LINCOLN — Gov. Pete Ricketts said Monday that he believes Nebraska should continue contracting out the management of Omaha-area child welfare cases.
“I’m still supportive of having a private firm handle this area,” he said. He pointed to statewide concern about children dying in state care before the state’s privatization effort, he said, adding, “I think having a balance” of state and private management is working.
Ricketts commented in the wake of news that the current private contractor needs another $25 million to keep operating this year, along with about $10 million to cover the shortfall for the fiscal year that ended June 30.
Officials with St. Francis Ministries said Friday that the nonprofit will run out of money to manage Douglas and Sarpy Counties’ cases by Feb. 12, unless Nebraska agrees to a new and costlier contract. The embattled Kansas-based agency signed its current, five-year contract in July 2019.
Ricketts expressed confidence in Dannette Smith, CEO for Nebraska’s Department of Health and Human Services, and said he expects that she would “be able to get this worked out and be able to make sure we’re taking care of families here in Nebraska.”
Once that happens, he said, the state will put more oversight in place to ensure that the agency fulfills its contract. Along with exceeding its agreed-upon costs, St. Francis has yet to get worker caseloads down to the cap set by state law.
“The expectation is they’re going to meet the caseload standards, they’re going to take care of the kids and they’re going to do it within the budget parameters that we set,” the governor said.
Ricketts dismissed concerns that the state would be setting a precedent by increasing the contract amount, noting that the state had boosted payments to the previous contractor as well.
St. Francis won the Nebraska job by offering to do it for $197 million over five years, less than 60% of the bid from PromiseShip, the Omaha-based agency that held the previous contract.
During the bid review, PromiseShip outscored St. Francis on all areas except cost. But covering St. Francis’ $25 million shortfall for this year will put its contract cost at $66.7 million, just above the $65.8 million that PromiseShip had proposed for the same year.
However, Ricketts defended the state’s choice. He said choosing St. Francis was the best decision the state could make at the time, given the information available. He said the state did its due diligence to check out the agency’s financial situation before signing the contract.
The original contract was negotiated largely by two top St. Francis executives who have since been removed by the board after a whistleblower report of serious financial mismanagement.
The agency’s interim CEO, William Clark, told Nebraska lawmakers on Friday that St. Francis failed to bid the Nebraska contract properly. He said the shortfall in the contract has been one of the top financial problems facing the agency.