Communities struggle to spend opioid settlement funds

Alisha Ladyga was 16 when she first tried and became addicted to OxyContin in the early 2000s, years before the opioid crisis swept the nation. During the peak of the epidemic in her hometown of Huntington, Indiana, she said nearly everyone she knew was using drugs.

“People were overdosing left and right,” Ladyga said. “Most of the people that I had grew up with have either passed away from opiates during that time, from overdose, or they’re in prison.”

Ladyga, 39, has been in recovery for 11 years. She began the process at 26, when she was given a 25-year prison sentence with 18 years to serve behind bars.

Hoosiers like Ladyga are still feeling the effects of the opioid epidemic. When the crisis reached its peak across the state in 2012, there were nearly 112 opioid prescriptions per 100 people, according to the Indiana Attorney General’s Office. Since 1999, more than 15,000 Hoosiers have died from opioid-related causes.

In the aftermath of the opioid epidemic’s peak, Indiana communities are receiving money from national settlements from the manufacturers and distributors of prescription opioids. But a lack of oversight and guidance from the state has left towns, cities and counties struggling to spend the money in ways that work to prevent substance use disorder.

An investigation by the Arnolt Center for Investigative Journalism, the Indiana Capital Chronicle and WTHR found that in many instances, communities spent portions of the settlement money counter to state-issued guidelines informed by the parameters set by the settlement agreements.

Some communities used restricted abatement funds on unrelated expenses:

• Pike County spent $61,114 on bodycams and equipment.
• Hancock County spent $45,250 on vape sensor installation.
• Yorktown spent over $20,000 of restricted settlement funds on police car radios.
• Hobart spent $14,966 on seven AEDs and five pairs of electrodes.
• Alexandria spent $1,260 for box meals and food during the 2024 solar eclipse and $12,025 on rifle suppressors.
• Delphi spent $778 on 20 parking ticket books and tow away signs.

In line with guidelines laid out by national settlements, Indiana drafted several core strategies for how settlement funds should be spent by state and local governments. Our investigation found that over $300,000 of funds have been used counter to those guidelines.

With little oversight at the state level, municipalities are often left alone to determine how to spend settlement money.

Many communities were unaware of the spending guidelines or received them too late. Additionally, there are no consequences for communities that don’t use settlement funds on the treatment, education or prevention of substance use disorder.

“I think every community has to decide for themselves the best (way to spend funds),” Doug Huntsinger, executive director of the Indiana Criminal Justice Institute, said. “Our community providers are at the table to understand what resources are in their community, what gaps they have between resources, and how these dollars can then be used to fill those funding gaps.”

Communities lack guidance, communication on settlement fund uses

Indiana secured $1 billion from settlements reached in July 2021 with the manufacturers, distributors, and dispensers responsible for the opioid crisis, set to be distributed over 18 years.

Funds were divided into two categories: unrestricted and restricted.

Municipalities should spend restricted funds on abatement programs that emphasize treatment, prevention, education and care in relation to substance use disorder or mental health issues, per Indiana code. Unrestricted funds are not outlined as clearly, leaving communities to spend funds as they see fit.

Following national settlements, Johns Hopkins University released recommendations for state and local governments to inform spending of litigation funds, including:

• Spend the money to save lives
• Use evidence to guide spending
• Invest in youth prevention
• Focus on racial equity
• Develop a fair and transparent process for deciding where to spend the funding

Guidelines lay out how not to spend restricted settlement funds, also known as abatement funds. Those uses include but are not limited to:

• Activities that are not evidence-based or promising practices for opioid abatement
• Law enforcement equipment such as vests, guns, body cameras, radios, Tasers, vehicles, uniforms, and more
• Developing infrastructure or investing in equipment or capital projects not directly related to prevention, treatment, harm reduction, or recovery services
• Promotional materials, including items with logo embroidery or screen printing

Flora Police Chief James Bishop said documents provided by the Attorney General’s Office indicated unrestricted funds could be used for anything, so his agency used the money for a copier and radios for police officers. He said he’s had trouble coordinating with the state to find a productive way to use restricted funds.

“The (Attorney General’s Office) wouldn’t give me any advice at all on it,” Bishop said. “They just referred me back to their documents that were posted online.”

Bishop said Flora is not large enough to possess resources that would benefit opioid users. Instead, those funds would have to be donated to the larger surrounding community.

“But the question is, do we donate, with council approval, some of these restricted funds toward the programs that they’re offering? But what’s the benefit to the town of Flora? What are we going to get versus the rest of the county?” Bishop said.

Bishop said Flora’s restricted funds are difficult to use in a community with few resources.

“Our problem and concern is that the restricted fund is growing and we have no idea what to do with it,” Bishop said.

Calls unanswered as communities seek guidance on spending

Indiana Attorney General Todd Rokita contends that his office maintains a close relationship with local municipalities. However, some communities say his office has not done enough to assist with the implementation of settlement funds.

“We already work closely with local governments to distribute funds and educate officials on proper use,” Rokita said in a statement.

The Attorney General’s Office in 2024 distributed guidelines detailing how to use restricted and unrestricted funds. But some communities say the document was too vague.

“It’s not the best guidance material. So we’ve had to … ask other communities, you know, what does the state mean by this? What’s the interpretation?” said Daleville Clerk-Treasurer Amy Roberts.

Sen. J.D. Ford, D-Indianapolis, said some communities are receiving small amounts of the settlement money, making it harder to find proper uses. Ford said he encourages these communities to find creative ways to use the funds, such as $20 gas gift cards that could be used to help Hoosiers afford travel to treatment or therapy.

Henry County has used its funds to create what local health department administrator Angela Cox, who retired in December, calls a better infrastructure. Instead of sending individuals out of the county for resources, Cox wanted to establish services for substance use disorder locally.

“When we were looking at our needs assessment for the county, substance use disorder just kept coming to the surface as a priority problem,” Cox said. “We have for quite some time had discussions through our courts, through our office, through the hospital, just trying to figure out where to start. And one of the things we realized is that we really didn’t have that good foundation.”

Henry County’s settlement money has gone toward creating a crisis intervention team, improvements to men’s and women’s shelters, law enforcement and first responder crisis intervention training, a mobile crisis team, a jail recovery assistance program, opioid-blocking medication treatment services, STD testing, and the creation of a community health position.

Cox says there is no excuse for smaller communities not to find ways to address substance use disorder with their settlement money.

“It isn’t too tight for those communities to do. Even the smallest communities could hire, for example, at their local health department, a social worker that would be focused on this particular population and get them to inpatient places,” Cox said.

Huntington Mayor Richard Strick said it is important to use the funds to address the root causes of substance abuse.

“The reality is, the bureaucracy of local government and the faithful execution of the law can be hard, but it’s important … it’s very important in those communities that they get right with the law, and they work through it with the attorney general and with others to make sure that they don’t end up costing their community more in the long run and adding to the pain they’re suffering,” Strick said.

Some communities say that they have been unable to communicate with the Attorney General’s Office and have used unrestricted funds where they see fit.

Pike County reports purchasing body cameras using unrestricted settlement funds because, according to county Auditor Judy Gumbel, the state has given few recommendations on how settlement funds could be used.

“I called the State Board of Accounts, I called the attorney general. I called anybody they recommended to see whether or not we could use the money for the body cam. That wasn’t clear to me at the time, and no one could give me an answer,” she said. “So I’m gonna say I haven’t gotten any help at all from the state.”

Any misspending of opioid settlement funds could possibly put the entire settlement at risk, said Huntsinger, head of the state’s Criminal Justice Institute. Settlements like Purdue Pharma stipulate that any misspent dollars by the state or local units can be clawed back by the defendant Sackler Family, the family that owned Purdue Pharma.

“So, everyone’s spending could have an impact,” Huntsinger said.

While there is no official oversight committee, Huntsinger said the Indiana Criminal Justice Institute, alongside the Family and Social Services Administration, the Association of Indiana Counties, and the Indiana Attorney General’s Office, have been working to provide support to communities.

ICJI is responsible for putting together reports on how counties are spending their settlement dollars and will reach out if they find evidence of questionable purchases.

However, Rokita maintains that the Attorney General’s Office has no state authority regarding the opioid settlements and cannot take any enforcement actions.

Yorktown Town Manager Chase Burton said he was never contacted after the state flagged some of the city’s settlement spending.

“I just really hope that we’re smart about this money. I hope it’s not a slush fund,” Ford said.

Sen. Ryan Mishler, R-Mishawaka, leads the Senate Appropriations Committee and said he is very comfortable with state spending of the money based on reports the Legislature has received. But he has less information on local spending and was surprised by the concerns.

“I guess it all comes back to us. I guess we would just have to put in statute what happens if you do something wrong,” Mishler said.

One option could be a community losing its money, but he said he would want to consult with the Attorney General’s Office and FSSA to learn more.

“On the local side, I guess we probably didn’t look at that as something we should oversee,” Mishler said. “ Maybe we should … we can’t babysit everybody.”

Communities that have found ways to use settlement funds

Some communities, like Elkhart County, have found ways to use settlement money to benefit their already preexisting substance use disorder programs.

Suzanne Weirick, an Elkhart County commissioner, said $500,000 of its settlement funds went to Oaklawn, the primary community mental health center for Elkhart and St. Joseph counties. With that money, Oaklawn built a crisis center where individuals can find walk-in treatment care. This means that patients can access addiction care faster than going through the emergency department of a hospital.

“We needed more immediate intervention with individuals, so the crisis center was a no-brainer, especially because it allowed us to provide additional access for medication-assisted treatment,” Weirick said.

In Spencer County, leaders created a task force to find uses for the settlement money. That group is made up of “front-line” workers who witness and work with those struggling with addictions daily, a commissioner, a county council member, the sheriff, a school superintendent, and an ambulance worker.

Spencer County put a portion of its funds toward a trauma response program at the area’s school systems. Settlement money has also gone to The Way of Rockport, a Christian organization dedicated to overcoming addiction through counseling.

Boonville has distributed funds to local organizations based on an application process. One of the approved applications came from Jean Carter, a mother who founded Hope for Warrick County after her son died from an overdose. Now, her foundation works to install Narcan overdose reversal spray in schools and public places and raise awareness through billboards and promotional flyers.

The town has also invested in women’s shelters for women recovering from opioid addiction and several smaller organizations that aim to reduce harm related to substance use.

“You probably can’t go down the road and talk to any individual that hasn’t somehow been affected by drugs and opioids one way or the other, whether it be family members or co-workers,” Boonville Clerk-Treasurer Tammy Boruff said.

In Starke County, opioid use has been “rampant” for the last several years, Shawn Mattraw, director of court services, said.

Starke has formed a small committee and one program created is for those on probation, community corrections, and pretrial monitoring.

“This is our third year successfully getting that funded,” Mattraw said. “Last year they (Indiana) terminated all funding for any pre-trial probation programs, the state did not give us advance notice, and we run a pretty healthy pre-trial program here in Starke County.”

Starke County was able to pay for the continuation of this program with the use of their opioid settlement funds for the year of 2026, but they do not know what the future of this program will look like without state funding.

“Additional funding options, if we could get more funding avenues for additional treatment services, that would be great,” Mattraw said.

Communities leverage funds to meet local needs

When Ladyga was released from prison, she stayed at Place of Grace, a housing option for recovering addicts transitioning from prison to civilian life. When the settlement funds were distributed to Huntington County, she was able to give back to an organization that changed her and other community members’ lives.

Ladyga sat on the county’s committee that oversaw settlement fund spending when it was first assembled and worked alongside physicians, law enforcement agents, community members familiar with the county’s mental health services and those in active recovery. Together, they helped decide the most effective use of settlement funds.

Strick, Huntington’s mayor, said these funds are ultimately meant to reverse the pain and damage caused by the opioid epidemic.

“For me, it was a conviction that these settlement funds came because of the pain our community suffered, and so the funds need to go towards alleviating that pain,” Strick said.

In addition to programs, Huntington deposits a portion of the settlement funds into a dedicated account that will support initiatives in perpetuity, Strick said.

Huntington County has used the experiences of those most affected by the opioid epidemic to inform how settlement funds should be delegated.

“We are the ones who have been through it,” Ladyga said. “We know where the funds should go.”

Communities like Huntington have found practical ways to spend settlement funds, giving back to people hurt by the opioid epidemic. But others are still left without the resources or support to make a noticeable impact.

“Let’s not mess this up. We have an opportunity here. Let’s do this right from the very beginning,” said Huntington County Health Officer Matt Pflieger.

This story was written by journalists at the Arnolt Center for Investigative Journalism at Indiana University in partnership with the Indiana Capital Chronicle and WTHR. Brookelyn Lambright, Megan Garnai, Madelyn Hanes, Avery Lowry, Edie Schwarb, Lauren Stickelmaier and Alayna Wilkening are students with the Arnolt Center.