Financial scandal intensifies interest in independent oversight for Kansas foster care

Lawmakers also on hook for resources to meet obligations of Kansas Appleseed settlement

By: - January 10, 2021 9:30 am

An investigation by a Kansas City, Kansas, attorney substantiated claims of financial misconduct by Saint Francis Ministries CEO Robert Smith, leading to his departure from the organization in November. (Sherman Smith/Kansas Reflector)

TOPEKA — Revelations of financial mismanagement at Saint Francis Ministries and the state’s handling of a whistleblower complaint could become the catalyst for installing an office of the child advocate.

The CEO of Saint Francis, the state’s largest foster care provider, resigned in November after an investigation revealed he hid financial losses from the board of directors, funneled $11 million to a business partner for faulty software, purchased $65,000 worth of Chicago Cubs tickets, and used the organization’s credit cards for personal expenses.

Some of those concerns were raised a year earlier in an anonymous letter sent by a Saint Francis employee to the Kansas Department for Children and Families. The agency responded by hiring a Topeka accounting firm to audit Saint Francis finances but didn’t alert the nonprofit’s board or lawmakers to the allegations.

Even before the scandal became public, lawmakers frustrated with years of turmoil in the foster care system had warmed up to the idea of installing an independent investigator to handle complaints and report back to the Legislature. Kansas Appleseed lobbied for an office of the child advocate a year ago, before the pandemic halted legislative action in March.

Mike Fonkert, campaign director for Kansas Appleseed, said he would challenge anyone to come up with a more effective oversight tool.

“Policymakers and advocates have really narrowed in on this office of the child advocate as the tool that, when established in an independent way, is something that can make a really robust, in-depth, big difference in our system,” Fonkert said. “You can see the system we have now, and it desperately needs more oversight.”

Kansas Appleseed also reached a settlement agreement with Gov. Laura Kelly’s administration in July for a lawsuit over instability within the foster care system. The Legislature now faces the responsibility of providing resources in a cash-strapped budget to ensure mental health, education and other foster care needs are met.

“The most important role the Legislature can play is to continue its emphasis on, oversight of and support for child welfare services,” said Mike Deines, spokesman for DCF. “Continuing to place public policy focus on child welfare is an important element in ensuring accountability across systems and will be critical to making progress the settlement agreement calls out.”

Deines said DCF plans to introduce several pieces of legislation this year, including proposals to waive work requirements for food assistance for children in foster care and to clarify that the agency doesn’t have to release information about the death of a foster child until criminal charges have been filed.

The agency also wants to create a pilot program that would pay the cost of driver’s education, licensure and motor vehicle insurance for children in state custody.

Office of child advocate

Sen. Richard Hilderbrand, a Republican from Galena, said establishing the office of the child advocate will be one of his top priorities as chairman of the Public Health and Welfare Committee.

“The challenge we will have,” he said, “is that we have to take great care in making sure that it isn’t just more fluff legislation and that it is crafted correctly and does what it is actually intended to do.”

Republicans would prefer to place the autonomous child advocate within the Kansas Attorney General’s office, and give it the authority to investigate concerns raised by foster parents, kinship parents, social workers and others who work within the foster care system. One proposal for appointing the child advocate calls for the governor and Supreme Court to make a recommendation that would require confirmation from the Legislature. The position would come with a six-year term and up to 10 staff members.

Morgan Rothenberger, spokeswoman for Saint Francis, said the organization values the concept of an ombudsman with increased accountability and transparency.

Morgan Rothenberger, spokeswoman for Saint Francis Ministries, said the organization would welcome an independent advocate who could identify ways to improve the foster care system in Kansas. (Sherman Smith/Kansas Reflector)

“We welcome the opportunity to work with an advocate who would offer an independent look at challenging cases and, most importantly, work toward systems improvements that would impact all of the children and families in care,” she said.

The governor hasn’t embraced the idea of adding independent oversight of her administration. She said the office of the child advocate wouldn’t have prevented the financial misconduct at Saint Francis, which she blamed on poor oversight by the Saint Francis board.

“That child advocate office would do nothing to change the dynamics between the CEO, the CFO and the board,” Kelly said. “I think that’s an internal issue for St. Francis, and certainly DCF is on it, with investigations and whatever else.”

Kelly also said when DCF reviews “what went wrong,” the agency will realize it should have gone to the board members with the whistleblower report.

Fonkert said the child advocate would provide a place “for every perspective to be heard.”

“The whistleblower went to DCF with a totally valid complaint, and we don’t hear about it for a year. Well, why was that?” he said. “If we can truly have an independent oversight mechanism, that is just there to protect kids, and make sure that things are done the right way, we’re going to get to the bottom of a lot of these situations”

Sen. Pat Pettey, D-Kansas City, said children and parents who face crisis in the foster care system often feel like they get stonewalled when they voice concerns to DCF.

“There’s only one place to go,” she said. “Now, I’m not sure that this would totally change that for them. But at least this would be thought of as more of an independent lens to look at those issues.”

Jenny Kutz, spokeswoman for KVC Health Systems, said the office of the child advocate would duplicate checks and balances already established by federal and state regulations. Employees of the foster care provider are child advocates, too, she said.

“We can understand why there is interest in an additional level of oversight since there have been challenges within Kansas child welfare over the last decade,” Kutz said. “We are equally concerned about those challenges and want to be part of rectifying problems and strengthening the system.”

Appleseed settlement

Under the settlement agreement between the state and Kansas Appleseed, foster children no longer can be housed in offices, night-to-night placements must end, housing facilities cannot exceed capacity, and kids in state custody must get the mental health treatment they need.

Kansas Appleseed filed the lawsuit in 2018, before Kelly took office, after a surge in the number of foster kids overwhelmed the system. The settlement addresses some of the problems that have long plagued the system, such as lowering the rate in which children are moved from one home to another.

“The Appleseed lawsuit only confirms what we already knew,” Hilderbrand said. “Our foster care system has been failing for a long time. It is way past time for us to start making some meaningful progress to help the kids that are in our custody.”

A federal judge will retain oversight of the case to ensure compliance.

Teresa Woody, litigation director for Kansas Appleseed, said the settlement was designed to give the state flexibility in how to achieve proper outcomes for children.

“I think you’ll find that, yes, it’s going to take some additional resources to have programs that keep kids in school, those kinds of things,” Woody said. “There may need to be an investment in foster care training.”

Betty Rush, a licensed master social worker and regional vice president for Saint Francis, said the organization is already working with DCF to improve services.

“We know that children and teenagers have a better chance of success if they are able to remain in a stable, homelike environment, preferably with family members but also with foster or adoptive parents,” Rush said. “It’s also critical that needed support services are accessible.”

Kutz, the KVC spokeswoman, said the lawsuit was a result of the surge in the number of kids in foster care, combined with “a debilitating lack of funding.”

Legislation passed under former Gov. Sam Brownback denied poor families access to food assistance and other support measures, which contributed to a 43% increase in the number of children in the foster care system.

In 2016, the state slashed Medicaid reimbursement rates and cut funding for community health centers. And for several years under Brownback and Gov. Jeff Colyer, DCF secretly withheld millions in payments to Saint Francis and KVC.

The Legislature could help strengthen child welfare, Kutz said, by expanding coverage to KanCare, as Medicaid is known in Kansas, and by increasing rates paid to mental health and substance use treatment providers.

“There is a lack of timely, high-quality, consistent mental health services for kids in foster care,” Kutz said. “This is due in large part to the insufficient rates paid through KanCare to community mental health centers, private practice providers, and in-home providers. Children need to be able to access the right providers in their local areas with the right openings.”

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Sherman Smith
Sherman Smith

Sherman Smith is the Kansas Press Association’s journalist of the year. He has written award-winning news stories about the instability of the Kansas foster care system, misconduct by government officials, sexual abuse, technology, education, and the Legislature. He previously spent 16 years at the Topeka Capital-Journal. A lifelong Kansan, he graduated from Emporia State University in 2004 as a Shepherd Scholar with a degree in English.