AUSTIN (KXAN) — After an investigation that took longer than a year, the Office of the City Auditor in Austin said it found Central Texas Allied Health Institute (CTAHI), a nonprofit City of Austin contractor, committed fraud against Austin Public Health and falsified health records.

According to the investigative report, CTAHI misrepresented over $1.1 million in financial transactions across three contracts with Austin Public Health and was incorrectly paid roughly $417,000 between December 2020 and September 2021 because of fraudulent contract claims. The report also claimed CTAHI falsified its COVID-19 vaccine contract performance by overstating vaccination totals and fabricating patient data.

“This is up there with some of the biggest cases we’ve investigated on my team,” said Brian Molloy, chief of investigations at the Chief of the City Auditor.

CTAHI, President Todd Hamilton, and Dr. Jereka Thomas-Hockaday — both of whom were named in the report — denied the claims made in the report in a statement Thursday.

“When some questions were raised about some of the documents provided to APH a meeting was held and CTAHI agreed to reimburse any overpayments of the grant paid to CTAHI per the four corners of the contract, provided on the spot access to all documentation regarding the contract, and began an internal investigation. CTAHI discovered that a disgruntled employee in President Hamilton’s office did provide false or manipulated documentation to APH at first request and subsequently quit,” they said in a statement.

Molloy said they looked into those claims during the course of their investigation and found no evidence that a former employee was to blame for the falsified records.

“They produced zero documents. They couldn’t even show us one document they thought was falsified they couldn’t show us any evidence tying it to this one former employee so it was quite suspect,” he said.

“I was told by numerous peers who had worked with the city before to not take this contract, but I naively thought I could make a difference because of the pandemic. I will never do business with the City of Austin ever again,” Dr. Jereka Thomas-Hockaday ended her statement.

KXAN has previously done stories with the nonprofit where they told us their mission was to rebuild trust between marginalized groups and healthcare providers. Thomas-Hockaday was also featured in the Austin episode of Netflix series ‘Queer Eye.’ You can read more about her role in the show here.

CTAHI’s three contracts with Austin Public Health were for COVID-19 testing, workforce development, and COVID-19 vaccines, according to the city. Between December 2020 and September 2021, the city said CTAHI submitted 23 claims for reimbursement to APH under the workforce development and COVID-19 vaccine contracts.

“In June 2022, CTAHI signed an agreement to repay Austin Public Health over $375,000 after Austin Public Health’s internal audits found CTAHI submitted ‘inaccurate and falsified payment requests’ in two contracts. As of March 2023, CTAHI had repaid Austin Public Health about $12,500, but had failed to pay over $68,000 in scheduled monthly payments, as laid out in its payment plan,” the city auditor said.

The office said it also referred the issues to the Austin Police Department, due to the potentially criminal nature of CTAHI’s actions.

“The Austin Police Department is aware of the Office of the City Auditor’s Report. An independent investigation is ongoing within the Austin Police Department. As the investigation is still ongoing, no further information is available for release at this time,” a spokesperson for APD said.

The report also noted possible oversight issues at APH, citing that it did not require CTAHI to submit general ledgers that met the terms of its contracts.

“Austin Public Health contract managers confirmed CTAHI was not required to submit general ledgers from an accounting system as required by its contracts,” the city auditor said. “CTAHI’s exemption from this requirement may have enabled it to seek payment for expenses that did not match its actual general ledger.”

Molloy noted it was Austin Public Health who tipped his office off to the possible fraud. APH has an internal auditor.

“APH monitors all contracts to ensure compliance with terms and conditions. During annual monitoring visits, staff identified areas of concern. APH also received a formal complaint, which was referred to the City Auditor for further investigation. APH continues to collaborate with and support the City Auditor’s investigation,” a spokesperson for APH said.

Read the full investigative report below.

The Office of the City Auditor was created by the Austin City Charter as an independent office reporting to City Council to help establish accountability and improve city services. It conducts investigations of allegations of fraud, waste, or abuse by City employees or contractors.

The Office of the City Auditor said it took the following steps to accomplish its investigation objectives:

• Analyzed CTAHI’s contract claims against records CTAHI provided to the City, CTAHI’s original financial records and records from other entities
• Compared CTAHI’s contract performance reports to CTAHI’s original patient records and data from other entities
• Interviewed City staff, the subjects and other witnesses
• Reviewed applicable City Code and policies