Agency’s Delay Kept Funds From Foster Caregivers

Foster parents and relatives who care for more than 8,000 abused and neglected children did not get checks due them in June, apparently in an effort by the Los Angeles County child welfare agency to improve its financial standing.

County auditors are investigating whether the Department of Children and Family Services improperly tried to improve its balance at the end of the fiscal year June 30 on the backs of thousands of foster parents and children.

Checks averaging $500 were withheld for as much as three weeks before they were released to adults who care for about one in every six of the county’s foster children. Although a few foster parents complained in interviews about the delay, it is unclear whether any suffered anything more than an inconvenience.

Officials in the county auditor controller’s office said they are investigating to determine why the payments were delayed, although they said it appears the goal was to help plug an unexpected $15-million deficit.

“It was inappropriate to stop paying the foster parents, and it was inappropriate to book payments in this fiscal year that were supposed to be made in the last,” said Tyler McCauley, deputy director of the auditor’s office. The office has since ordered the agency to make a correction--logging the late payments into the fiscal year that ended July 30, eliminating any budgetary advantage that might have been gained.

“I thought it was very unfair to me as a foster parent, the lack of sensitivity on the part of L.A. County,” said one foster mother, who asked not to be identified. “And when I complained, I was bounced around. No one took this matter and handled it.”

County child welfare Director Peter Digre insisted that the payments were withheld because a computer software problem was causing overpayments that could not be recovered.

“We held it for a few days just because we didn’t want to send out a bunch of incorrect payments,” said Digre. “It wasn’t that much. Frankly, I didn’t get one call on that.”

Digre’s budget chief, in contrast, said that while she had hoped for a bookkeeping gain in delaying the payment, that computer problems triggered the delay.

The postponement did not affect the main payroll of $38 million that caretakers use to house, feed and clothe 50,000 Los Angeles County foster children. Those checks were issued to foster parents June 15, as they are on the 15th of each month.

Instead, the children’s agency put a hold on “supplemental” foster care payments, totaling $4.6 million. The children’s agency issues those checks when, for instance, a child is deemed to be entitled to a higher rate of compensation because of a medical or behavioral disability. Supplemental payment checks are also written to compensate foster parents who have brought more children into their homes.

From June 8 through June 30, the children’s agency stopped forwarding paperwork for all supplemental payments. The payments resumed July 1, the first day of the new fiscal year.

The maneuver came as the agency’s financial standing grew steadily bleaker. After initially projecting that the county’s share of assistance payments for 1997-98 would be $18 million, the children’s department in June estimated that it would spend $22 million. But by the time the books were closed, the county’s share of payments had grown to $32 million.

Marilyn Brown, budget director for the children’s department, insisted that withholding payments for foster children was primarily related to a software change made in the statewide computer system that Los Angeles uses to issue its checks.

The change, in April, led to “major, major errors in the payment rates. . . . If we made overpayments, we had no authority to collect them later.”

Brown acknowledged that she hoped the payment hiatus might have “some tangential benefit in closing the books”--a fact that she said she reported to Digre before stopping the checks. She added: “People who say this was the one and only strategy for balancing the budget are just not right. That’s not true.”

But the state official who oversees operation of the computer--known as Child Welfare System-Case Management System--said the only payment problems reported to her came in April, after a software alteration.

Cris Jensen said Los Angeles officials told her office that the June payment delays had “nothing to do” with the computer. Since all complaints about the system come to her office, Jensen said it would be unusual for Los Angeles not to report that a glitch had caused it to hold thousands of checks.

In addition, a Los Angeles County official familiar with the situation said the payments were ordered stopped until the start of the new fiscal year. If the delay had been truly computer-caused, it seems unlikely that the children’s agency could have predicted that the problems would be resolved July 1.

The law permits counties to hold supplemental payments until their next regular payroll, but several county officials said the money has been delivered expeditiously in the past in acknowledgment of the immediate needs of foster families.

June’s delays are likely to disturb the county Board of Supervisors, which has been closely scrutinizing Digre’s performance and auditing the children’s department.

“It’s off the reservation and beyond the pale to just hold up payments to people,” said a deputy to one of the supervisors.

In any event, the children’s department payroll action would not have solved its budget headaches; it reduced county expenditures by just $1.5 million. That saving would not nearly have closed the department’s $15.1-million deficit. (Most of the unpaid foster care money came from the federal government, not the county treasury.)

As it turned out, the booming economy did more for the department. With a $230-million surplus in the county’s overall budget, the supervisors agreed this week that they will absorb the children’s agency’s shortfall.

And the computer system that helps prepare foster care checks remains racked with “horrendous” problems, Brown said. Just in the last week, 35,000 transactions disappeared from the system and have not been retrieved, she said.