Forensic audit to study books of HealthChoice program after allegations of "peculiar" transactions

DETROIT, MI (WXYZ) - Startling revelations Thursday revealed more allegations of fraud in Wayne County.

Now experts are being brought in to study the books of HeathChoice, a county health insurance program for small businesses.

The new allegations of 'peculiar' transactions and contracts were revealed today at a HealthChoice board meeting.

"I guess I'm a little aghast," said Burton Leland, interim board chairman of HealthChoice and a Wayne County Commissioner.

The news comes in the wake of the firing of Michael Grundy, one-time HealthChoice Director and assistant county executive. Grundy is alleged to have taken kickbacks and now there are new questions about contracts he allegedly signed without board approval or approval of county attorneys, according to Interim HealthChoice Director Chris Johnson, who has been brought in to take over the top job.

Now the board wants to take a closer look at the books for the last three years.

HealthChoice is a Wayne County health insurance program for small businesses and their employees.

The FBI is already investigating as part of its probe of Wayne County government.

One specific contract board members questioned today was a $100,000 deal for a local vendor to design a new database for the health insurance program.

The database is set to be rolled out next month. Board members and county attorneys say they never saw the contract.

After Grundy was fired, and county accountant Sharon Mattic suspended, some of the board members started taking a look at some of the numbers.

"There were transactions that we're not sure were HealthChoice related transactions so those types of things are making us think that maybe we need to dig a little deeper," said Alisha Bell, a Wayne County Commissioner who sits on the HealthChoice board.

Because of what they call ‘peculiar transactions”, board members voted today to bring in accountants for a forensic audit at a cost of up to $250,000.

Board members Thursday also learned of seven employees who were being paid, but board members never knew they were on the payroll.

Some board members are amazed that someone they thought had great credentials, Michael Grundy, was involved in questionable, and perhaps criminal, activities.

"I'm quite surprised of the things that we have found so far, quite surprised," Bell said.

But Tim Killeen, another Wayne County Commissioner who sits on the HealthChoice board, says there were hints something was wrong.

"I think people had suspicions that everything wasn't quite kosher," Killeen told Action News.

Board members Thursday also voted to hire outside attorneys at a cost of up to $30,000.

Sources say if the FBI decides to question board members during the federal investigation, the in-house county attorneys would not be able to represent them.

Board members say the forensic audit should be completed by the end of March.