Thursday, October 10, 2002

Audit questions tacked-on fees

Foster care agency paid its parent

By Liz Sidoti
The Associated Press

COLUMBUS — One of Ohio's largest foster care agencies misspent nearly $5.4 million in taxpayer money meant to be used to care for children, according to a state audit released Wednesday that was strongly challenged by the agency.

The finding against Specialized Alternatives for Families and Youth of Ohio (SAFY) is the largest amount of questioned costs of the 24 such organizations reviewed so far.

“The inflated figure of "questioned costs' presents a grossly unfair and misleading impression of SAFY operations, staff and services,” Ben Brooks, president of the organization's board of directors, said in a statement. “Children have always come first with SAFY of Ohio throughout its 19 years of operation.”

According to the audit, which covered 1997 through 1999, most of the questioned spending was in prohibited payments to the agency's parent company, SAFY of America.

“In many ways, SAFY of Ohio is paying large administrative dollars to SAFY of America, and essentially developing resources for SAFY of America to grow a for-profit entity,” Auditor Jim Petro said.

The audit found that SAFY of America charged a $12-per-day fee for each youth in foster care. SAFY of America could not provide documentation of how the fees, paid with public dollars, supported the foster care program, according to the audit. Those fees added up to nearly $3.2 million.

The parent company, which is based in Delphos, Ohio, was not the subject of the audit.

“This is not intended to be a for-profit business. This is supposed to be a mission-driven organization. The mission is to care for children, not build an empire,” Mr. Petro said. “That's what SAFY is doing, and I disagree with their view.”

The audit was referred to the state and federal human services departments, which could try to recover the money from SAFY of Ohio.

The Ohio Department of Job and Family Services asked Mr. Petro in 1999 to audit the state's child welfare system after reviews of some agencies revealed misspending.

Counties contract with such agencies to recruit, screen and train individuals to be foster parents and provide temporary emergency care for foster children. Agencies receive federal subsidies for each child, and part of the money then is given to foster parents for the child's care.

In the 23 previous reviews, auditors said they found more than $4 million in misspending. Before SAFY of Ohio's audit, the largest finding was $1.2 million against V. Beacon Inc. in Cleveland.

Only one agency audit is pending.

SAFY of Ohio has nine regional offices in the state, and has placed children in homes in 62 of Ohio's 88 counties. SAFY operations also exist in several other states, including Indiana, Texas, South Carolina, Nevada, Oklahoma, Kentucky, Florida, Alabama and Missouri.

SAFY had said that a substantial finding was likely because of the agency's size and the way the state auditor's office is interpreting federal spending requirements.

The audit questioned expenses at SAFY of Ohio that ranged from the nearly $3.2 million in management fees to $2,300 for personal items from floral shops, restaurants, department stores and malls.

The audit also said that SAFY of Ohio hired The Children's Home of Delaware to manage some of its services, and used for management purposes $1.1 million that was meant to help children.

Mr. Brooks said the agency has changed significantly since the audit period and has a new board of directors and chief executive officer. The agency already has adopted or will adopt many of the audit's recommendations.

Mr. Brooks said his organization cooperated with Mr. Petro's office throughout the review, but Mr. Petro noted that subpoenas were issued because auditors had difficulty getting information from SAFY of Ohio.

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