LEWISTON – Former employees of the defunct Richardson Hollow Mental Health Services of Lewiston were not paid as they expected Tuesday, and the reason is in dispute.

John Turner of Auburn, business consultant for owner Linda Hertell, said it’s simple: The Department of Health and Human Services cut off all funding to the 10-year-old company, which abruptly shut its doors Sept. 17 after months of financial problems.

DHHS Commissioner Brenda Harvey said the state owes Richardson Hollow nothing and vice versa so if there’s no money to pay workers, “I don’t believe that’s the state’s problem.”

She said at one time, the company owed the state nearly $1 million.

Hertell, of Auburn, refused to discuss the pay issue Tuesday night.

“I’m not willing to speak to you,” she said when reached on her cell phone.

In late August, she blamed her company’s money troubles on low reimbursements from the state’s MaineCare program, which paid Richardson Hollow for services it provides to state clients.

Turner’s view differs wildly from the commissioner’s.

“There’s still issues about getting paid by the DHS,” he said Tuesday night. “It’s difficult at best to find out what DHS owes Richardson Hollow. They shut off all money to the company, and (Richardson Hollow was) not able to make payroll.”

“They’re really not being cooperative at all,” he said of department officials.

Asked how much Richardson Hollow is owed by the department, Turner said, “It’s anybody’s guess what that number is.”

The payroll for the approximately 125 employees – that’s the estimated number at the time the company folded – amounts to $85,000 or $90,000, he said.

“Employees can get upset, but maybe they are getting upset at the wrong people,” Turner said. “The employees should be looking to DHS for their pay. They hold the purse strings.”

Turner said the problem stems from DHHS’ installation of a new $11 million computer system in 2001, which resulted in estimated payments being made to service providers. When it was discovered that some providers had been overpaid, they were told to return the money over time.

“The money is being paid back,” Turner said Tuesday. However, at some point, “DHS said they were going to hold 100 percent of (Richardson Hollow’s) income,” he said, leaving employees without their earnings.

Commissioner Harvey said the books have been balanced and neither owes the other anything.

“It is true in 2005 when the computer system was turned on the claims were not able to be paid” so the state made interim payments to agencies, overpaying some, including Richardson Hollow, she said.

“Richardson Hollow said they couldn’t make their overpayments, and that it had claims that the state didn’t process.

“We did six months minimally with them, and in the end they owed us a lot of money. It was close to $1 million,” Harvey said.

“We began this work many months ago. We continued to make interim payments to Richardson Hollow,” she said.

“Because Richardson Hollow had poor financial management and accounting,” she said, they were counting claim twice for payment. “So when they said to us, ‘You owe us this amount of money,’ in the end they owed us money.”

Harvey said the department continued to work with the company and “We continued to issue them interim payments.

“We ultimately asked them for an internal audit to reconcile their claims with our data. They partially did that. That information suggested to us that they still owed us money and they were still having financial problems,” she said.

The interim payments continued, Harvey said.

“Ultimately, as they were getting more and more fragile financially, we decided we could no longer continue to give them cash in advance on their claims because I couldn’t put the state in the position of having this liability unpaid.

“All of this financial back and forth took place over eight or nine months,” she said.

“By (Hertell’s) admission,” Harvey said, “she did not have the kind of chief financial officer she needed. She admitted she needed to hire someone to manager their books.”

When the last request was made by Richardson Hollow to advance a payment so it could make payroll, the state said “no,” according to the commissioner

“I think it’s an unfair accusation that this is related to the state’s computer problems. I also know how hard our staff worked to keep this organization afloat,” Harvey said.

It was a mystery to her, she said, that employees were still owed money because Sept. 17, the day Sweetser of Saco negotiated the takeover of Richardson Hollow’s contracts, was payday, and Sweetser provided money for that purpose.