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Nebraska state senator calls for investigation of Omaha-area child welfare contract
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Nebraska state senator calls for investigation of Omaha-area child welfare contract

LINCOLN — Nebraska has no backup plan to care for abused and neglected children in the Omaha area if an embattled Kansas nonprofit can no longer do the job, a top state official acknowledged Wednesday.

Dannette Smith, CEO of the Department of Health and Human Services, told lawmakers there is no “plan B” for transferring case management from St. Francis Ministries to state employees “at this time.”

“Always you have to have a backup plan,” she said, “and we thought the backup plan for the kids that we’re serving right now was to keep St. Francis.”

Smith made the comments while testifying before the Legislature’s Executive Board. She spoke in opposition to creation of a special legislative committee to investigate and oversee the contract with St. Francis, arguing that the Legislature’s Health and Human Services Committee is better suited to provide oversight.

Machaela Cavanaugh mug senators (copy) (copy)

Cavanaugh

But State Sen. Machaela Cavanaugh of Omaha, who introduced Legislative Resolution 29, disagreed.

She said the proposed panel needs to include members from various legislative committees and have the power to subpoena documents and testimony. Without that power, she said, state agencies can ignore requests from lawmakers.

The group would be charged with looking into how Nebraska ended up signing the contract with St. Francis in July 2019 and the events that have followed, including the discovery of mismanagement by top St. Francis officials and last week’s signing of an emergency contract that pours more money into keeping the nonprofit afloat.

Cavanaugh said the goal of the committee should be fact-finding and learning lessons, not casting blame.

“LR 29 is not about one person doing the wrong thing,” she said. “LR 29 is about understanding how we became entrenched in another tenuous contract for child welfare in our state.”

St. Francis won a contract to oversee child welfare case management in Douglas and Sarpy Counties by offering to do the job for $197 million over five years, less than 60% of the bid from PromiseShip, the Omaha-based agency that had been managing the cases. Transition of cases from PromiseShip to St. Francis began in October 2019 and was complete by January 2020.

But the original contract had been negotiated largely by two St. Francis executives who were removed in October last year by the organization’s board after a whistleblower report of serious financial mismanagement.

Interim St. Francis CEO William Clark told lawmakers late last month that the agency was facing a shortfall and would be out of money to operate by Feb. 12, unless Nebraska agreed to pay it more. He acknowledged that St. Francis failed to bid the contract properly and said the shortfall has been one of the top financial problems facing the agency.

HHS responded by inking a 25-month emergency contract that boosts payments by 55% over what St. Francis had been getting. The $147.3 million contract ends Feb. 28, 2023, the month after Gov. Pete Ricketts is term limited out of office.

Despite overspending its contract, St. Francis has yet to bring caseloads down to the limits set by state law. Three key measures of the quality of child welfare services have worsened under the agency’s management.

The three measures are: children being reunited with their parents in a timely and permanent manner, children getting adopted in a timely manner and children leaving foster care for permanent homes. All three declined from Dec. 2019 through November last year, in contrast to the months prior.


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Martha Stoddard keeps legislators honest from The World-Herald's Lincoln bureau, where she covers news from the State Capitol. Follow her on Twitter @StoddardOWH. Phone: 402-670-2402

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