“We have identified basic oversight lapses here. This is a population that is not able to do its own oversight, and if you’re not doing it—who’s doing it?” Sen. Morgan Carroll, D-Aurora, asked officials from the Department of Human Services who were testifying before the Legislative Audit Committee.
Foster care falls under the purview of the Colorado Department of Human Services, but the program is administered by individual counties. The counties contract with privately owned child-placement agencies that hand over checks to foster parents.
An audit performed by the state’s auditor found that the department has not heeded the recommendations of the previous two years’ audits calling for more oversight over the child-placement agencies.
The department, funded through the state’s operating budget as well as by fees and federal dollars, is a recipient of federal money under the American Recovery and Reinvestment Act of 2009. In order to receive those funds, the federal government requires that audits reflect how the money is spent.
An audit in 2008 showed numerous instances where expenses charged to the program by foster-care providers may have been excessive or not allowed, and red flags were raised. However, the department said the federal requirement for audits does not apply to the vendors receiving the federal money. The department made a formal decision in 2008, and still maintains, that child-placement agencies are vendors and therefore are not subject to the added scrutiny of an audit.
The department’s stance, despite the state auditor’s assessment that the vendors should be subject to further scrutiny, troubled Carroll.
“Let me just be candid—I find that disturbing,” said Carroll. “We’re talking about some really high-profile problems with the division of child welfare. We’re talking about the past experience of being overcharged and having unallowable expenses in a system that desperately needs money to go to direct care for children.”
Carroll said she wants to make sure that the oversights are put in place regardless of how the child-placement agencies are defined by the department.
Yet, Jenise May, a deputy executive director of the department, defended her department’s reluctance to exclude the agencies from the auditing requirements.
“When you end up in that arena, you end up having to track a dollar down to the provider level,” said May. “It really limits our ability to serve the child.” May said, for example, a child may not be able to receive a birthday present under the federal guidelines if even child-placement agencies must be audited.
Sen. Lois Tochtrop, D-Thornton, reiterated the concerns of her colleagues.
“This (child-placement agencies’) administrative cost is pass-through money. The county gives it to the (agency), the (agency) passes it through to the foster parents,” said Tochtrop. “That’s where the concern is: that pass-through that there’s no oversight on. “
Sen. Dave Schultheis, R-Colorado Springs, said he hopes that the department will find a way to create the oversight that appears to be lacking.
“I do hope that future audits appear better than they appear here. It gives the impression that you (the department) don’t care about it,” said Schultheis. “It looks like we’re at logger heads and you’re going to do what you want to do.”
Tochtrop said perhaps it is time to look at the overall structure of human services and to reconsider decentralization put in place just over a decade ago.
“We need to sit down and look at how well decentralization has worked,” said Tochtrop. “When you pick up the paper, last Sunday, and you see the things that go on because of things that fall through the cracks—maybe we need to look at this.”