State officials said Tuesday that they would not renew Contemporary Family Services' license to place foster care children, alleging that the Hyattsville-based company falsified minutes of board meetings and failed to pay its foster parents and employees on time, among other issues.
But the state said it would work to minimize the effect on foster children in the care of the company, the second-largest foster care provider in Maryland.
The Department of Human Resources outlined the issues and proposed action in a letter to the company's executive director, John L. Monroe. The company has 20 days to appeal the decision; otherwise the state action will take effect March 16, when the current license expires.
The state Department of Human Resources, meanwhile, has tapped other foster care providers to take on the 157 children now in the care of Contemporary Family Services.
The goal is for the company's 99 foster parents to become licensed by another provider while allowing the children to stay in homes where they are currently living, according to Carnitra D. White, executive director of the Social Services Administration within the human resources department.
"The department is committed to a smooth transition process to ensure that you can be re-licensed by a new agency with a minimum of inconvenience to you and no impact to the children in your care," White wrote in a letter to the foster parents.
The troubles at the company were not a reflection on the parents, White said.
Officials with Contemporary Family Services, including Monroe, did not return phone calls or emails seeking comment.
Contemporary Family Services, which has been licensed in Maryland since March 2000. is one of roughly 80 foster care providers in the state. The providers are licensed by the human resources department to place foster children in homes. Maryland has about 7,400 foster children.
The company was founded in 1997 and has served more than 700 children in the past decade. It has affiliates in Louisiana and California.
In Tuesday's letter to the company, Darlene Ham, interim director of the Office of Licensing and Monitoring, wrote that the denial of the re-licensing was based on two main findings: The company knowingly provided false information and failed to meet requirements set by state law.
The company provided a list of board members to the human resources department on April 18 that listed two board members as being present at meetings held in 2009 and 2010, but the agency later learned that they had not attended any meetings since 2008, according to the letter. Those two board members have resigned.
The company also violated state law by failing to convene a quarterly meeting of its governing board, the letter said.
The other problems that led to Tuesday's decision resulted from $115,000 being taken from the company's bank account in October to pay an outstanding debt Contemporary Family Services owed for defaulting on payments for office copiers, the letter said.
The payment caused stipend checks for seven foster parents worth a combined $11,600 to bounce. The parents had to wait four to 11 days to collect the money, which violates state law, Ham said in the letter. The situation also resulted in the company delaying employee paychecks in November.
The state's decision not to renew the company's license will also affect a contract Contemporary Family Services has with the District of Columbia's Department of Youth Rehabilitation Services, a spokesman for the agency has said. Contemporary Family Services serves 11 children there.
Jay Cleary, director of communications for the Maryland Department of Juvenile Services, said Tuesday the agency will follow the human resources department's lead and move to end its relationship with the company. Two young adults are in homes monitored by Contemporary Family Services, he said.
The state's move comes after an independent audit of Contemporary Family Services found that company money was used to pay for executives' other business ventures and personal expenses.
The company also recently agreed to a payment plan to cover $2.8 million owed to the Internal Revenue Services in fees and back taxes from 2002 to 2010.
An investigation by the human resources department's inspector general is also ongoing.
The state sanctioned the company last month and suspended its ability to make new foster care placements. The sanction resulted from the company's failure to document that it had completed annual certifications for some foster parents, which involves tracking criminal background checks and first-aid training, among other requirements.
Joan Little, chief attorney for Baltimore's child advocacy unit at the Maryland Legal Aid Bureau, said the state should move with "deliberate haste" to re-license the affected foster parents with new providers.
She said the situation may create headaches for the parents, who may find that other providers have different requirements or pay different monthly stipend rates than Contemporary Family Services.
"You might run the risk of someone being ruled out because maybe a background check gets done differently," Little said.
Little said the situation is an opportunity for the state to evaluate the way it licenses foster care providers. She would like to see the state devote more staff and resources to foster care so potential problems can be addressed quickly and seamlessly.