Nebraska officials react coolly to call for legal steps in Saint Francis Ministries case

LINCOLN — Nebraska officials reacted coolly to a call by State Sen. Machaela Cavanaugh on Thursday to explore whether the State of Nebraska was defrauded during its failed, child welfare contract with Saint Francis Ministries.

The Nebraska Attorney General’s Office, which Cavanaugh asked to take some initial legal action, declined to comment, and a spokeswoman for Gov. Pete Ricketts said the request was being reviewed.

State Sen. John Arch of LaVista, who headed a special legislative investigation into the Saint Francis contract, said that exploring criminal or civil liability was not part of the charge of the Saint Francis  probe.

AG has information

“The committee’s report and all documentation is available to the Attorney General for his review should he choose to do so,” Arch said in an email.

Cavanaugh’s request was the latest development in the saga of Kansas-based Saint Francis, which won a state contract to oversee child welfare cases in eastern Nebraska in 2019 despite severely underbidding the work. That led eventually to an emergency influx of $110 million in extra funds from the state to keep the organization afloat and serving about 2,500 state wards.

Nebraska terminated its contract with Saint Francis in December 2021 after the organization continued to fail to meet contract requirements, despite the extra allocation of funds.

Cavanaugh led criticism

Cavanaugh, who has led criticism of the Saint Francis contract, had called repeatedly for the contract to end. The state’s inspector general for child welfare and the special legislative committee headed by Arch also concluded that the contract should be terminated.

On Thursday, the Omaha senator requested that the Nebraska Attorney General’s Office take legal action to compel  Saint Francis, its CEO and one of its subcontractors, WMK Research, to preserve evidence relating to the contract with Nebraska for “any pending or future civil or criminal litigation.” She also asked the AG to call in the Nebraska State Patrol to investigate.

Cavanaugh said she made the requests as “step one” in the State of Nebraska’s review of whether the state was the victim of fraud.

Duty to kids, taxpayers

“We have an obligation to provide services for the children in our child welfare system,” she said. “We also have a fiduciary duty to make the best use of taxpayer dollars. In this instance we did neither.”

“Now is our opportunity to take steps toward rectifying those mistakes,” Cavanaugh added.

In Kansas, the FBI has moved to seize assets of WMK Research owner William Whymark, after it was discovered that he submitted millions of dollars of fraudulent invoices to Saint Francis, inflating his expenses and the information technology work he claimed to have performed.

Nearly $11 million in billing was identified by federal investigators as probably fraudulent. Saint Francis has taken legal steps to recover its funds.

In August, when the Kansas Reflector reported the fraudulent billing, Cavanaugh had said it was time for Nebraska to “revisit” whether it could recover some of the funds it spent on the Saint Francis contract.

State wards increase

Also on Thursday, the Nebraska Foster Care Review Office issued its annual report, stating that the number of state wards had risen by 2.1% during the past fiscal year and that over 50% of wards in the Omaha area — the area formerly served by Saint Francis — had a revolving cast of caseworkers, at least five.

The foster care office recommended that a task force be formed to address racial and ethnic disparities in the system. Also recommended was that the state “fully invest” in increasing the availability of mental health and substance abuse treatment services across Nebraska.