Increased efforts to close Orange County’s various health disparities — like the pandemic’s disproportionate impact on the Latino community — have stalled after a major contract with a local nonprofit fell apart.

In a rare move, the board of a key nonprofit group is turning down $15 million in federal grant money being offered by the county Health Care Agency, citing concerns about a lack of transparency about where the money would go.

Top leaders at the Multi-Ethnic Collaborative of Community Agencies (MECCA) declined the CDC-funded money at a board meeting last week, after the county placed the contract multiple times on Board of Supervisors agendas for final approval.

Despite the rejection and internal controversy surrounding the contract, OC public health staff are still recommending the $15 million proposal to county supervisors next week.

Dr. Reza Karkia, the MECCA board’s vice president, said he voted to decline the funds for several reasons, including “lack of transparency, and the matters not coming before the board by the executive director in the full scale, to the full board.”

“I did not feel comfortable, number one, because these types of things require full transparency – who’s going to get these funds, how it is going to be working,” Karkia said in a Friday phone interview.

The $15 million in CDC grants can be helpful for community health efforts, like vaccinating hard hit communities, if it’s spent properly, said Karkia, a former state health commissioner and Cal State Dominguez Hills administrator.

“But my question for the executive director of MECCA was, of the seven agencies that constitute MECCA, who gets how much, and she had no answer for me. She did not know,” Karkia said.

​​”If nobody knows who is going to get what, that is a problem. I have a problem with that.”

MECCA’s executive director, Iliana Soto Welty, responded to an interview request with a written statement, saying the board turned down the funds over “concerns about the undefined elements within the grant such as the structure and the process that would determine MECCA’s role, responsibilities and requirements in administering the funds to the subcontractors for the County.”

Under the proposed no-bid county contract, the nonprofit group MECCA was supposed to receive $15 million in federal CDC health grant funds and distribute the vast majority of it to other, yet-to-be named organizations.

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The pandemic has laid bare the health disparities facing underserved communities, with Latino communities in particular facing disproportionately high COVID caseloads and deaths among county residents.

Community outreach groups like Latino Health Access and the Coalition of Orange County Community Health Centers have been critical in getting testing, education and isolation resources to residents throughout the hard hit communities of Orange County.

But the funding for such work often falls short of the need.

To help address that gap, county health officials got a $23 million grant from the CDC – which the county calls Equity in OC – to reduce health disparities among Asian-Pacific Islanders, Blacks, Latinos, people with disabilities, LGBTQ people and seniors.

County Health Care Agency executives are looking to diversify service delivery, working with smaller community groups to address things like food insecurity, the digital divide, safety, access to green space and participation in society.

But the contracts for that grant have been postponed multiple times since September amid questions about how the county went about selecting vendors without competitive bidding.

And now, the largest portion of the grant – the $15 millon to MECCA – has been turned down by the contractor.

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As Voice of OC reported on Oct. 29, county public health officials’ approach to the contract triggered questions about how the proposals are created, and whether it’s putting taxpayers at risk by flouting safeguards meant to protect against cronyism and corruption.

That article prompted questions from MECCA’s board members who had concerns about the nonprofit’s ability to properly oversee the money and whether the nonprofit’s executive director could answer basic questions about whether funds are going. 

The MECCA board convened last Monday and a majority voted to reject the funds and informed the county Health Care Agency Director Dr. Clayton Chau, according to board members and Chau.

As for concerns about the board being kept out of the loop on the details, Welty said she told most board members about the grant in August.

“The majority of the board members were informed of the opportunity for MECCA to be a contractor for the CDC grant in August and were supportive at that time,” Welty wrote.

“Our board’s policies and processes have never been to vote on contracts or grants. As the Executive Director, I provide updates to the board, including any grants and contracts received at our board meetings,” she continued. “The board requested more details about the grant after it was highlighted in a recent article and that’s when their concerns were raised.”

But Karkia says he was not kept in the loop.

“It didn’t come before the board. And all of a sudden, you know, I heard that such a thing is going on,” he said. “I didn’t know who is getting these funds, how it is going to be distributed – and I personally didn’t feel that our apparatus is strong enough to handle a $15 million contract.”

MECCA board member Nahla Kayali expressed similar concerns in a phone interview.

“Even when they explained [the $15 million contract], it wasn’t really clear to us,” said Kayali, executive director and founder of Access California Services, a nonprofit focusing on health and human services in OC’s Arab-American and Muslim-American communities.

“As a board member, we are a fiduciary sponsor. So … if anything goes wrong, we are the ones who are responsible,” she added.

“We felt this is a huge amount, that MECCA never had this amount of money to handle. It was explained to us in two different scenarios that MECCA is only going to get $600,000. Then we heard it’s $15.3 million. So the explanation was not there to let us know.”

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Concerns about MECCA staff’s ability to handle the funds were also raised in a recent letter from a consultant who quit in early September.

In the Oct. 27 letter to Health Care Agency’s chief compliance officer – and copied to MECCA’s board – nonprofit consultant Michael Arnot said he resigned over serious concerns about Welty’s management of finances and ability to handle the $15 million in proposed federal funds.

MECCA is two years behind in getting an independent financial audit, and has no chief financial officer, Arnot wrote.

The director of finance and administration “does not have a finance background” and “does not know how to use MECCA’s financial management software beyond making simple entries,” he added.

Arnot also said the nonprofit doesn’t have a strong team to oversee the $15 million contract and MECCA’s board members “were being kept in the dark about what funding was being secured, what it was intended for, and how it was being managed.”

He also wrote that he “directly observed MECCA’s current Executive Director blacklisting community organizations from participating in County level stakeholder meetings and retaliating against organizations by reducing funding…based solely or primarily on her personal animus toward their executive directors.”

[Click here to read Arnot’s letter, which Health Care Agency officials released in response to a Public Records Act request from Voice of OC.]

Asked by Voice of OC for her response, Welty said “there was no retaliation against any MECCA agencies or partners.”

“MECCA has been doing excellent work in the community for over a decade and is committed to advancing health equity and move forward our mission to eliminate disparities,” she added.

Welty did not respond to a follow up message asking for her response to the other concerns Arnot raised, including about financial oversight.

Arnot’s letter was “very concerning,” Karkia said in the interview, adding he “definitely” shares many of the same concerns Arnot raised in the letter.

Karkia and Kayali were the only board members to return messages for comment.

Health Care Agency officials have finished their investigation into the concerns Arnot raised in his letter, Chau’s office said in a written statement to Voice of OC.

Chau didn’t respond to a follow-up message asking what the findings were.

As for what happens now, Health Care Agency officials said they will bring back the grants for approval at the Board of Supervisors’ meeting next week.

“The CDC grant is still active. Our current plan is to continue the item until the November 16 Board of Supervisors meeting,” Chau’s office said in a written response to Voice of OC’s questions.

That agenda item continues to propose MECCA for the $15 million in CDC funds to distribute to other organizations.

Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.


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