Amid an emergency that threatened to leave the state with no one to manage Omaha-area child welfare cases, Nebraska officials have approved a new $147 million no-bid contract with its existing beleaguered child welfare services provider.
The move came after the Kansas-based St. Francis Ministries’ interim CEO William Clark told state lawmakers last week that the agency was going to run out of money to keep operations going on Feb. 12. To avoid that, on Friday the state effectively bailed out St. Francis with a new two-year contract of $147.3 million that expires in February 2023.
Nebraska’s relationship with the nonprofit, which operates in six states, has been strained for some time, due to alleged financial malfeasance and mismanagement by its former CEO — troubles uncovered by the St. Francis board and disclosed in December. Although that official has been replaced, Nebraska’s being forced into a new emergency contract — when there were years left on the original one — that has already led to calls to sever ties with St. Francis when the new contract runs out, according to the Omaha World-Herald.
Under the new arrangement, St. Francis will be paid up to $68.9 million for the first year and up to $78.4 million for the next 13 months, and the ministry will also be paid $10.5 million to make up for a shortage. The original five-year contract allowed for St. Francis to bill up to $41.4 million for the fiscal year ending June 30 and up to $43.5 million for the next fiscal year.
Dannette Smith, CEO of the Nebraska Department of Health and Human Services, said her department simply had no time to seek out a different provider because it had to maintain services without a break.
“The department has never wavered from doing what’s right for children and families in Nebraska,” she said Friday. “We remain steadfast in our obligation to ensure the best possible supports are in place for those we serve” in Douglas and Sarpy counties.
According to the Salina Journal in Kansas, the St. Francis board followed up a whistleblower’s complaint and confirmed that former CEO Robert Smith had racked up nearly $470,000 on the company credit card with lavish hotel stays, top-shelf meals, first-class upgrades on airfare, cash withdrawals and iTunes purchases, all the while hiding the ministry’s financial problems. A couple of other executives also lost their jobs. St. Francis was on pace to lose millions of dollars this fiscal year when Smith left.
There have been no allegations of maltreatment of foster children or staff. It is not yet clear if or how the problems with St. Francis’ Nebraska operation will impact its other child welfare contracts in Kansas, Oklahoma, Arkansas, Texas and Mississippi.