Looking Deeper into Statements of Saint Francis Ministries and DHHS Under Oath
Data provided by the Nebraska Foster Care Review Office.
By Emily Chen-Newton
Thousands of Nebraska children have been placed in the care of Saint Francis Ministries (SFM) since 2019 since the Kansas based child welfare agency was awarded the contract for case management in the Omaha area. SFM grossly underbid the contract compared to the previous cost of providing services in this area. Trying to operate on an inadequate budget, SFM saddled caseworkers with more cases than is legally allowed in the state of Nebraska, and as a result caseworkers have been leaving in droves. Earlier this month several members of the Nebraska Department of Health and Human Services and Saint Francis Ministries were subpoenaed and gave testimony under oath to the investigative committee formed by the legislature to look at how and why the contract was originally awarded to Saint Francis Ministries.
Given the SFM’s high turnover rate (if their current pace continues, SFM will have 100% turnover by the end of the year), children in SFM’s child welfare system are shifted from one case manager to another at alarming rates. More than 63% of children cared for by SFM have been passed between three caseworkers. According to established research this kind of movement drastically reduces a child’s chances of ever finding a permanent home. When a child has more than five caseworkers, which roughly 35% of SFM’s kids do, their chances of finding a permanent home is only 0.3%, compared to 74% when they have one consistent caseworker.
As investigations in both Kansas and Nebraska progress,it seems clear this situation was avoidable.
Several investigations have shown red flags were were within view of both the Nebraska government and SFM before the contract was signed. The evidence of such is coming more from the report of a private investigator in Kansas and Nebraska’s own Inspector General for Child Welfare, than from the executives and directors of SFM and DHHS now speaking under oath to the committee. These two reports reference documents often in contrast to the testimonies of officials from both the departments of Health and Human Services and Administrative Services— part of Governor Ricketts’ executive branch— as well as Saint Francis Ministries themselves. (The Department of Administrative Services (DAS) is responsible for awarding state contracts.)
While under oath and speaking on behalf of SFM, interim president and CEO Willian Clark insisted that while, in his words, “the bid was bad,” it was done without malice or ill intent. “The work to prepare the bid was not accurate. However, the contract was not maliciously underbid by Saint Francis,” he said. Clark was not made part of SFM leadership until the end of 2019 after the Nebraska contract had been signed. He testified at the hearing that there were simply “errors in judgment by past senior leadership of the organization.”
Clark freely admitted projected financial losses from the Nebraska contract were shared with then CEO Robert Smith (Father Bobby Smith) and the chief operating officer. But in his testimony, Clark maintained there were no internal conversations about SFM being unable to fulfill the needs of the contact or the negative impacts on Nebraska children placed in their care. However, evidence presented in an investigative report from Kansas attorney Chris McHugh, described half a dozen times wherein the COO and CEO were warned the contract was “a loser,” and the COO was urged not to sign it. Saint Francis Ministries was not looking at small financial losses. McHugh’s report shows internal modeling of the Nebraska contract projected losses up to $6 million a year, of which both the COO and CEO were made aware.
Additionally, Jennifer Carter, Nebraska’s Inspector General of Child Welfare pens it plainly in her recent report, “Through information obtained by the OIG, it is clear that between January and June 2019 multiple employees with knowledge of the financial situation at Saint Francis predicted Saint Francis would lose $6 million per year on the ESA [Eastern Services Area] contract. Employees advised the Saint Francis President and CEO and COO not to sign the ESA contract as it was not sustainable. The Saint Francis President went forward with signing the contract.”
Reporting from Sherman Smith of the online news organization Kansas Reflector reveals more than simple mistakes or “errors in judgment” as time went on. In 2020 for example, SFM’s former CEO, Father Bobby Smith hid “the real costs of the Nebraska contract, removing information about the projected losses from PowerPoint slides that were prepared for a board meeting.”
The claims of naiveté coming from Nebraska government officials during the hearing are also in contrast to a report that is well-respected in the child welfare community. The Stephen Group, a government consulting firm, published a report given to Nebraska’s DHHS in May of 2019 before the Saint Francis Ministries contract was awarded. The Stephen Group assessment found that PromiseShip (who held the contract prior to SFM) was managing cases in the Omaha area for roughly the same cost per case as DHHS was for other areas in the state. Yet, when SFM submitted a cost proposal undercutting PromiseShip by 40%, Dannette Smith, CEO of Nebraska’s DHHS and Human Services, said that DHHS took SFM at their word, that they could do the job.
“That was the number that they put in the bid, and we believed that they could do the work. ”
Marnie Jensen, special counsel for the investigative committee pushed DHHS’s general counsel Bo Botelho (former DHHS interim CEO) on his knowledge of the Stephen Group Report when Botelho said there was an “impression” that SFM’s costs were comparable to Nebraska’s own Child and Family Services (CFS). Jenson reminded Botelho that The Stephen Group report showed PromiseShip which had given a bid 40% greater than SFM was in line with Nebraska’s CFS costs per child. “So those...things don't really compute for me,” said Jensen.
MARNIE JENSEN: I don't understand how those things can both be true. Can you help me?
BO BOTELHO: I don't know what the Stephens Group report based their information on so I can't, I can't speak to that or how they quantified that. What I know is what the program was expressing at the time, which would have been the CFS [costs].
DHHS CEO Smith said during the hearing that she had not read the report before the intent to award the contract to SFM was announced in June of 2019. Smith started at DHHS in February 2019, by which time the request for proposals (RFP) for new contract bidders had already been made public. Bo Botelho was interim CEO before Dannette Smith. So, Smith was not part of the initial RFP process.
There are several players within DHHS and the Department of Administrative Services (DAS) who are no longer with the departments, who did not speak at this most recent hearing. Matt Wallen, former director of child and family services is no longer with DHHS , but the executive summary of The Stephen Group Report was sent directly to him in May before the contract was awarded to Saint Francis. Wallen resigned as head of CFS less than three months after the SFM contract was signed and has not been subpoenaed by the legislative committee. Former DAS Deputy Director Doug Carlson has also not been subpoenaed by the committee, though he was part of DAS at the time. (As mentioned above, DAS is responsible for awarding state contracts.) Carlson is now the chief procurement officer for the University of Nebraska, Lincoln.
PromiseShip submitted a formal protest to DAS in response to the contract being awarded to SFM. Their complaint was still active when the contract was awarded, and was later dismissed by DAS.
