Oregon Department of Human Services’ internal review validates concerns about the care of vulnerable children

Nine months after it was revealed the state of Oregon was paying millions of dollars to an unlicensed, religious nonprofit to watch some of the state’s most vulnerable children, an internal review by the Oregon Department of Human Services validated concerns from those outside of the agency that there was a lack of oversight and children’s safety and well-being could not be assured.

The internal audit is noteworthy in how rudimentary the recommendations are. The report suggests ODHS officials run background checks on providers before they are placed in homes to watch over vulnerable children. The audit also states more fiscal oversight over such contracts is needed, highlighting one instance where a provider overcharged the state by more than $88,000.

In November, OPB first reported Oregon child welfare officials signed a contract with a Keizer-based nonprofit, Dynamic Life, paying them up to $2,916 per day, for every child or teenager placed in their care. It was a shocking amount, especially compared to the $795 per month the state pays a foster parent.

After OPB wrote about the state’s arrangement in November, the state canceled the contract with Dynamic Life and the arrangement was the subject of legislative hearings.

The recent audit, released at the end of June, found that the invoicing for the contracts was often muddled. In one instance, Dynamic Life overbilled the state by $19,236. In another, they overcharged by $88,200. The state paid millions of dollars to Dynamic Life in a short period of time. And they weren’t the only organization the state was partnering with to help kids at risk of being placed in hotels. Another one of the providers, LC Beach House, which has ties to Dynamic Life, overbilled by $4,032 and charged the state $45,000 for services that did not appear to be included in any contract, according to the internal audit.

Here is one of the audit’s big takeaways: “Without sufficient oversight of contracts there is no assurance providers can meet the needs of the children in care and ensure their safety,” it states. “In addition to potential harm to children, the agency may continue to suffer reputational harm if these conditions are not corrected. There are also legal and financial risks associated with the lack of oversight for the children in the care of contracted providers.”

Sen. Sara Gelser Blouin, D-Corvallis, who held legislative hearings on the matter, said the audit confirmed what many outside of the agency, including her, had been saying for months, but didn’t answer any of the big questions about accountability or how the misspent money would be recouped.

“So much missing money,” Gelser Blouin said in an interview on Thursday. “Where is the big outrage we had over designated bottles of Pappy van Winkle?” she added, citing the scandal at the Oregon Liquor and Cannabis Commission with hard-to-buy liquor.

“The lack of energy around this is incredibly concerning.”

Long-term care struggles

Oregon’s struggling child welfare system has been under the spotlight for years. The state recently settled a class-action lawsuit that aimed to improve its trouble-ridden foster care system days before a high-profile trial was set to begin. More recently, its senior services program has been garnering headlines.

After a woman wandered away from a long-term care facility and died of hypothermia, nobody from the ODHS licensing team immediately visited the facility. Finally, after 28 days, they went to inspect the now-shuttered Sandy facility in light of Ki Soon Hyun’s death. When they did, a litany of concerns prompted them to immediately close the facility. They moved 13 of the remaining residents to other facilities ill-equipped to care for them late on a dark, rainy night.

The woman’s death and the state’s poor treatment of the remaining vulnerable residents highlighted systemic failures in how the state cares for vulnerable adults. The governor’s office has called for an independent audit into what led to her death.

But the governor is trusting that the state’s Department of Human Services will both identify a third-party entity to do the work and pay for it, essentially making them the auditor’s client.

State Rep. David Gomberg, D-Otis, who sits on the governor’s commission on senior services, said he’s in favor of an independent audit, but has several questions.

“Who is doing the audit? What’s the oversight? How are we assured it’s going to be independent? I can’t answer those but I can ask the questions,” he said.

Those are particularly important questions given ODHS leadership has historically pushed back when confronted with problems. After the state ombudsman released a report highlighting that the state missed numerous red flags leading to Hyun’s death, ODHS head Fariborz Pakseresht returned a three-page leader noting they didn’t “agree with many of the report’s statements or its representation of the agency’s options.” And after reports of Dynamic Life became public, the head of the state’s Child Welfare program, Aprille Flint-Gerner, told lawmakers the story was factually incorrect, according to multiple sources. When OPB reached out to the state to see if anything needed to be corrected, a Human Services spokesman answered no.

In an email, the governor’s spokeswoman said she trusts that the agency can identify an appropriate entity to offer an independent review. Gov. Tina Kotek said the agency should be “continuously identifying ways to improve the services they provide” and that she has confidence in the agency’s leadership.