Foster care agency owners unapologetic over allegations of massive overbilling

2013-02-05T11:45:00Z Foster care agency owners unapologetic over allegations of massive overbillingDEE J.HALL | Wisconsin State Journal | | 608-252-6132

After a review accused them of charging taxpayers millions of dollars in inflated salaries, expensive trips and maintaining a fleet of personal vehicles, boats and homes, the owners of a Middleton foster care agency shot back that they were grossly underpaid and proposed to "upwardly adjust" their salaries.

Dan Simon's response is contained in a 27-page fiscal review of Community Care Resources charges over three years released Monday to the State Journal.

The state Department of Children and Families is seeking to revoke the company's license, alleging Simon and his wife, Mary, overcharged taxpayers $6.1 million between 2009 and 2011, or roughly $1 of every $3 in public funds the company received.

Dan Simon vigorously denied the allegations, and an appeal of his license revocation is pending.

Also Monday, DCF spokeswoman Sara Buschman said the department's ongoing review of foster care providers resulted in two providers surrendering their licenses after the state pursued revocation. She did not name the providers but said "neither was on the scale of the current issues with CCR."

According to the state, Dan Simon earned just over $1 million in salary during the three-year period while Mary Simon, the company's program director, earned $382,047 — an amount the state alleges is at least $531,000 too much for their positions.

In his response, Simon said the pay he and his wife received is "inordinately low" compared with similar positions elsewhere and does not take into account the couple's extensive experience and broad responsibilities.

Simon claimed some of the questioned expenses were legitimate, such as $19,424 for outings to Noah's Ark for foster children and parents that he described as "therapy." In other instances he told state reviewers that he reported "unallowable" expenses, such as insurance on six cars and three boats, but did not charge the state for them.

The state rejected those arguments.

Community Care Resources is a 24-year-old for-profit company that has 30 employees and contracts with county social-service agencies, other agencies and one tribe in 25 counties. As of Jan. 23, the company was overseeing placement of about 120 children in 57 licensed foster homes, according to DCF.

The state said between 2009 and 2011, the company and a related nonprofit that ceased operations in 2010 got $18.1 million in contract revenues. The Department of Children and Families is seeking reimbursement of $6.1 million of that.

The largest single questionable expense is $3.1 million charged from the for-profit to the nonprofit for "administrative expenses." The state alleges that Simon failed to produce any documentation justifying those charges.

In a letter revoking Community Care Resources' license to place children with foster care families, DCF listed nearly $5 million in excess and unallowable costs or charges for which the company had no paperwork.

However, the letter did not mention an additional $1.3 million in "excess profits" that CCR allegedly earned over the three-year period that was listed in the more extensive fiscal review released Monday.

Simon declined to comment in an email Monday. His attorneys did not immediately return email messages seeking comment.

Buschman said Community Care Resources will continue operating while the revocation is appealed. No hearing date has been set. However, she said counties are now directly paying foster parents, rather than through CCR, while the appeal is pending.

Sen. Rob Cowles, co-chairman of the Joint Legislative Audit Committee, on Monday repeated his call for an audit of the foster care program and a criminal investigation by the state Department of Justice into the allegations.

"The use of any taxpayer money for personal gain is unacceptable," said Cowles, R-Green Bay. "The fraud, theft and abuse of Wisconsin's programs will not be tolerated."

Buschman and DOJ spokeswoman Dana Brueck both declined comment on whether a criminal probe was under way. Buschman said the Department of Children and Families is continuing to review other child-placement agencies "and final reports will be forthcoming."

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(21) Comments

  1. Norwood44
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    Norwood44 - February 05, 2013 10:03 pm
    Right. Unions are pure as the driven snow.
  2. Monitor
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    Monitor - February 05, 2013 7:09 pm
    A For-Profit business taking advantage of our taxpayer money. There will be a lot more examples of this to come with the expanded school voucher system.
  3. JoeBiteme
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    JoeBiteme - February 05, 2013 6:39 pm
    It should be noted this was a for profit agency. Why is everyone so shocked. .
  4. Blue Centurion
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    Blue Centurion - February 05, 2013 5:05 pm
    Nice try Cris. Court Orders have to be followed and what does this have to do with a couple of business owners ripping off the taxpayer?
  5. Cris
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    Cris - February 05, 2013 3:30 pm
    maybe we should be fighting crooked cops instead -
  6. WI_Expat
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    WI_Expat - February 05, 2013 2:43 pm
    The walker hate is once again strong in this blog....thanks for the tolerance you progressive hypocrites!!!
  7. ft
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    ft - February 05, 2013 1:38 pm
    I agree!
  8. number6
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    number6 - February 05, 2013 12:58 pm
    When 'more' is your goal, it's hard to get there!
  9. persia
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    persia - February 05, 2013 11:36 am
    I wonder if the Madison School Board knew that they had this kind of talent locally instead of having to look to Springfield...
  10. Word
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    Word - February 05, 2013 11:20 am
    According to the Wisconsin Democracy Campaign database, they are not huge contributors to any candidate or party, at least according to the campaign finance reports used to create the searchable database.
  11. JVMadison
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    JVMadison - February 05, 2013 10:19 am
    I think a audit should also be done on DCF to determine how such excessive and inappropriate expenses could have passed the normal approval process. Sounds to me like the people doing the work and their supervisors failed to catch even the most gross expenses.
  12. davea
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    davea - February 05, 2013 9:09 am
    This is great! How long will it take for Walker to find positions in his administration for Simon and his wife, for at least what they were paying themselves?
  13. laughalot
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    laughalot - February 05, 2013 8:59 am
    Thank you Word! You really did say it all. The minute you speak up about how little you make your name is mud and the violations and the thret of "we are going to hold the referrals on kids for your home" start coming in. It was shut up and put up.
  14. Word
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    Word - February 05, 2013 8:21 am
    The interesting part is that, under the discredited theory of contracting out, the contract is let. The overcharging is discovered. And the state 'attempts' to reclaim funds that were already spent over several years - what is the success rate on that? How much of the funds are recovered in situations like this? And could someone explain how is this more fiscally efficient or helpful to quality of services delivered, than simply hiring more state employees who provide services under strict state auditing and accounting procedures?

    How many more stories will we see about contractors who run off with large sums of money and make questionable expense claims thanks to the theory that it it is 'more cost effective' to do it this way? Privatization of employment costs way more than simply hiring people at a living wage and paying benefits. And has anyone thought about the number of tax-paying employees who could have been paid to do real work vs. the few businesses and contractors that are at the trough under WEDC, outsourced human services, and similar schemes? Where is the fiscal responsibility in all of this?
  15. Word
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    Word - February 05, 2013 8:14 am
    These folks are disgusting on so many levels. Foster families are paid very very little and assume 24/7 care for vulnerable children. More often than not, they pay out of their own pockets to help support their foster children. I can guarantee you that the average foster family lifestyle has little to do with new cars and expensive houses.

    The public employees who place and supervise foster care are paid very little.

    These folks are accused of taking every nickle they could get for their own personal use. And respond with "we should have gotten more." Meanwhile, who was supervising the placements while they were out on lavish vacations, remodeling their homes, or purchasing more expensive cars?

    If this is what privatization and contracting out for services brings us, someone ought to have their head examined. The amount of work that could be done for the amount of money these con artists blew is simply heartbreaking and wrong. FIX IT oh great fiscal conservatives. FIX IT.
  16. uwjeff
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    uwjeff - February 05, 2013 8:05 am
    Hey Mr LaMarr (potential hypocrisy alert here) remember Diamond Jim Doyle and the contributions from the native Americans and 'bingo' .... we have tribal gambling take off.........did you rant about that when that happened -- and what about his 'High Speed (choke choke) Rail shenanigans -- Never any investigations there though as some are more skilled than others in playingt the game and hiding the graft. Moral of the story......... the more government money that flows........the more corruption and mismanagment and waste that will occur..........always has been....always will be that way.........dosn't make any difference which party is in power - if you haven't figured that one out yet.
  17. Observer5
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    Observer5 - February 05, 2013 7:47 am
    Smaller government ie- inspections, oversight, fiscal reviews is not always a good thing.
  18. Mark123456
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    Mark123456 - February 05, 2013 7:05 am
    Why rob a bank when you can get a state contract. Pays better and less chance of getting caught with your hand in the till.
  19. Mr LaMarr
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    Mr LaMarr - February 05, 2013 5:44 am
    They sent out 2 sacrificial goats so the party of no looks better for the next round of elections. It's all about damage control. Even a blind man can see that! Meanwhile the Disgrace to the Office keeps adding to his defense fund even though he did nothing wrong.
  20. There is a world outside Dane County
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    There is a world outside Dane County - February 05, 2013 5:28 am
    Wow Mr. LaMarr if they are a huge contributor to Walker and his administration is cleaning up messes like this I am very pleased it would appear that support of his campaign did not buy any influence! Thanks for pointing out another positive for Wlaker. Keep up the good work.
  21. Mr LaMarr
    Report Abuse
    Mr LaMarr - February 05, 2013 5:06 am
    I hear they're HUGE contributors to Walker.

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