Kansas agency serving 3,100 foster children accused of ‘rampant’ financial mismanagement

By: - December 4, 2020 7:40 am
The Kansas Department of Revenue said state tax collections of $704 million in October exceeded expectations by 11% or $73 million. It was the 27th consecutive month state tax revenue surpassed the forecast. (Getty Images)

The Kansas Department of Revenue said state tax collections of $704 million in October exceeded expectations by 11% or $73 million. It was the 27th consecutive month state tax revenue surpassed the forecast. (Getty Images)

TOPEKA — Top management at Saint Francis Ministries purchased $80,000 worth of Chicago Cubs tickets and agreed to pay $7 million to the president’s business partner for software development as the organization tumbled into financial chaos, sometimes relying on loans to cover weekly expenses, according to a whistleblower’s report.

The chief executive and operating officers of the state’s largest foster care provider managed to shield its board of directors from learning about the allegations for nearly a year while the Kansas Department for Children and Families hired a private firm to audit Saint Francis finances.

Last month, Saint Francis without explanation severed ties with the Rev. Robert Smith and COO Tom Blythe after learning about the whistleblower report, which was delivered to DCF in November 2019.

In more recent allegations made to DCF, two sources accused Saint Francis of logging visits by social workers with children when the visits never occurred. Those allegations led to the dismissal of a Saint Francis employee accused of making false reports.

“Those are very astounding allegations — allegations that absolutely take your breath away,” said state Sen. Molly Baumgardner, a Republican from Louisburg and member of the foster care oversight panel.

Kansas Reflector obtained the whistleblower report and other documents through open records requests with DCF. Saint Francis did not dispute the allegations outlined by the whistleblower when pressed for comment.

“We appreciate the courage it took for the whistleblower to come forward and bring questionable actions to light,” said William Clark, who is serving as interim CEO for Saint Francis. “Ultimately, this will make us a stronger and better organization, which is always our goal.”

Saint Francis relies on DCF grants to serve 3,100 children in foster care and more than 600 foster care homes. The organization has headquarters in Salina and with 1,600 employees provides services in more than half of Kansas counties, as well as five other states.

Signed by “a concerned citizen and taxpayer,” the whistleblower report is dated Nov. 22, 2019. The author chose to remain anonymous for fear of losing his or her job.

The report says Saint Francis throughout 2019 had to determine which bills to pay and which ones to put off because of cash shortages. The organization relied on a line of credit from a bank, as well as a loan from a private individual, to make weekly payments.

Meanwhile, the report says, “lack of control over spending is rampant.” One example, the author said, is the purchase of $80,000 worth of Chicago Cubs tickets. Fortunately, $65,000 in playoff tickets was refunded because the Cubs weren’t good enough to make the playoffs.

“How can Saint Francis justify spending any money on professional sports tickets, let alone a total of $80,000, when they can’t pay all their weekly obligations?” the whistleblower wrote.

Saint Francis maintains it has always had leadership in the finance department, but the whistleblower said the organization has operated without a financial controller or chief financial officer since 2018.

The report says a software failure at Saint Francis wiped out five months of financial data last year, as well as all historical medical billing data. The entire finance department worked without financial systems for at least a month.

The organization outsourced IT work to Bill Whymark, who the whistleblower identifies as a partner of Smith, the Saint Francis president and CEO. The whistleblower said Saint Francis owed $7 million to WMK Research for software development between December of 2018 and November of 2019, even though no software was finished and ready for use.

Additionally, the report says, Saint Francis paid for the election expenses of Smith’s wife as she sought national office with a church.

DCF responded to the allegations by hiring BT and Co., a Topeka accounting firm, in January to audit Saint Francis for financial stability and determine whether the organization was capable of meeting its financial obligations to provide foster care services in Kansas.

In October, the firm delivered an incomplete report to DCF, saying Saint Francis had refused to cooperate with the investigation. DCF sent a letter to Saint Francis demanding the organization turn over requested documents.

That action led to the Saint Francis board’s discovery of the whistleblower complaint. The board immediately suspended Smith and Blythe. Two weeks ago, following its own investigation, Saint Francis told employees that Smith and Blythe would not return. Smith had led the organization for six years, and Blythe had been there for five years.

Kansas Reflector also learned that DCF in November of this year received a phone call and email from individuals who alleged Saint Francis staff was falsifying records.

The caller was a former employee who said she had been fired in June for raising concerns within the organization. She said a Saint Francis worker had falsified logs about visiting with families when he was really at home drinking. She also said managers added inaccurate information to case notes and bullied staff to go along with the fake reports.

The individual who emailed DCF alleged Saint Francis workers falsified records that include documenting multiple visits that didn’t occur and lying about the status of children.

“Saint Francis leaders became aware of allegations that a worker falsified documentation and immediately began an internal record review and interviewed the worker,” said Morgan Rothenberger, the spokeswoman for Saint Francis. “That individual no longer works here. In partnership with the Department for Children and Families, we have instituted new processes to ensure such a situation does not reoccur. We are making monthly phones calls to families that we serve to verify that workers have been making visits to their homes.”

Baumgardner said the Kansas Attorney General should look into the allegations and potentially take action on behalf of the state.

“If child data and visitation in the foster home with the children and so forth, if that’s being falsified, then immediate action needs to be taken to make sure that these kids really are receiving the care and support that they need and deserve,” Baumgardner said. “It does seem to me that this is just kind of hiding in the shadows.”

Mike Deines, spokesman for DCF, said the agency has outlined steps that Saint Francis needs to take to ensure that reports are accurate. The inquiry into financial problems is ongoing.

“Saint Francis continues to demonstrate positive outcomes for the children and families they work alongside,” Deines said. “DCF will continue its due diligence and provide support to Saint Francis to ensure their operational structure continues to support their important work.”

Rep. Jarrod Ousley, a Democrat from Merriam who sits on the foster care oversight committee, said Saint Francis needs to be transparent about its financial troubles.

“I don’t see how that doesn’t affect kids,” Ousley said. “That’s what I would ultimately be really curious of — how did all this mismanagement happen and you guys were still able to perform your job and look after kids in state custody?”

Rep. Susan Concannon, a Beloit Republican and chairwoman of the Special Committee on Foster Care Oversight, wondered why she was learning about the allegations from a journalist.

“I don’t think that should happen,” Concannon said. “You know, I chair a special committee on foster care. So I don’t know who should tell me, but I think I should know about it.”

Concannon said she defended Saint Francis earlier this year following revelations that DCF under previous administrations had shortchanged foster care providers by millions of dollars.

“I was a little bit defensive of them in that because if we weren’t paying our bills, then we put them in a really bad position, but it sounds like they put themselves in a bad situation,” Concannon said. “It’s kind of hard to feel sorry for them.”

Kansas Appleseed settled a lawsuit with DCF in July over the instability of the foster care system and negative outcomes for children within it. The settlement, pending approval by a judge in January, will give DCF more oversight of vendors like Saint Francis and allow a neutral party to review documentation, said Teresa Woody, an attorney for Kansas Appleseed.

“It’s indicative of an issue that’s one of the reasons that we sued, which was this lack of oversight of these vendors who are actually providing the foster care services,” Woody said. “That was a big concern for us, and that’s part of the settlement.”

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Sherman Smith
Sherman Smith

Sherman Smith is the editor in chief of Kansas Reflector. He writes about things that powerful people don't want you to know. A two-time Kansas Press Association journalist of the year, his award-winning reporting includes stories about education, technology, foster care, voting, COVID-19, sex abuse, and access to reproductive health care. Before founding Kansas Reflector in 2020, he spent 16 years at the Topeka Capital-Journal. He graduated from Emporia State University in 2004, back when the school still valued English and journalism. He was raised in the country at the end of a dead end road in Lyon County.