State Backs Away From Takeover of Child Needs : Social services: Officials say county agency that oversees abused and neglected youngsters has shown improved performance under new leadership.

State authorities are backing away from their threat to take over the troubled Los Angeles County Department of Children’s Services, saying the department--under the leadership of a new interim manager--is making significant strides toward meeting their demands for improved performance.

“I think the likelihood of us taking over the county department is probably slim at this point, with the assumption that the county continues to move the way it is moving,” said Loren Suter, deputy director of the state Department of Social Services, in an interview Thursday.

Suter’s remarks--coupled with a recent letter in which Linda McMahon, director of the state agency, praised the efforts of interim manager Elwood Lui--were cause for cautious celebration among county officials and child advocates who oppose a state takeover of Los Angeles County’s $457-million child welfare services system.

“It’s a ray of hope in what has been a difficult time,” said Helen Kleinberg, president of the county Commission for Children’s Services. “I’m pleased to see that the state believes that the county is moving forward.”

Said Kathryn Barger, an aide to county Supervisor Michael Antonovich: “We’re on the right track. Now we just have to follow through and, so to speak, close the deal.”

State officials have been complaining for years that the county has failed to protect the 50,000 abused and neglected children it serves. Already, county officials have given up their authority to license foster homes; that move came in the wake of allegations that the Department of Children’s Services had failed to shut down homes where foster children were being physically and sexually abused.

Then, in June, the Legislature ordered the Department of Social Services to take over all children’s services programs in Los Angeles County if local officials did not provide a detailed plan for complying with a wide range of state regulations.

A final decision on the takeover is expected after the county submits its plan in October.

The dispute with the state, along with repeated complaints from childrens’ advocates, prompted the resignation of Robert L. Chaffee, the former director of the Children’s Services Department. Chaffee was replaced three weeks ago by Lui, who will serve for three or four months until a permanent successor can be found.

Since he took office, Lui said, he and his top managers have met with state officials and put together a team to respond to the state’s demands. In a “notice of noncompliance,” issued Aug. 1, McMahon outlined a series of deficiencies that the county must correct.

Already, the county and the state have agreed upon nine critical problems identified in that letter. Among them:

* Children’s Services workers do not always respond immediately when they receive a report that a child is in danger of abuse by parents or guardians.

* The department often fails to notify the Juvenile Court within 48 hours after removing a child from a home so that a judge can determine if the removal was justified.

* Social workers do not help arrange visits between children and their natural parents, visits that are necessary to help reunify families.

While the 15-member county team is examining those problems, Lui is also negotiating with a consulting firm, Deloitte & Touche, to conduct a management audit of the Department of Children’s Services. Lui said the contract is not yet final.

Lui has also reorganized the top management of the department, bringing in people on a temporary basis from elsewhere in county government and promoting from within the department in the wake of this week’s resignation of Catherine Tracy, Chaffee’s former chief deputy.

In her letter to Lui, McMahon said she was encouraged by his willingness to work with her staff.

“You appear to be viewing this as an opportunity to take the action necessary to ensure the protection of children,” she wrote. “ . . . The steps you have already taken have the potential to form the foundation of an excellent plan of action.”