The Kansas Department for Children and Families is adjusting its grant agreement with Saint Francis Ministries after concerns about finances and transparency.
DCF Secretary Laura Howard says the steps announced Wednesday “guarantee DCF receives information previously requested from former Saint Francis leadership.” They also give more information about financial difficulties incurred by Saint Francis over the past several years.
There are numerous amendments to the agreement. Saint Francis needs to pay back any misallocated funds in a nearly $72 million grant signed two years ago and expiring in 2023. Saint Francis also has to provide a raft of financial documentation, including audits, monthly and annual reports, reinvestment and repayment plans and its three-year business plan.
Financial issues jumped into the limelight late last year when results of an internal investigation revealed former chief executive officer Rev. Robert Smith and chief operating officer Tom Blythe used money for personal purchases, including $80,000 on Chicago Cubs tickets, while the agency borrowed money to pay foster parents. Both left in November.
Concerns about Saint Francis’ financial situation goes back further than that and expand beyond Kansas to Nebraska. DCF authorized an audit a year ago, which may not be done for another two months. DCF says that review is “currently focused on ensuring Kansas taxpayer dollars are spent appropriately.” In Nebraska, Saint Francis says the state has agreed to cover projected losses for this fiscal year and part of last fiscal year after saying it could lose as much as $27 million this fiscal year.
Saint Francis nearly ran out of cash a year ago after a bank decided against increasing a $10 million line of credit, but a Paycheck Protection Program loan helped to keep it afloat.
Saint Francis Director of Marketing and Communications Morgan Rothenberger says the ministry is “pleased to work with the state of Kansas to adhere to any requirements they have. Saint Francis Ministries wants to be a good partner, and we appreciate their support during recent difficult months.”
Saint Francis serves seven states — Kansas, Arkansas, Illinois, Mississippi, Nebraska, Oklahoma and Texas. It has nearly 20 offices in Kansas, including one at 1221 East 12th in Emporia.
Additional grant agreement terms
*Requiring SFM to submit its FY 2109 audit to DCF upon signing of the agreement (completed)
*Requiring SFM to submit its FY 2020 audit to DCF no later than July 1
*Requiring SFM to submit a board approved three-year business plan by March 1.
*Requiring SFM to defer any unspent funds as unearned revenue for grants awarded by DCF and isolate those funds in a separate liability account identified as DCF unspent funds beginning Oct. 1, 2019
*SFM must also submit a general plan on how it plans to reinvest the surplus of funds back into Kansas child welfare programs on signing of the agreement (completed)
*SFM must submit both an implementation plan detailing operations and financial details for reinvestment and a plan for repayment of any amount determined necessary by DCF by March 1
*Requiring SFM to pay back any misallocation of funds associated with the Kansas grant as determined by findings from the independent audit
*Requiring SFM to provide DCF income statements and other financial statements on a monthly basis starting with the cost report due to DCF on Jan. 25, 2021.
*Requiring SFM to provide DCF a fiscal year to date balance sheet on a monthly basis beginning with the cost report due by March 25, 2021.
*Requiring SFM management to participate in monthly phone calls with DCF to review progress on data recovery and other conditions set forth in the amendment
*Requiring SFM to continue its participation in and provide all documentation requested by DCF for a designated period between July 1, 2018 and Sept. 30, 2019 and agrees to provide all requested documentation for an extended period through the end of Fiscal Year 2021, to June 30, 2021.
*SFM agreeing that beginning Feb. 1, all future monthly payments made to SFM by DCF will be adjusted by the amount of the prior months unspent payment as reflected in the cost report and supporting documentation submitted to DCF by SFM
*SFM agreeing that failure to meet any of requirements and associated deadlines included in the amendment may result in a penalty consisting of up to a five percent reduction of administrative payments per month under the grant.
