Audits Find Abuses in Foster Care Finances

Millions of taxpayer dollars meant to recruit and train foster parents in Los Angeles County have instead been spent on country club memberships, trips to Disney World, luxury cars, a new office building and the management of a clothing shop, according to a recent series of county audits.

Taken together, the audits paint a picture of lavish, uncontrolled spending at some of the private agencies hired by the county to oversee foster parents.

At International Foster Family Agency in Carson -- which abruptly closed last month -- the chief executive officer billed the county for her $12,000 membership at the Beverly Hills County Club, a $14,000 lease on a Cadillac Escalade and $293,000 in salary payments over a 15-month period -- about $115,000 more than the average for such executives.

Another foster care agency, El Camino Children and Family Services in Pico Rivera, spent $1.2 million to buy and upgrade a new building six times as big as its previous one and poured $173,000 into rent, furniture and salaries for a retail clothing store “unrelated to providing services to the foster children,” an audit found.

The misspending has touched a nerve in a county government pinched by a budget crunch that has wrung millions of dollars out of health programs, child support and other public services. County supervisors, who generally try to refrain from dabbling in the day-to-day management of county agencies, have jumped into the fray, insisting that new contracts with foster family agencies contain an “absolute right” to review how money is spent.

“We are outraged about this,” said Martha Molina-Aviles, children’s services deputy to Supervisor Gloria Molina. “Normally, the board really shouldn’t get involved in this renegotiation stuff, but this has been going on for years. We’ve had it.”

Last week, the board approved a get-tough motion by Molina and Supervisor Yvonne Brathwaite Burke that spelled out the county’s right to audit foster agencies and collect misspent funds.

Such a policy seems sensible, even obvious, said David Sanders, the new director of the county’s Department of Children and Family Services. But Sanders said he has learned in three months on the job that Los Angeles County has a long history of dubious oversight when it comes to foster care.

“It was one of the areas I was most surprised about. I really expected” that there would be more controls, he said. In his mind, officials should be regularly monitoring the foster care agencies the county hires, flagging spending problems long before they reach the point of auditing.

“It’s not just that money is being misspent,” he said. “I think that harmful things happen to kids as a result of it. We have kids that are being abused in care.”

Sanders cited a study that found 6% of Los Angeles County’s foster children had been abused or neglected while in foster care, a rate more than three times that of New York City.

Last week, a foster mother certified by the Trinity Children and Family Services Agency in Colton was arrested after she allegedly left two children in a sweltering SUV at a child-care center she ran in Lancaster. The boys died from the heat.

In an audit conducted last month, the county found that Trinity had not properly documented $132,000 spent on vehicle maintenance, building improvements and investment fees.

Frances Larose, a Trinity spokeswoman, said her agency disagreed with those findings. She said Trinity complies with state and federal requirements, but that Los Angeles County is trying to enforce its own stricter financial rules.

In some cases, the violations seem unambiguous.

County audits found that El Camino Children and Family Services spent $6,930 in hotel, car rental and other unallowable charges during three separate trips to Disney World in Florida between October 1998 and January 2001.

The agency also had $4,715 in unallowable credit card charges for trips to the Czech Republic, Panama and England during the same period.

While the audits did not link fiscal misbehavior to child abuse, they did catalog more than $3.1 million in questionable spending at three agencies.

Auditor-Controller J. Tyler McCauley said it is unlikely that the county will recoup much money, although it is trying to obtain a share from the El Camino building. El Camino folded after the county rescinded its funding.

In the meantime, county officials are deep in contract negotiations with 68 foster family agencies that have dragged on for almost a year. The existing contracts -- worth about $144 million to oversee foster care for 7,500 children -- expire next month.

The Board of Supervisors has threatened to solicit fresh bids if the agencies do not agree to the county’s terms.

Bruce Saltzer, one of the foster family agency negotiators, said he worries that county officials are so determined to root out fiscal abuse that they will veer too far in the other direction and adopt unreasonably tight rules that wind up driving away good providers.

“Everyone would agree that the county should get the bad guys for the big stuff,” said Saltzer, executive director of the Assn. of Community Human Service Agencies, a nonprofit group that represents foster family agencies.

But the agencies are concerned, he said, “that the auditor-controller is going to nitpick every nickel and dime. You know, you take a kid out to McDonald’s and you don’t have a receipt and they ding you for it.”

One sticking point is what to do with the money that various agencies have left over each year. Foster family agencies collect $1,500 to $1,800 monthly per child, based on rates set by the state.

The fixed rates allow some flexibility in caring for children, but Los Angeles County wants to make sure that any unspent cash is closely monitored or returned to the government.

“Some of these guys are obviously making quite a bit of money,” McCauley said.

“We had to say something, because the best way for them to make a profit is not to take care of the kids so well.”