hauck, a vice president on leave from the High Point firm where Wos’ husband is CEO, has received more than $228,000 in payments under a state contract that could pay him up to $310,000 through the end of November. Wos did not respond to an N&O request for an interview about Hauck on Thursday.

The department has been buffeted by news articles about high salaries in recent weeks. This is the first time Wos has defended them publicly. Democratic legislators are trying to pressure Wos to explain her salary and hiring decisions in public committee meetings. Legislators of both parties want to know what’s behind reports of trouble with computer systems that pay Medicaid providers and send food assistance to the needy.

In her email, Wos said Hauck was critical to assembling a management team to tackle deficiencies she found at the agency.

While Wos focused her remarks on Hauck, she repeated many points made in press releases and speeches since January about needing to better manage the department’s finances, get Medicaid spending under control, and get an important computer system running on time.

Hauck “undertook an in-depth examination of financial issues that have historically plagued the Department and has been implementing corrective actions, already achieving millions in savings without compromising services,” she wrote. “He continues to be a strong project manager and assist me with management restructuring efforts.”

She credited Hauck with expanding the internal auditor’s office and coming up with a plan to reduce spending on temporary agency workers in psychiatric hospitals and keep more state employees there.

“Finally, as I am sure you are all have noticed, since taking office, we have placed a renewed emphasis on restoring your trust in the Department,” she wrote. “The Department complied with previously existing policies and procedures in executing these contracts, and as a result of them, all North Carolinians will have a better functioning and more efficient Department of Health and Human Services.”

Merritt, Ransone contracts

The agency released details of Hauck’s and several other personal services contracts Friday.

Among the largest contracts are those with former state auditor Les Merritt and management consultant Carol Ransone.

Merritt, who has been paid $58,500 so far, has a year-long contract expiring in May capped at $312,000 to work as chief financial officer in the department’s mental health division. The contract includes two one-year renewal options.

Ransone, a management consultant from Charlotte, was paid $118,753 on a contract from Feb. 27 through July 31 for work on the Medicaid payment system.

Republican Rep. Nelson Dollar of Cary, the chief budget writer in the House, said he knows the long history of management and financial problems Wos is trying to solve, and thinks she made a good case for hiring Hauck to help.

“I think the secretary laid out a very strong case for why she sought out an individual of Mr. Hauck’s experience and expertise to help her work out some very serious issues within the organization of the Department of Health and Human Services,” he said.

The department is putting together a major reorganization, Dollar said, and Hauck’s years of management experience are of good use “to fix what have been chronic management problems in that department going back any number of years.”

Hauck has worked with Wos’ husband Louis DeJoy at New Breed Logistics since 1997. He is currently vice president of sales, marketing and communications for the company. He previously worked as program director for Eaton Corp.

Recipients of Wos’ email

Wos sent her email to 17 legislators, 16 of them Republican and none openly critical of salaries and raises at the agency.

House Minority Leader Larry Hall, a Durham Democrat, said he wishes Wos had responded to a letter he wrote recently, inviting her to address legislators this week.

Wos in her email did not address key questions about the value of the contractors she hired, Hall said, and there’s much more to know.

The agency is having major problems paying Medicaid providers, he said, and maybe the money spent on contractors could have gone to address computer problems.

“That doesn’t address the question we have,” he said. “How do we determine what the rate should be?”

Bonner: 919-829-4821

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