Allegations that a private ambulance company mishandled money in its contract with the city of San Diego turned out to be unfounded, the City Attorney's Office announced today.
A city audit released in April 2011 alleged that Rural/Metro of San Diego engaged in questionable financial transactions that may have cost the city as much as $11 million. The audit stemmed from a whistleblower lawsuit filed by an ex-employee.
Company officials denied the allegations from the beginning and put up a $7.5 million bond, pending the outcome of an independent examination of the firm's financial records.
City Attorney Jan Goldsmith said the independent investigation found no evidence that Rural/Metro, which has provided paramedic services in San Diego for about 15 years, withheld money from the city. The six-month investigation was overseen by retired Judge Leo Papas.
He said Rural/Metro agreed to reimburse the city $1.5 million to cover expenses, while the city will pay $100,000 to Robert Heffner, the man who filed the lawsuit.
"There were serious allegations that could have easily resulted in expensive and lengthy litigation,'' City Attorney Jan Goldsmith said.
"Instead, we took Rural/Metro up on its offer to show that the funds were not misappropriated through an independent process funded by Rural/Metro,'' he said. "And, they did exactly what they said they would do.
The city did not previously have that information, but the independently validated facts show that there was a sound explanation for how the funds in question were applied."
The audit prompted city officials to re-work their contract with Rural/Metro, which serves around 440 communities around the country, including several within San Diego County.
