Nebraska finds problems with child welfare privatization

OMAHA, Neb. (AP) — Nebraska’s use of a private contractor to help care for neglected and abused children in the Omaha area has been plagued with problems, including high worker turnover, inadequate funding and a lack of direction, according to a legislative report released Wednesday.

The report comes a day after the state said it would terminate its contract with Saint Francis Ministries, a Kansas-based provider that faced major financial problems after winning the contract in 2019. Saint Francis was hired to oversee child services in Douglas and Sarpy counties.

Nebraska began its experiment with privatized child welfare services in 2009, hiring private organizations in different regions to coordinate and manage services such as family visits, preparation for court hearings and filling out paperwork. Over time, all regions except for the Omaha area reverted back to state management, as providers struggled to handle large caseloads, fell short of expectations and lost money.

“Through its work, the committee observed that Nebraska’s privatization initiative, beginning in 2009, suffered from the lack of an appropriate cost analysis and a contract structure that pushed financial risk onto the contractors,” lawmakers said in the report. “The result was a disruption in child welfare across the state, as contractors dropped out one-by-one.”

Nebraska officials negotiated a new, $66.7 million contract with Saint Francis in January to prevent it from running out of money. Saint Francis won the initial contract in 2019 by substantially underbidding PromiseShip, an Omaha-based agency that held the previous contract.

Saint Francis agreed to provide similar services at a 40% discount to what PromiseShip could offer. The Nebraska Department of Health and Human Services later faced criticism for accepting a bid that should have seemed suspicious at the time and later proved unrealistic.

Saint Francis also struggled with high caseloads and turnover among its workers, and its previous executives were fired after an investigation uncovered financial mismanagement within the nonprofit.

In its announcement on Tuesday, the Nebraska Department of Health and Human Services said the agency would take over case management responsibilities but continue to use Saint Francis as a child placement service.

“Our mutual respect, passion, and love for the children and families in our care has allowed us to arrive at this decision,” said Dannette Smith, the department’s CEO. “Although Saint Francis will no longer serve as the lead agency in the (Omaha area), our partnership with this agency will continue.”

William Clark, the president and CEO of Saint Francis Ministries, said the nonprofit will work with the state to ensure a smooth transition for children and their families. The state will likely hire some Saint Francis employees to continue serving children.

“In the coming weeks, our first priority will remain caring for those we serve,” Clark said in a statement.