Nonprofit Clinic in Critical Condition : Health care: Center for low-income patients has faced audits, allegations of insensitivity toward Latinos. Looming bankruptcy may keep the main facility closed.

The Orange County Center for Health, which for a quarter century has functioned as a medical lifeline for as many as 8,000 low-income patients, is now fighting for its own survival.

And the prognosis doesn’t look very promising.

In the past year, the nonprofit clinic endured losses amounting to nearly a third of its annual $1-million budget; weathered audits by county, state and federal health officials for alleged fund mismanagement; failed to file timely tax returns, and stood accused by community activists of ignoring the needs of its largely Latino clientele.

Last month, on the brink of financial collapse, the clinic--which owes the Internal Revenue Service at least $100,000--laid off 24 medical workers and closed its doors to the neighborhood poor. The action left the facility with only six employees, four of whom run the clinic’s only remaining program--an AIDS outreach project, which will probably expire in October.

“It’s very depressing,” said Laura Romey Massena, the clinic’s acting executive director. “It’s extremely disappointing to have 25 years’ worth of work going away and then to see people come in and know they have few other places to go” for medical services.

Even as the clinic’s board of directors considers declaring bankruptcy, officials expect to announce a plan this week to revive the center. But another health care provider will probably be awarded control of the facility, which was the county’s first free clinic when it opened in November, 1969.

“The board and I want to see the doors open, and we are doing whatever we can to have that happen,” Massena said. “You can’t keep the doors closed for very long and expect to recover.”

Meanwhile, the clinic’s virtual shutdown continues to slow medical care to hundreds of its former uninsured and underinsured patients, say county health officials.

Once a major provider of medical and counseling services in the community, the remaining clinic staffers can now only refer patients to one of the county’s 14 other medical facilities for low-income clients. Since the Orange County Center for Health closed, nearby clinics like UCI’s North Orange County Community Clinic in Anaheim report significantly longer waits for patients.

“There are not too many people willing to step up to the plate to take care of these people,” said Russ English, president of the Coalition of Orange County Community Clinics, a county advocacy group. “And the loss of that coverage is significant.”

The clinic’s slow slide into closure began about 18 months ago, when former employees accused longtime Executive Director Marcia Vickery of, among other things, keeping faulty personnel records, misusing grant funds and maintaining a secret bank account.

On two occasions, activists picketed the clinic to protest what they viewed as Vickery’s snubbing of the predominantly Latino community the clinic served.

“She wasn’t hiring grass-roots people who could relate and communicate with the community,” said Seferino Garcia, director of Solevar, an Anaheim-based Latino activist group. “The community was really outraged.”

Vickery, who served as executive director for 20 years and stepped down in June, was unavailable for comment.

The allegations of cultural insensitivity and misuse of funds triggered more than a dozen audits by county, state and federal health agencies. Although the audits revealed serious management troubles, they produced no evidence of legal improprieties, health officials say.

The clinic had misused a drug-abuse counseling grant to pay for mental health services, had unqualified employees performing nursing duties, and filed delinquent tax returns and grant reports, the audits found. Also, the county investigated a clinic savings account containing an estimated $675,000 amassed over the past two years, but found nothing illegal about the funds.

The swirl of controversy damaged the clinic in two distinct ways.

First, it diverted the attention of the clinic’s workers from their primary task of providing medical services. Instead, clinic administrators focused increasingly on restoring their tarnished reputations. And where the clinic was barely keeping up administratively before the onslaught of allegations, the day-to-day business operations quickly started to unravel as many administrative tasks were done late or not at all.

“It’s possible (the clinic) wasn’t maintaining the most accurate accounting records. You do the best you can with the money you have,” said Massena, who joined the clinic in January as its chief executive officer. “In a small nonprofit, you can’t keep up with it all. You have enough trouble keeping up with the normal work flow, much less going back two or three years and pulling up records. I’d be surprised if any other clinic could survive this kind of problem.”

Too, the negative publicity had a chilling effect on the clinic’s grant funding, officials contend. In the past year, the clinic saw $300,000 in annual grants evaporate.

“Any organization interested in giving money to another organization is going to question why all these audits are happening and will be concerned about that,” Massena said.

The clinic is not entirely free of scrutiny yet. The Centers for Disease Control and Prevention in Atlanta is conducting a review of the clinic’s handling of CDC grants, and expects to release its findings Sept. 30. The CDC supplied the clinic with one of its largest chunks of funding, pumping more than $200,000 per year into the clinic since 1989.

“There have been some allegations about possible misuse of funds,” said Clara Jenkins, a CDC grants management supervisor. “But from what we have gathered so far, there is no evidence to support (the allegations) now.”

If evidence of wrongdoing is found, federal officials say they will either request a formal investigation or demand immediate repayment of funds, Jenkins said.

Clinic officials say they already have reached an agreement to pay at least $100,000 due to the IRS in back taxes. Massena said they have asked the IRS that late fees be dropped, but would not say how much the late fees totaled.

The clinic’s problems also have threatened a unique AIDS/HIV outreach program in Orange County. The clinic is still handling the $243,000 program, which educates people about the deadly disease. But because of their uncertain status, the clinic has asked the CDC to transfer the program funds to the Delhi Community Center in Santa Ana.

“It’s the only program of its kind in Orange County,” Massena said. “It would be a shame to lose it.”

CDC officials have made no decision yet about the outreach program funding.

The fallout from the clinic’s maladies could have been avoided or at least mitigated, some community activists maintain. Leaders of the Latino activist group, Los Amigos de Orange County, contend that had the clinic’s management been more forthcoming with internal information, the financial situation that began 18 months ago might have ended differently.

“They kept denying there were problems,” said Amin David, chairman of Los Amigos, a 17-year-old group made up of educators and business people. “It allows us to show a little more anger now. Why didn’t the mechanism to correct this problem move faster than it did? Because now the injured party is the community.”