The N.C. Department of Health and Human Services discovered the mistakes by the Cherokee County Department of Social Services and tallied up the costs during a deep examination of every open foster care case in mid-2018.

The audit followed the state’s temporary takeover of child welfare services in the county due to other violations that led to a criminal investigation of DSS.

But when Carolina Public Press asked about the foster care fund repayments, Cherokee County officials have so far either declined to comment or said they didn’t know anything about it.

At the same time, the former DSS director, Cindy Palmer, and possibly others, remain under criminal investigation by the state Attorney General’s Office. The State Bureau of Investigation took more than a year to examine issues related to the custody and visitation agreements and, as of September, additional issues that had come to light.

DHHS focuses on one problem, finds more at Cherokee DSS

Although DHHS took over child welfare services in Cherokee County in March 2018, which was an unprecedented step, the need for federal reimbursement and the true scope of the problem only became known several months later.

The state takeover became necessary because Cherokee County social workers for years had taken children from parents without judicial authority, using a document called a “custody and visitation agreement.”

District Court Judge Tessa Sellers later invalidated this practice in March 2018, describing it as an unconstitutional violation of the families’ rights.

Several of the families whom DSS forced to sign the custody and visitation agreements have now sued in federal court. Attorneys for the families say hundreds more families may have signed these documents over the last decade.

Even in the March 2018 lead-up to the state’s arrival in Cherokee County, DHHS officials had heard of unrelated serious problems, according to an examination of thousands of emails and other documents by CPP.

One memo to prepare state workers regarding the county office takeover included a schedule of the first few days leading up to the takeover, a short list of talking points and new information.

A DHHS worker wrote that Judge Sellars “said she received a case file for an in camera review that was a ‘disaster.’ There were missing documents, disorganized documents and incomplete information contained in the case notes. Further, there was testimony presented at this hearing that indicated CPS case files and documentation were being stored and kept by social workers off-site and in nonsecure ways.”

In North Carolina, federal money for child welfare services goes to the state, which disburses it to individual county DSS offices.

One requirement of receiving that federal money is documentation. Social workers must write down when they visit children and their families, including what they saw on a visit. Visits must happen within a specific time frame depending on the type of case.

Social workers must also keep a record of the actions taken by the court about the case, said Harry Maney, who served as an interim director in Cherokee County during part of the time the state operated the child welfare agency.

Maney said he was never aware of a precise dollar figure for the federal payback.

“Although I was not responsible for this group (child welfare), just being in the building I could hear what was going on,” he said.

“I would go, ‘Ow, that hurts. That’s going to be a big chargeback.’ ”

‘Ineffective leadership and management’

A March 2018 assessment outlines the concerns DHHS had shortly after workers arrived in Cherokee County. The document says the office’s director, then Palmer, had “failed to execute her duties as director for key procedures in child welfare.”

The assessment said that “ineffective leadership and management … has been central to the lack of competency in its child welfare services.”

Once a child enters the foster system, he or she must be visited every so often by a social worker, who then writes down what happened. One foster child was not visited by his or her assigned social worker for more than a year, while at the same time that social worker falsified records to indicate visits had occurred.

Upon learning of this falsification in August 2019, District Attorney Ashley Welch said the worker may have committed a crime, but nobody at DHHS told her office when officials became aware of the problem in late 2017.

“If you falsify documents that you are required to keep by law, that would be a potential investigation of a possible forgery,” she said.

Forgery of contact records is not a small matter, Welch said. Several years ago in Swain County, 15-month-old Aubrey Kina-Marie Littlejohn died while under supervision by county DSS.

An Associated Press investigation found that police and social workers knew the child was being abused. Social workers forged documents after the girl died to show the visits had occurred when they in fact had not.

Welch said if she had heard about the Cherokee County DSS worker forging records, she would have asked for an immediate SBI investigation.

Years of improper records

The results of DHHS’ audit showed Cherokee County social workers had for years improperly sought a type of federal funding for children whose circumstances did not qualify for it, or for which they did not keep adequate records. As summer came to a close last year, that final tally amounted to $247,286, DHHS spokeswoman Kelly Haight said.

The review examined 60 foster care children whose cases opened as early as 2014 and included those still open by the summer of 2018. Of those, 11 of the children’s cases required repayment of federal money, Haight said.

“The majority of the errors hinged on a lack of understanding of the eligibility process,” Haight said. Children can be denied federal funding for many reasons, one of which is “a lack of required language being present in court orders.”

DHHS had never undertaken such a detailed review of a county’s methods to claim federal funds for open foster care cases, Haight said.

Normally, the state looks at foster care funding every few years, and even then only a small sample of open cases. Before 2018, the last such audit in Cherokee County was in 2016, when four out of the five cases examined passed that much smaller audit.
Haight said the custody and visitation cases were not included in this audit.

By signing a CVA, parents relinquished their children to someone else without a judge’s oversight. Some parents were told that by signing the paper, it would end their legal troubles. County workers then considered these child welfare cases as closed and stopped providing services.

Errors come with cost

While the state conducted the audit, in May 2018, Cherokee County’s acting DSS attorney, David Moore, asked DHHS how much Palmer’s actions would cost the county.

By then, it was widely known that Palmer was the subject of a criminal SBI probe. She had been on paid leave from her position as director but had applied for the newly opened business officer post.

At the time, the state was unable to give Moore a cost estimate, emails show.

Minutes from the closed DSS board meeting reflect Moore’s words: “Palmer’s lack of oversight has cost the county tens of thousands of dollars.”

Both the state and county repaid the federal money over two months in 2018.

For foster care cases, the state and county also pay a portion of the cost in addition to federal money.

“When the federal share is no longer available, the original cost of the federal share is then split between the state and county where applicable,” Haight said. “The impact to the state was minimal in relation to the total (federal) funding plan for the rest of the state.”

When a child is not eligible for federal funds, Haight said, he or she may be eligible for state foster care funds.

Why doesn’t Cherokee County seem to know about this?

However, when CPP asked Cherokee County officials from several departments about the federal payback, they didn’t seem to know anything about it.

County Manager Randy Wiggins declined an interview about the federal payback and said the county had no “responsive documents” regarding any payback.

“Without hearing these comments directly from them [DHHS] and being able to clearly understand the context and substance of those comments, I would not be able to have any comment or thought on them,” Wiggins said.

County Finance Director Candy Anderson said her office did not have documents related to CPP’s request.

Cherokee County DSS Director Amanda McGee, who started in her post after DHHS relinquished control of child welfare, said she has no comment.

Similarly, the state DHHS also had no memos, emails or other written correspondence to the county about the payback.

“Following the review, the acting director for Cherokee County Department of Social Services was notified of the payback, but no formal report was issued to the county,” Haight wrote.

When asked about the nature of the communication, she said, “Seems like this was just an in-person or phone conversation in conducting of normal business.”

Maney served as the county’s second interim DSS director that summer and was in charge of all departments except for child welfare, for which DHHS was responsible at the time. He was the interim director as the state completed its audit of Cherokee County’s foster care cases.

From his home in Winston-Salem on Friday, Maney said he at times heard of things the state workers were looking at but he was not directly involved or informed.

“I was not aware of dollar amounts,” he said, adding that $247,000 sounds “a little high” but not outside the realm of possibility.

“I was expecting it to be in that neighborhood because what I understood the agency had been doing was paying for care and charging it to be reimbursed without the appropriate documentation,” Maney said.

Fighting errors with even more training

Maney said the pay for social workers in rural North Carolina communities is low. Mandatory social worker trainings are often more than an hour’s drive away and can last for several days.

In May 2018, DHHS arranged for a series of intense workshops for staff. The department brought in “additional state consultants to provide five days of intensive group and individual training, coaching and modeling around time management,” one document says.

Coaches also spent two days with child welfare staff specifically on foster care financials and reimbursements. 

“Egregious casework was met with immediate disciplinary action,” the report says.

Workers attended even more trainings on foster care financials that fall.

Maney said that during his three-month tenure as temporary DSS director in Cherokee County, he managed a demoralized workforce, many of whom felt they were being chastised for something they had no control over.

His emails are generous with praise for the workers, and he tried to put a positive spin on difficult tasks.

“In many cases, I took on the role of a cheerleader for them,” Maney said.

In late August 2018, Maney issued a call to action to five people, creating a special team within DSS. The email sought their effort to become experts in foster care finance.

“This is a rare expertise and knowledge set in North Carolina,” he wrote on Aug. 29. “This team will be a model for small rural agencies across the state.”

However, an Aug. 30 email from a top state worker assigned to Cherokee County did not share the same rosy outlook.

“It is my opinion that there are still significant deficiencies in the knowledge of the current staff in completing these forms accurately,” wrote Tammy Shook, who served as the county’s temporary child welfare director and who reported to DHHS.

“The foster care staff [members] … very much understand the significance of these forms/processes but continue to lack the confidence in completing them,” she wrote.

“I think the training plan going forward needs to include significant reviews of these forms on each and every site visit for the foreseeable future.”

Maney is now retired. His decadeslong career has taken him to many counties in North Carolina. The problems state workers found in Cherokee County, he said, are in every corner of the state.

“If a federal audit took a look at a county out east, or any county that’s more than a three- to four-hour drive from Raleigh, they would probably find the same thing,” Maney said.