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Tapestry’s grant nixed before it was ‘relinquished’

NORTHAMPTON — In June, officials at Tapestry Health Inc. said they had “voluntarily relinquished” a $714,000 federal grant for providing family planning services to low-income residents. But documents obtained by the Gazette show that the nonprofit agency was pressured to give up the grant after it failed to comply with the rules governing the cash.

Tapestry officials told the newspaper that they had informed the U.S. Department of Health and Human Services in June that they were relinquishing the grant, which funds family planning clinics across western Massachusetts.

In a statement at the time, the agency wrote that it was doing so in collaboration with the Massachusetts Department of Public Health, which subsequently assumed administrative control of the grant that runs through March 31, 2015. The Title X grant, as it is known, funds Tapestry’s family planning services and preventive health care to low-income and uninsured individuals in the region.

“With the organization in a period of financial and administrative restructuring, which includes a major leadership transition, the board felt that it better serves the interest of our programs in the short term to have DPH administer the funds for us,” the agency wrote to the Gazette in late June.

But Tapestry failed to mention a key fact: the federal government had already begun the process of yanking the grant.

In a May 27, 2014, letter from a federal grants director to Sudhakar Vamathevan, Tapestry’s former chief financial officer, the federal agency informed Tapestry that it had made a final decision to terminate its Title X family planning grant because of the organization’s failure to comply with its terms and conditions.

The Gazette obtained the correspondence through a federal Freedom of Information Act request. The federal agency redacted information detailing the specific reason the grant was terminated, citing a FOIA exemption that permits the withholding of commercial or financial information that was obtained from a person outside the government and that is privileged or confidential.

According to the Office of the Assistant Secretary for Health, grant termination proceedings were underway when, prior to the conclusion of that process, Tapestry chose to voluntarily relinquish its Title X grant.

“Our acceptance of the relinquishment is technically still a termination of that grant,” said Diana M. Gianelli, spokeswoman with the U.S. Department of Health and Human Services.

Asked for specifics about the reasons the federal agency was pulling the grant, the spokeswoman directed a reporter to Tapestry for answers.

According to the U.S. Department of Health and Human Services’ grants policy, that agency may terminate a grant if a recipient does not take appropriate action during a period of suspension or may terminate a grant if a deficiency is “so serious as to warrant immediate termination or if public health or welfare concerns require immediate action.”

Tapestry had 30 days to appeal the federal agency’s decision, but chose to relinquish its grant instead.

Cheryl Zoll, Tapestry’s interim chief executive officer, said this week that the Department of Public Health’s administration of the grant has not affected Tapestry’s services, which remained in place and continue to be funded by the federal money that is now under state control.

“They’ve been working with us to make the transition as easy as possible,” Zoll said. “You could barely notice there is a difference.”

Zoll was hired in late June and after Tapestry’s Title X grant transition. She became the third chief executive officer of the agency since January when Tapestry’s founder and CEO, Leslie Tarr Laurie, resigned. A mass resignation of Tapestry’s board of directors soon followed amid disagreements over how to move the agency forward financially.

The Gazette earlier this year reported on the agency’s financial debts and ongoing attempts to get out of the red. It was not clear why Laurie resigned.

Asked whether she was aware that the federal government was terminating Tapestry’s annual Title X grant before she was hired, Zoll deferred comment to board members who had been handling the situation at the time.

“We have a very good relationship with DPH and Title X,” Zoll said.

Multiple attempts to reach Satu Zoller, Tapestry’s board president, by phone and email were unsuccessful this week. Janice M. Albano, the agency’s board treasurer, declined to comment on the matter and directed questions to Zoller.

Tapestry runs eight health centers and needle exchange and nutrition programs, as well as breast and cervical cancer screenings, sexual health exams, counseling, outreach education and insurance enrollment programs. The agency operates on an approximately $6 million budget and employs 120 people.

Department of Public Health officials said in June that they have been aware of Tapestry’s financial difficulties, including maxed out credit lines and agency debt, for some time and were working closely with the agency to address the problems. The state agency said it planned to use Tapestry’s Title X funding to expand its existing family planning contract with Tapestry in order to maintain its services in western Massachusetts until a new federal grant cycle next spring.

Tapestry is one of about a half dozen organizations which receive Title X grants in Massachusetts, supporting 75 health centers across the state.

In 2012, the money helped serve 65,881 residents in Massachusetts, including 57,052 women, according to the National Family Planning & Reproductive Health Association. Sixty percent of these patients had incomes at or below 100 percent of the federal poverty level.

In an announcement about the shift of Tapestry’s grant to Department of Public Health, federal officials said there was a “critical need” for the Title X-funded services to continue “in a particularly vulnerable part of the state.”

“The State of Massachusetts Department of Public Health’s experience in administering a federal grant, familiarity with the requirements of the Title X program and the ability to provide services quickly and with minimal interruption identified it as the optimal candidate to provide these services under the current constraints,” Susan B. Moskosky, acting director of the Office of Population Affairs wrote in a July 10 federal notice.

Dan Crowley can be reached at dcrowley@gazettenet.com.

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