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The Business Of Child Abuse: The Good, The Bad, The Corruption

Archive for February 5th, 2010

The Business Of Child Abuse: There are People out There Turning Abused Children into Gold

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There are people out there turning Abused Children into Gold.

Los Angeles is home to several dozen foster family agencies that are under contract by the Department of Children and Family services (DCFS). These ‘Non Profit’ agencies care for abused and neglected children the department cannot find a home for within their own group of contracted foster parents. In theory, these foster family agencies provide a greater cornucopia of services to the foster children that include more frequent visitation and oversight and greater case management. An agency Social Worker will generally visit homes about once per week in conjunction with the County social worker who visits about once per month. And within this system, people are getting rich.

For almost 2 decades I have worked as a foster care social worker for several different foster family agencies.  Several of these agencies were investigated by Los Angeles County officials for financial malfeasance and child safety issues involving improper oversight of foster homes and foster parents, falsification of documents, misappropriation of funds and the generic “questionable costs”. Some of these agencies have since been shut down and some continue to be under investigation.   A friend currently works for an agency that was in the process of paying back to the county several hundred thousand dollars that was misappropriated (stolen?) by a previous controller when another investigation and audit began. This is not unusual.

So who would have thought: Owning a foster family agency is a good way to cash in! It previously was not unheard of for the top administrator to be earning a salary of over $330,000, (along with other benefits) as was reported in the news media at the time. These salaries remain highly out of proportion when compared to the salaries of top officials of charitable organizations many times larger. The salaries and benefits of the agency owners are voted on by board members who are often friends and associates hand-picked by the ownership, and frequently have jobs or contracts with the agency.

Oversight is by various state and county bureaucrats who seemingly take no substantial action until the news media becomes involved or enough disgruntled workers or foster parents make real and imagined complaints.  County agencies with a mandate for oversight would seem to have a conflict of interest in exposing malfeasance and incompetence since it highlights their own ineptness in allowing such fiscal corruption to continue unabated for so long.

The bread and butter of these agencies are the abused and neglected children. Unfortunately there is high competition between the agencies for foster parents and abused children. Many agencies steal away foster parents from other agencies with promises of greater remuneration, customer service and “transfer bonuses.” I recently spoke to foster parents affiliated with one particular agency who are annually sent poison pen letters excoriating the leadership, accusing management of outrageous financial impropriety, and makes personal attacks. This is often followed up by a quiet phone call or other contact suggesting an improved alternative for beleaguered and underpaid foster parents to move to.

Foster parents I have spoken to about this don’t know what to think. On the one hand, they suspect much of the letter to be true, and on the other hand they know and like, as well as feel supported by the leadership. They had better. An agency will soon find themselves out of business if they lag on customer satisfaction, especially when considering the amount of cutthroat competition for abused and neglected children. (Did I just write that?) The County maintains various regulations to discourage this, and clever administrators find a way around them. “Cutthroat competition ? ” Customer Satisfaction?” “Personal Attacks?” All this and Abused and Neglected Children! Something is wrong here!

The more beds a foster agency provides the more money the agency earns. Agencies dislike decertifying (kick out) bad or mediocre foster parents since their exit represents not only a loss of bed space (money), but a further loss in the original investment in training and upkeep. Therefore agencies have a financial disincentive in getting rid of foster parents who do little more than provide 3 meals and a bed. I like to call this “custodial care.” (Foster parents who regularly violate child care regulations or are the subject of allegations against children are a different matter as they put the agency at risk). The incentive to keep beds filled can also cause children to be taken out of one home they have formed bonds with and placed into another in order to free up space. For example, a toddler could be transferred to another home to free that room up for two children who therefore bring more revenue to the agency.

Less than half of the tax dollar millions paid to these agencies actually goes to foster parents for the care of abused and neglected children. The rest of the money pays the modest salaries of administrative staff and social workers, legitimate office expenses, rent, and frequently, the exorbitant salaries of the top administrators, as well as questionable salaries for various friends and family who may perform services such as computer upkeep, fund raising, or community outreach with minimal oversight or appropriate audit. This is frankly not much different from any other small business. However, in this case the business is child abuse, and while not big business in terms of a Fortune 500 company, an administrator or owner can indeed feel him or herself part of that elite world when one is earning several hundred thousand dollars per year. Heady stuff and intoxicating, especially to somebody whose only training is in social work and grant writing.

Foster Care Agencies being nonprofit are free to seek donations from the community. There is a lot of “profit,” in “non-profit,” and not much is free! Frankly one would have to be terribly uninformed (or just nuts) to donate straight cash to any of these agencies. Gifts of an individual’s time or expertise, tutoring, lessons, toys, and other tangible gifts that go directly to abused children are the only kind of donations this writer can advocate in good conscience. And, like teachers, a lot of us Agency Social Workers donate directly to the children on our caseload, extra toys on Christmas, art supplies…you name it.

There are many ways owners of a Non-Profit Foster Care Agency add to their salaries. They create extra salaries! One way is to win further county contracts assisting foster children. It works like this: An Agency owner who is already contracted to work full time (to be an administrator or CEO) applies for and obtains a new county contract for services geared for the wellbeing of foster children – so far a good thing. The created programs can take the form of adoptions, mentoring, tutoring, mental health counseling, or some other service designed to help abused and neglected children. When the contract is awarded, an administrator position is immediately created taking money directly from the top for the new administrator’s salary. Any guess as to who that administrator is? The ‘new’ administrator will then hire a secondary person to actually run the program.

The question therefore is why the county of Los Angeles continues to award contracts for new programs and services to individuals who are already contracted to be working full time towards the administration of foster children. A savvy owner of a foster agency can be paid to work full time to run a Foster family agency, a group home for foster teens, a mentoring program and some type of mental health program geared towards foster children, all at the same time, and all for full time salaries. The programs are noble endeavors, but how many full or even part time jobs (funded by tax dollars) should a single individual be allowed to have? The actual work an administrator or CEO does must suffer wouldn’t you think? Evidentely the County auditor did with Hannah’s Children Homes.

Below is a typical if not banal example of the type of stuff that goes on during a single year. In 2007 The Director of Hannah’s was paid $122,000 and the Assistant Director earned $99,500 to work full time for the agency. The assistant director also earned $72,000 to work full time as the director of a group home. The salaries were decided by the board of directorshalf of whom worked for Hannah’s’! (I assume the other half were close associates, friends or family)  Because of this and other unallowable costs and compensation (basically for the 2 top people) Hannah’s had to pay back over $45,000. There was also over $140,000 in over payments that needed to be paid backThis was an audit for a single year. Now, just getting back to the excessive salary thing…What about the other years? What about the excessive salary for the other years? These people must have been doing this for years right? I mean that’s a reasonable assumption… So multiply it lets say, by 5 years,… (5 X $42,000) for example and it’s no longer chump change. So they just get a pass? A Pass! Over two hundred grand!???  And believe me these tireless workers towards the cause of abused and neglected children aren’t alone. And remember, we are just talking about the top two people.  Yet why must I extrapolate this probability,  a probability since I have no way of checking. Why wasn’t there more audits?

A fiscal audit that same year found that United Care foster family agency to had over $270,000 in questionable costs during the 2 years prior. (Problems with credit cards among other things). The list goes on. A 2009 fiscal review for a single year found the director of McKinley Childrens’ center was over paid  by more than $42,000. There was over $7000 in questionable credit card expenses that could not be proven were program related. The agency spent more than $7000 for a retreat and gift baskets for the Board of Directors and their families which management categorized under public relations. Small potatoes perhaps, but this was for one year. So to extrapolate probabilities again, take the years agencies get a pass , multiplied by the dozens of agencies not audited who are doing bad stuff, and we get millions of dollars. Millions of dollars taken from abused children. Tears of gold.

Most Agency Social Workers and other employees that have worked at these places for a while know something fishy happens at their place of business. As “at will” employees, workers have no protection from arbitrary firing. Further, the latest thing is for agencies to have only contract social workers who are paid by the case. (Saves money and gives management greater control) Speak up about anything or even look the wrong way and there goes your job. This is scary stuff for a person making less than a teacher. (The horrors!) Further, contract social workers may be cheaper for the agencies to hire, but they are subject to much less scrutiny and supervision which can lead to all types of problems. We all know this, but that’s another article, let’s get back to management:

When board members are allowed to work at the agency, set their own salaries, and monitor their own job performance and fitness, how can there not be crimes and unethical behavior? Oh, but the county has a safeguard, as only half of the board members are allowed to work at the agency. The state believes the other friends and family members on the board would surely act as a check and balance against any improprieties… Uh huh. Foster care agencies were originally set up by the state to aid counties in treating extremely difficult (called “D” rated) cases necessitating strong mental health treatment. Like many government good intentions, the road has led to the wrong people getting rich. (I’m not quite sure who the right people are).

A few questions for the Los Angeles Board of Supervisors:

  1. Why do owners of some foster care agencies own the land and building (Paid for with Agency funds) of their Agency that the county pays them money to lease from themselves?
  2. When agencies are shut down or sanctioned because of misappropriation of hundreds of thousands of dollars (if not millions), why doesn’t anyone ever seem to go to jail?
  3. How many sexual harassment settlements is an individual allowed to have against him before the county steps in and kicks them out of the business?
  4. When somebody pays back all the money they have misappropriated (stolen) from the Los Angeles County foster care system, why are they allowed to open up shop in another county in California?
  5. Why are board members seemingly never held accountable for neglecting their fiduciary responsibility in allowing corrupt CEO’s (and others) of corrupt foster family agencies to continue doing what they did for years and with ample warnings? CEO’s with salaries in excess of $300,000 that they voted for and signed off on. And…
  6. Why are outside ties between board members and heads of agencies rarely if ever alluded to in the media or in published county investigations? Why does the county do so little to ascertain exactly what these ties between board members and CEO’s are? And…
  7. Several foster family agencies have been shut down because of corruption and or child care issues. Have any of the board members of these agencies been held accountable for anything? (I actually mean held accountable, not simply asked to go on their way). If they are not held accountable, how can we expect them to act ethically and diligently as they migrate towards other non-profit boards serving various charitable interests in California? And finally…
  8. Do any board members rotate in and out of jobs with the very Foster Care Agency they oversee? If yes, (yes) who monitors their productivity, hours spent working and overall competence? Who decides their salaries?

The key here is the care of the children. Agencies know they can keep malfeasance under wraps if they mitigate as much as possible allegations of poor and or abusive care towards the foster children. Something they should do anyway.

In some ways therefore, financial malfeasance acts as a protective measure towards the care of the foster children! Hey I like irony. However, my experience has been that agencies become so accustomed covering up financial corruption that they later have little difficultly in covering up just about anything else. Thankfully, covering up of foster child mistreatment seems to be fairly rare. There are just too many ethical people involved at lower levels and I have found in this case the system usually works. (Who would’ve thunk it?) Indeed if the mistreatment is properly exposed, the guilty parties quickly ousted and paperwork promptly filed the agency will usually receive praise. And the money continues to flow.

Things I wish I had never seen:

Two (2) Cadillac Escalades as company cars.

Over $750,000 (tax dollars) spent on a department within a Foster Care Agency that raised less than a third of that. The owner in a staff meeting later offered workers 10% of any money employees could raise for the agency.

Company credit cards misused for years.

Office trips for educational seminars (on company (taxpayer) dime) around the country and around the world that included first class airplane travel. (We later received a memo telling us that nobody was to travel first class when flying to these seminars). Huh? When we saw the memo we were a bit stunned. Just how much was that trip to a seminar in Africa?

Hundreds of thousands spent on a web based computer system that was less efficient than hand written notes and was immediately trashed by the next administration.

The state once sent an investigator to speak with us (Agency Social Workers) in private when several allegations against an owner finally tipped the balance enough to warrant an investigation.While speaking to us in “private,” the owner sat outside the room timing how long each interview lasted! (The workers who took more than 10 minutes with the investigator didn’t last too long after that.) To my shame my interview took less than 10 minutes.

An owner who had settled close to a dozen lawsuits for sexual harassment is allowed for years to work with and gain financially from abused and neglected children. This guy was so notorious that when another agency wanted to hire him as a consultant the staff revolted. I thought he had finally been booted but a colleague recently saw him at a meeting of administrators. And by the way, does the county pay the enlarged insurance premiums?

Every time an agency is investigated by the state or county, social workers receive calls from other agencies offering jobs if we brought over families and foster children on our caseloads. (As if abused children were advertising accounts, or things to trade.) This happens when agencies are under investigation (and at other times) and is such a common occurrence it is not even considered unethical in many circles. Indeed many agencies began business this way usually under the leadership of a former disgruntled employee who steals a number of cases and foster parents when they leave to start their own.

The owners of an agency fired their administrator when it was learned that she was paying herself to visit and case manage over 20 foster children as a social worker while working full time as an administrator. This is especially egregious when one considers by law she couldn’t do this and further, foster care social workers are permitted to see no more than 15 children. (Actually her secretary did most of the work while she was busy running the agency). But don’t be too concerned, she landed on her feet almost immediately as an administrator at another agency! You see in an act of self-preservation the agency never reported anything to the proper authorities. (A common practice). And hey- you want to work for this administrator? Just bring your cases and families. (Abused Children as income.)

A partner in an agency was booted out after having affairs with two separate employees while being married. (There was a nasty (if not amusing) scene in the front office between two girlfriends)  Now this alone is not under the prevue here; However on his final day he destroyed the agency computer data base. Later he threatened to sue the agency for wrongful termination and they were so intimidated that they caved and paid him a settlement. But don’t worry; he also landed on his feet…a few times since then. (See the above comment a bout self-preservation.)

For years now, one of the elderly founders of an agency putters around the office a few hours a week while being paid a 6 figure salary. But hey, he works a lot from home and he help found the place. We owe it to him.

The county issues clothing checks directly to Foster Care agencies for the foster parent to buy clothes.

One agency seems to be in the habit of not issuing the money to the foster parents unless the foster parents ask for it. Hmmm…

So how do I close? Certainly County Supervisors are aware a lot of these guys are crooks or just a half inch away from breaking the law. And honestly, there has been some cracking down. But NOT ENOUGH. I contend the state could more than pay for the extra auditors and investigators from the many “questionable expenses,” they would root out and prevent. And there needs to be consequences. Paying back a fraction of the money and losing your job isn’t good enough, especially when you just bounce to another non-profit.

I’ve worked at every level at these agencies for a long time. And for too long I’ve felt shame that I kept my head down and mouth shut, the better to hold onto my job because like everyone else I needed it. And I still do. For me the most satisfying part of the job is the children. When I hear their laughter it’s like the voices of angels. And the foster parents – some of the most decent people I have ever met. Man do they get a bad rap, at least most of them.

So I’m not done here. Not by a long shot. Hey, I’m learning where to look. I know who to ask. And a lot of us are fed up. So you wanna steal tens of thousands a year from abused children? You Better Watch out and you better not cry.

Written by joshuaallenonline

February 5, 2010 at 3:09 am

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