DURAND DENIES WRONGDOING; ALLEGATIONS OF ILLEGAL TRANSFERS INVESTIGATED.

Byline: David Greenberg Daily News Staff Writer

The chief of the county's Health Care Agency denied on Friday that he has used money earmarked for the mental health department to fund Ventura County Medical Center.

During an interview, agency Director Pierre Durand refuted allegations by State Sen. Cathie Wright, R-Simi Valley, that he has misappropriated taxpayer money - charges that sparked two investigations and deepened concerns about the county health care system.

``Mental health needs the money for mental health,'' Durand said. ``We have not had an occasion to do that (transfer money). I don't have that type of free discretion. The auditor's office processes all the paperwork. The (chief administrative officer) approves all transfers.''

The comments come as the Board of Supervisors are expected Tuesday to discuss a midyear budget review, which shows the county hospital faces a projected $1.2 million shortfall. It also shows the mental health department with a $3.2 million shortfall after the first half of the fiscal year.

The report going before the Board of Supervisors arrives as the agency is in the midst of scrutiny over last year's failed merger of mental health and social services.

Durand said the Ventura County Medical Center's shortfall will be absorbed through expected state funding. As for the problems at the mental health department, he said he was ready to work with the county chief administrative officer to devise a strategy for eliminating any possible deficit.

Auditor Thomas Mahon is expected on Monday to release a financial review of a portion of the mental health department's deficit that covers a $1.5 million shortfall.

Behavioral Health Department officials, whose department includes the mental health department, told Durand in January that it had amassed a projected $1.5 million deficit during the first four months of the fiscal year while Behavioral Health was merged with the Human Services Agency.

The remainder of the debt comes from a projected revenue shortfall within the $40.1 million spending plan for this fiscal year, officials said.

The hospital's budget this fiscal year was set at $118 million to include a projected increase in the number of ``hospital days'' in which uninsured patients will be cared for this year.

The figure, normally at 22 percent, is expected to reach 30 percent of approximately 40,000 overall care days.

Durand said state ``disproportionate share'' funds, which cover such increases in uninsured patients, will be allotted to the county by the end of the fiscal year on June 30.

``I'm anticipating revenues that will bring us to a balanced position by the end of the fiscal year,'' he said. ``The hospital is in a very strong financial position.''

County records show the hospital has more than $9 million in ``retained earnings,'' or the accumulation of years of year-end surpluses and fixed assets.

Wright recently accused Durand of inappropriately transferring funds from the beleaguered mental health department and persuaded the state Department of Mental Health to conduct its own audit, which should be complete in six weeks.

Durand would not comment on the investigation.