Official ‘Pushes Envelope,’ Lands County Funds, Critics

The woman in the conservative red suit, parked at the large adding machine behind the spotless desk in the unremarkable corner office, might not look like a high-stakes gambler. But Marilyn Brown has won big and lost even bigger in the last decade.

Most of her bankrollers do not know her name, and wouldn’t really understand the arcane financial game she plays. But when Brown hits the jackpot or goes bust, her backers--the residents of Los Angeles County--feel the results.

Now the obscure bureaucrat is back in the county’s child welfare agency, where she began 32 years ago as a social worker. She is spinning the wheel again--this time by claiming federal money that has been crucial in helping the county feed, clothe and house 50,000 foster children, nearly one in 15 children in protective custody in America.

Brown, 53, is a revenue enhancement specialist, a government employee who plumbs federal regulations to find ways to pay for local programs. She once held the job for all of Los Angeles County government and now does the same for the Department of Children and Family Services.

Her maneuvering helped save the county’s 19 juvenile probation camps and funded a heralded program for reunifying troubled families. But it also was critical in creating a gaping hole that once threatened to close hospitals and, perhaps even bankrupt the county.

Now many critics within Brown’s own agency--senior managers with years of experience--worry that her latest crusade for federal dollars has pushed the risk too high.

They say Brown has driven her Revenue Enhancement Division to be overzealous and sometimes inaccurate in claiming that a higher and higher percentage of the county’s foster children are poor, in order to qualify them for federal foster care payments.

If true, the allegations are particularly serious because the payments total nearly $350 million, more than one-third of the children’s agency’s budget.

Fear of U.S. Audit

Aware of the accusations and the crucial role of the payments in propping up the overburdened agency, the Los Angeles County auditor controller’s office has launched a review. But the U.S. Department of Health and Human Services, which doles out the money, has not audited Los Angeles’ federal foster care payments since five years before Brown introduced her self-described “pit bull” tactics.

“If there was a [federal] audit tomorrow, a lot of us would be leaving,” said one manager in the agency’s Revenue Enhancement Division, which Brown heads. “Because we wouldn’t want to be here to try to defend what we’ve done.”

But Brown and her supporters say such fears spring from the faint hearts of lifelong, hidebound bureaucrats, loath to work the long hours necessary to secure the financial rights of the county’s neediest children.

County children’s services Director Peter Digre said Brown has simply tapped funds that were available but that others never sought. “This is a huge underdeveloped opportunity. It’s as simple as that,” Digre said.

Few in California much worried about paying to put children in foster homes just six years ago. Until then, the state paid 95% of the cost. But in 1992 the Legislature took away the bulk of the money, leaving counties to make up the difference. Suddenly, it became important to determine how many of the children in foster care were pulled from poor homes. In essence, the federal government would foot twice as much for those children’s foster care bills as it would for others.

The result has been a relentless effort by child welfare officials to make children in their care eligible for the federal money. Brown has driven the task to new heights.

Six hundred eligibility workers who find homes for new foster children also spend much of their time documenting the case for federal funding. The employees scour welfare and unemployment computers and interview parents and relatives.

Brown refuses to let a case drop just because one worker can find no signs of poverty. A supervisor must review each rejected case and, if that fails, a second supervisor (Brown calls them “super sleuths”) usually will send the rejected case back for even more research.

The result? Los Angeles County now claims federal payments for 97% of the children it places in foster care, up 18% from two years ago, Brown said. That is more than any other urban county in the state. Even counties with higher poverty rates, such as Fresno (87%), don’t claim as many federal dollars.

$50 Million in Gains

The effort has produced more than $50 million in additional revenue a year for the Los Angeles children’s agency, some of it passed on to foster families and group homes and about one-third used to hire more county social workers. That money has allowed the county Board of Supervisors to sustain programs for needy children in foster care, even as cases jumped 55% in seven years. And this with little additional financial commitment from the county--a situation that has strengthened the position of controversial child welfare chief Digre with his bosses on the Board of Supervisors.

But half a dozen of Brown’s current and former administrators, all longtime veterans, said in interviews they believe that an untold number of the county’s federal claims have been improperly documented or are outright wrong.

They said that in staff meetings and private conversations Brown has urged them to take extreme measures to make more cases eligible for U.S. funding. They charge that Brown encouraged them to make assumptions that do not comply with federal regulations, including: that abandoned children, by definition, come from poor homes; that parents with off-the-books income, such as gardeners, can be assumed to meet low-income standards; that children, once qualified, can always be returned to the federal rolls.

Brown also launched an 18-month review of more than 6,000 cases that had been passed over for federal funding.

The critics said they were hounded and browbeaten by Brown if they failed to increase the number of children who drew federal payments. Said another former manager: “If too many cases were coded non-federal you had to answer, big time.”

Brown conceded that her department has “pushed the envelope” in claiming federal dollars, but she said the high number of children living in poverty has justified the increase.

“We are following the federal instructions to the letter of the law,” Brown insisted, on a day when she remained in her steaming office, while nearly everyone else was driven out by a failed air conditioner.

Brown said she sees her work today as an extension of her first job in the county, when she was a 21-year-old social worker who, fresh out of college, was assigned to Nickerson Gardens housing project. “This is not just about money, this is about child safety,” said Brown. “This is about providing the money so children can be maintained properly when they can’t be in their own home.”

Brown joins many experts in wishing that the federal government would simply pay for all abused and neglected children, eliminating the millions of dollars spent to weed out the few children not qualified for federal aid. “Let’s stop this game. It’s too time consuming and expensive,” she said.

High, Lows in Career

Although she has labored in obscurity, Brown is well-schooled in the highs and lows of bolstering local finances.

She became a hero to the county Probation Department in the early 1990s by uncovering federal Social Security Act funds that were used to help keep open 19 juvenile probation camps with about 2,200 delinquents.

Brown invoked a section of the act that provides money to care for poor families in disasters and other emergencies. The lightly regulated program had been used in 40 states but no one, until Brown, suggested using the money to care for juvenile delinquents.

“Very often, it isn’t what you were doing, but what you called it,” Brown said in a 1994 interview. “We no longer have juvenile halls and [juvenile probation] camps in California. We have assessment centers and treatment facilities.”

Brown invoked the same section to claim more money for the children’s department, funds that were used to operate family preservation programs.

“She was really the single point of leadership in the state,” helping other counties claim the payments, as well, Digre said.

But Brown’s axiom of “ask and you may receive” has also failed, and spectacularly. A little more than a year after she won the probation money, the U.S. Department of Health and Human Services rejected more than $600 million in Medicaid claims by the county--claims that Brown had spearheaded.

The federal agency denied Los Angeles’ contention that it was entitled to more money because of the disproportionate share of poor people who go to its clinics and hospitals. The U.S. agency also said the county had overreached by trying to use Medicaid funds for administrative costs and social work, which it deemed not directly related to medical care.

The resulting gap in the budget for the Department of Health Services threatened to close one or more hospitals and drag the entire county into bankruptcy. Only a preelection bailout by the Clinton administration saved the day.

Brown maintained a low profile during the painful debacle. Although she was not publicly criticized at the time, she said in an interview that then-county Chief Administrative Officer Sally Reed asked her to find another job.

“I became persona non grata within 30 minutes” of the county learning it would not get the federal funds, Brown said last week, in her first comments about the episode.

She said she had made it abundantly clear to Reed and others that obtaining the Medicaid funds was risky, but that they chose to proceed. Recalls Brown: “The only thing that was made very clear to me was: Do anything you can do to get the money.”

Reed, in contrast, recalled that Brown was giving the Board of Supervisors staff “very optimistic accounts about how much money would be coming. . . . That was part of the problem.”

Within the county administration, disagreement remains about how much blame Brown should bear for the Medicaid chasm. One health department official said Brown unnecessarily drove “expectations to a very high level.”

Risks Involved

But another official who followed the situation closely said the Board of Supervisors turned a blind eye to the risks, rather than face cutting politically popular programs. “It’s the old sausage-making phenomenon,” the staffer said. “Just serve us a tasty breakfast; don’t tell us where you got the ingredients.”

Brown said she was devastated by the loss of the funds, although she still believes the claims were legitimate.

“When the money didn’t materialize, somebody had to take the hit for it. And the person who took the hit was me,” she said.

Child services chief Digre said he had no qualms about welcoming Brown back to her old department in 1995 after the Medicaid bust. Eight months ago he even promoted her, making her the children’s department’s budget chief.

Brown’s Medicaid claims may have fallen short of hopes, Digre said: “But she still got a lot. My impression was she had a very legitimate interpretation and the feds just put the screws on it, a bit.”

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Foster Care Funds

Los Angeles gets the U.S. government to help bear the cost of foster care more than any other urban county in California, including those with higher levels of poverty. Some critics say the rate of foster children L.A. claims to have below poverty level, compared to other counties below, might not survive an audit.

Los Angeles: 97%

Santa Clara: 87%

San Diego: 81%

Ventura: 78%

Orange: 77%

Alameda: 77%

San Francisco: 67%

Rest of Calif.: *79%

*The rate for federal foster care reimbursements in 57 counties, excluding Los Angeles.

Source: State Department of Social Services and Los Angeles County Department of Children and Family Services.