State moves to suspend foster child placements with Hyattsville company

Maryland's second-largest foster care provider failed to track background checks, training and other requirements for its foster parents, putting the children at risk, according to state officials who are moving to suspend new placements in its homes.

Ian Patrick Hines, spokesman for the Department of Human Resources, which oversees foster care and adoptions in Maryland, confirmed that Hyattsville-based Contemporary Family Services, which has 232 parents and 157 foster children in its network, was notified of a pending sanction last week and that the agency's inspector general is investigating.

Hines also said the state agency is reviewing the death of a child last week in one of Contemporary Family Services' contracted foster homes. Hines said that the death did not prompt the sanction and that the agency would review any death as a matter of routine.

Last year, the state agency launched a separate examination of the company's finances, which prompted the state to stop placements in the company's foster homes for nine months.

According to correspondence with Contemporary Family Services, the state agency raised red flags about independent audit findings, including that company money was used to pay personal expenses for executives, as well as the company's significant federal tax liability. The company recently agreed to a payment plan to cover $2.8 million in back taxes and fees owed to the IRS.

John L. Monroe, executive director of Contemporary Family Services, said that the company has reassessed its foster parents as required but that the paperwork wasn't in order. He also blames the administrative and financial problems on former employees and said that he's working to repair the damage.

"We are moving forward," Monroe said. "We're doing God's work and moving a lot of negative energy out of here."

Sanctions against foster care companies are "not routine," and revoking the contract would be an unusual step, Hines said, because the agency is concerned with causing more turmoil in the lives of foster children. The agency warned Contemporary Family Services that failure to correct violations could result in it losing its license and the foster children being moved to other settings.

"We're looking at all of our options," Hines said.

Contemporary Family Services can appeal the sanction in administrative law court. The company, which has about 50 employees and was founded in 1997, is up for its two-year state license renewal in March.

More than 9,000 children lived in foster care homes in Maryland in 2009, according to the Department of Human Resources website. Many of the children have been abused or neglected, or exposed to domestic violence or substance abuse. Companies like Contemporary Family Services act as intermediaries, contracting with the state and placing children referred by the state in homes. Many of the children the company places in homes are from Baltimore City and Prince George's County.

State officials accuse the company of failing to document annual re-certification for some of its homes, according to a Jan. 24 letter written by Darlene Ham, interim executive director of the agency's Office of Licensing and Monitoring. As part of those certifications, the company is required to document that the foster parent is qualified, a process that includes criminal background checks, proof of homeowner's and auto insurance and first-aid training.

"The administration has … determined that you have not acted to protect the health, safety and well-being of your agency's foster children from the special risk arising from living outside their homes by your failure to document timely reassessments," Ham wrote.

That letter notified Contemporary Family Services that the latest moratorium on new referrals for foster care placements would last at least 60 days, and the company is expected to devise a corrective action plan. The sanction will take effect in mid-February.

Monroe confirmed that a child in one of the company's contracted foster homes in Glen Burnie died last week. He said the child had suffered a severe asthma attack and had heart problems. The deceased child was born to a teen mother who was placed in foster care by the company, he said.

A former worker, who asked not to be identified for fear she could jeopardize future employment, said the child lived in the 100 block of Wells Avenue. Authorities responded to a call for a 3-year-old child in cardiac arrest in that block after 7 a.m. Wednesday and transferred the child to Baltimore Washington Medical Center, Arundel County Fire Department division chief Michael Cox said.

Justin Mulcahy, public information officer for the Anne Arundel County Police Department, said an investigation into the child's death has not been completed but confirmed that the deceased was a 3-year-old son of a foster child living at that residence. While the medical examiner has not ruled on the final cause and manner of death, Mulcahy said a preliminary investigation did not find the death to be suspicious.

Monroe said the foster home where the teen mother and her child were living was current on its annual certification when the child died.

Monroe said he and his staff are developing a corrective action plan to submit to the state by Feb. 9 to resolve the problems that led to the sanction. He said staff at Contemporary Family Services makes home visits to check on foster children every week.

The sanction stemmed from a site visit by agency's licensing coordinators earlier this month, following a complaint the state received, alleging that staff members were being instructed to backdate foster parent records.

Agency officials reviewed records for 94 foster parents, a sample of the 232 foster parents that contract with Contemporary Family Services, and found the company did not have all of the proper certification documentation for dozens of the parents. Staff members did provide some documentation that had not yet been filed in the records, according to the sanction letter.

Monroe said the company is now developing a system to stagger the dates when the foster parents' certification expires to improve internal oversight. He said the company has "the majority" of documents rounded up to finish the certifications.

"They were just not filed in the record," Monroe said.

The state declined to place children with the company between April and December of last year after financial concerns were raised by the Department of Human Resources. The state cited a number of warnings from an independent audit of Contemporary Family Services that raised questions about the company's ability to continue operating.

The independent audit found that the company had insufficient controls over cash management, that company money was used to finance other entities related to owners and officers of Contemporary Family Services and that thousands of dollars in company funds were spent on company executives' personal expenses, according to a May 20 letter from the agency to the company. That same letter raised concerns about the company's tax liability.

In a follow-up letter dated June 7, the agency referred to "financial improprieties and complete lack of management oversight."

Hines, the spokesman for the state agency, said the company did complete a corrective action plan to address financial concerns that enabled them to again accept placements in recent weeks. Hines added that the inspector general investigation continues, though he declined to detail the scope of that investigation.

Monroe also said the company has a new accounting staff, new policy for financial controls and an agreement with the Internal Revenue Service to pay the back taxes and fees through installments. The first $20,000 payment was due Jan. 1, according to a Dec. 2 agreement with the IRS that Monroe provided.

According to Monroe, the company failed to turn over more than $1 million in payroll taxes it withheld from employees' paychecks. The agreement with the IRS shows that the company failed to pay taxes as early as September 2002 and as late as June 30.

Monroe said the financial problems identified by the audit and IRS stemmed from poor internal controls and lack of management oversight, which resulted in a shake-up. Several employees no longer work there, he said.

The Department of Human Resources visits providers quarterly, if not more frequently, said Hines. When an inspector finds a violation, the agency works with the provider to correct it.

Hines said Contemporary Family Services has violated the terms of its contract before but has never been sanctioned. And failing to re-certify foster homes is a repeat problem at Contemporary, according to the sanction letter. A Jan. 26 letter warns the company that it is "significantly out of compliance" and that a review of "overall contractual performance" is being conducted.