Fraud Discovered in Foster Care Company Prompts Audit

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February 27, 2013

“Foster parents are special saints,” the Eau Claire woman told me. “They take troubled children and help them have a loving family.”

These foster families often rely on child placement agencies for the money needed to care for special needs children. At least one foster parent wondered if everything was on the “up and up” when her foster placement agency in Middleton received $1,000 a month for ‘administrative services’ while she received $800 a month to actually care for the troubled child.

Joni Weaver is a former foster parent of a child with serious mental health problems. She worked with Community Care Resources, the Middleton child placement agency accused of fraudulently billing the state for over $6 million in services.

“They finally got caught – that was my first thought,” Ms. Weaver told a Wisconsin State Journal reporter. “They got their checks and that was all they cared about. They made us feel like human piggy banks.”

Community Care Resources made headlines when the Department of Children and Families (DCF) released results of a 14 month audit which revealed the agency billed the state for inflated salaries, personal expenses, vacations to Alaska and Hawaii, landscaping and the maintenance of fancy cars and boats.

Lawmakers and people across the state were justifiably outraged. Nothing angers us more than the fraudulent use of scarce public funds. My colleagues and I took swift action by approving an investigation by the Legislative Audit Bureau.

During the recent Joint Committee on Audit hearing, DCF Secretary Eloise Anderson and her staff testified about the process used to uncover the fraud. I asked her how such alleged fraud could happen and what should be done to prevent it.

From the testimony and other research I began to understand our broken system and how auditors uncovered the alleged fraud during their newly-routine audits of child placement agencies.

In 2009, the legislature made major changes in the payment and oversight of child welfare agencies. Stung by out-of-control costs and poor record keeping, a new law was enacted to give the state authority to set rates for child welfare agencies and to audit the books of these agencies.

I supported this law and the long overdue changes.

About 6,400 Wisconsin children are placed out of their home. Most of these children live in foster care homes and about 800 live in group homes or residential care centers. Almost 90% of the DCF budget goes to individuals, for-profit and non-profit agencies involved with child placement.

Wisconsin’s child welfare system is county-operated and state-supervised. Responsibility at the county is shared between the juvenile court and the human services department. Community Care Resources is one of 24 child placement agencies that contracted mostly with the counties.

Under the 2009 law, the state established rates through a two-year phased-in oversight and monitoring process. This process assured statewide consistency and transparency. It also gave the state authority to audit the books of agencies.

In 2011 DCF requested additional staff to help conduct timely audits of child placement agencies. New auditor positions were authorized. A Fiscal Review Program was developed and the use of a risk assessment tool determined who got the first audits. The staff audits two to six organizations a month and expects to cover all child placement agencies in the next three to five years.

I shared my appreciation for the auditors’ work with DCF administrators. The Middleton child placement agency was not the only organization accused of fraudulent activity by the department. But with 120 children and over $6 million in questionable expenses, it certainly appears to be the most troubling.

Secretary Anderson assured the committee fraudulent activity had nothing to do with the care provided by foster parents. She thanked the parents for providing critical care for Wisconsin’s troubled children.

The uncovered fraud tells me the system of oversight and monitoring is now working. No one likes to hear about fraud but if we are going to root it out and eliminate it, we must bring it into the light. That is exactly what the DCF auditors accomplished and they deserve our thanks!

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