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."