Raleigh, N.C. — Earlier this year, we reported a story on the state's ongoing efforts to convert local mental health agencies to managed care providers. Many people, especially families of those with developmental disabilities, are wary of the changes because the switch means agencies will be acting more like insurance companies than public safety net entities.

Cardinal Innovations, a company that had been known as Piedmont Behavioral Health until sometime this year, has been the prototype for the switch. They have created the model that other local mental health agencies have been directed to follow. 

In addition to financial questions, the audit looked at questions those suspicious of Cardinal have raised, such as whether it was appropriate for the agency to build up cash reserves and whether they were complying with open records laws.

In the main, auditors said Cardinal was complying with its mandates and relevant laws. The audit report suggests the state's Department of Health and Human services closely monitor cash flows and financial reporting, but that's not a terribly unusual direction for any agency that handles millions of dollars worth of Medicaid funding.