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Independent auditor to evaluate UMMS board policies

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Posted at 2:57 PM, Apr 01, 2019
and last updated 2019-04-02 08:45:53-04

BALTIMORE — The University of Maryland Medical System has contracted an outside auditing firm to review its board's governing policies, procurement procedures, and conflict of interest policies, confirmed the medical system's Interim President and CEO John Ashworth in an interview Tuesday.

The review comes in the wake of an unfolding controversy in which UMMS purchased $500,000 worth of books from Mayor Catherine Pugh's business, Healthy Holly LLC. At the time of the purchases, Pugh was a State Senator and a member of the UMMS Board. She has since resigned from that post, and returned $100,000 for the last book order. The deal drew the ire of many as a potential conflict of interest, as well as a potential tax issue for UMMS as the non-profit labeled some of the book purchases, as well as other financial transactions, as grants in their 990 tax forms.

READ MORE: Kaiser Permanente bought thousands of 'Healthy Holly' books

"Given my institutional knowledge of the University of Maryland Medical System, its board and all the people on it, I do not believe there was any criminal activity," Ashworth said in an interview Monday. "I do not believe there was profound negligence."

Beginning tomorrow, Nygren, an outside firm, will begin a review of board policies and procedures around awarding contracts and potential business relationships between the medical system and companies with ties to board members. Already three board members have resigned and four others have taken voluntary leaves of absence. The CEO and President of UMMS also took a leave of absence as the situation is evaluated by an outside auditor.

Pugh originally defended the deal, though she has since apologized for doing something "to upset the people, the people of Baltimore," Pugh said Thursday.

"We need to work through this, that's why we've got this consultant coming on board, that's why we're addressing the issues the way we are addressing them," Ashworth said.

Governor Larry Hogan was taken aback by the book buying controversy, calling on leaders of UMMS to meet with Hogan, State Senate President Thomas V. Mike Miller, and Maryland House Speaker Michael Busch to discuss the potential conflicts at hand. The State Assembly is considering legislation to prevent the potential issues the scandal has brought to light and to hold responsible parties accountable.

READ MORE: Mayor Pugh apologizes over book deal controversy

"Obviously we are working with the governor's office, the speaker, the Senate, the president of the senate, as this bill goes through, to address the issues there in, but as with the conclusion of the session, whatever that bill is, that's basically what we will be focused on" in the coming months, said Ashworth. He said the system has a culture that when an issue comes to light, it is addressed, and corrections are made to improve going forward.

Ashworth said UMMS has grown significantly in his time there, now employing 28,000 employees through 10 hospitals stretched across the state. He said the current controversy deals with just the board and business operations of the medical system and does not affect patient care.

"I think all of the things that we're talking about here, we've got to go through this review process and come out the other side and talk about the facts," Ashworth said. "....We can, with optimism, know that when we address these issues, we’re going to come out a better organization.”