GREENSBORO, N.C. — The state's Division of Health Services Regulation completed a Statement of Deficiencies report on a Greensboro substance abuse agency - finding several violations to licensing rules and the exploitation of the agency's clients. 

The state is revoking the license for Ready 4 Change, Inc., ordering the suspension of new clients to the agency, and charging the agency a $6,000 penalty - after finding facility violations that "endanger the health, safety, and welfare of clients."

The 45-page report details the specific violations, evidenced by observations and interviews. One line on page 24 of the report states, "Interviews…with audited current and former clients...revealed...the THC (Transitional Housing Coordinator) solicited the clients from jails, homeless shelters and various other places to receive substance abuse services and in turn the clients would be provided housing in substandard apartments."

In the report, clients explain that passing a drug test could be grounds for removal from the program, and that they were fined for missing a substance abuse treatment class. Others explain they were forced to go to substance abuse treatment - even if they didn't have a substance abuse problem. 

One interview quote on page 33 of the report reads, "They said if we attended classes (substance abuse treatment), we could live here (transitional housing) free because we had Medicaid."

The report also quotes a former staff member as saying, "The people didn't want to be there (substance abuse treatment) ...they were there for housing," and "They (the clients) caught word if you got clean, you would lose your housing."

Here are the full findings, as summarized on the last page of the report:

"This facility was licensed to provide three services: Substance Abuse Intensive Outpatient Program, Substance Abuse Comprehensive Outpatient Treatment and Psychosocial Rehabilitation. 

"Current and former clients audited had diagnoses of Hepatitis C, illicit substance use (Marijuana, Cocaine, Methamphetamine, Opiates), alcohol use, and mental health diagnoses. 

"The CCO (Corporate Compliance Officer) of the substance abuse treatment facility was also the Director of a Division transitional housing program. The clients were provided transitional housing services contingent on their substance abuse treatment. If they had 3 unexcused absences from the substance abuse program, they were charged a case management fee depending on the amount of income they received or were kicked out of their apartment and the substance abuse program. 

"All fees were paid to the THC (Transitional Housing Coordinator) and then were given to the substance abuse program. Although treatment needs were identified for clients, treatment and groups often centered around the substandard housing. 

"The Licensee was aware of the transitional housing but maintained that it was separate from the treatment program. Client and staff interviews however, supported that she had knowledge of the housing being contingent upon attending treatment. 

"This deficiency constitutes a Type A1 rule violation for serious exploitation. An administrative penalty of $6,000.00 is imposed."

WFMY News 2 reached out to Ready 4 Change, Inc. directly for comment. Here's the agency's statement: 

"Ready 4 Change disagrees with DHSR's findings, and we are appealing the penalties." 

"We take these accusations of penalties very seriously, but they are only that – accusations. We have the right to be heard in Court to dispute the findings."

Check back for updates to this developing story.