Audit: N.J. child welfare nonprofits misspent as much as $12.2M

Audit: N.J. child welfare nonprofits misspent as much as $12.2M
TRENTON — They were hired to recruit people willing to open their homes to abused children and prepare them for the demands of foster parenting.

But an audit released today found that among 20 community agencies hired by the state, several had misspent or failed to refund a total of $12.2 million from January 2010 to June 2011 —some by awarding themselves bonuses, throwing themselves a party at a country club, or hiring others to do the work and pocketing the proceeds.

The audit by the nonpartisan Office of Legislative Services found the department spends $39.9 million in contracts a year to hire 20 community agencies to manage the foster care needs of 522 children, while the other 5,229 foster children in New Jersey's child welfare system are supervised directly by state workers. Given how much the state is spending on such a small pool of kids, the Department of Children and Families should end those contracts and handle all foster care services in-house to "better monitor and control their delivery," according to the audit.

State auditors uncovered $4.2 million in “unallowable” and “unreasonable spending” by several unidentified foster care agencies. They include:

• A CEO who awarded herself and 13 employees $121,500 in bonuses ranging from $2,500 to $22,000 each.

• One agency threw itself a $2,000 country club holiday party for 50 adults and 10 children and bought $5,900 in “designer merchandise” and gift cards;

• One agency used $126,000 in contract money to pay the mortgage in violation of the state contract.

• One company charged $1,800 in gym memberships for its employees.