A Nebraska lawmaker wants a state investigation into allegedly fraudulent dealings at the Kansas-based nonprofit that previously handled child welfare cases in the Omaha area.
Senator Machaela Cavanaugh of Omaha sent a letter last week to Nebraska Attorney General Doug Peterson asking him to take action on behalf of Nebraska taxpayers and the child welfare system.
Specifically, she asked Peterson to file a lawsuit demanding that Saint Francis Ministries, the organization’s former CEO, Robert Smith, and information technology company WMK Research preserve any evidence related to the contract of Saint Francis with Nebraska.
She also requested that he ask the Nebraska State Patrol to launch an investigation into Nebraska’s dealings with the Tri-Entities.
Saint Francis Ministries won a five-year, $197 million contract from the Nebraska Department of Health and Human Services to oversee the care of abused and neglected children in Douglas and Sarpy counties in July 2019 after offering 40% less than the previous entrepreneur.
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But the Kansas company‘s tenure was troubled from the start. Costs rose, while the agency never met workload standards set by Nebraska law and continually defaulted on other contractual requirements. In December 2021, Nebraska officials announced an early termination of the contract.
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The financial problems of the association began surfaced October 2020, when its two main managers were sacked following a report from a whistleblower. An internal investigation into financial mismanagement followed.
Among other things, the investigation noted a “potential conflict of interest” between Smith and Bill Whymark, the president of WMK Research of Mount Kisco, New York. The report says Whymark was hired to write a new suite of software for the agency, but no software was delivered in a year.
The investigation also found that Whymark billed “an unlikely amount of time” and that Smith spent minutes or less reviewing thousands of dollars in bills from him.
Last month the Kansas reflector reported that federal prosecutors decided to seize $700,000 in a civil asset forfeiture case alleging Whymark defrauded Saint Francis by submitting forged invoices.
According to the online media, an FBI agent said in court filings that there are probable grounds to believe Whymark engaged in a multi-year scheme worth $10.73 million to Saint Francis Ministries. .
Cavanaugh cited those reports in his application to the attorney general. She said she was “particularly concerned that Nebraska was also defrauded by Saint Francis Ministries, but we have taken no action to recover these monies.”
The attorney general’s office declined to comment on the letter. Saint Francis did not respond to a request for comment.
HHS records show Nebraska paid St. Francis a total of $175 million for case management from October 2019 through April 2022.
This includes $28 million paid during the transition to state case management and payments made under an emergency contract signed in January 2021. The $147.3 million contract over 25 month replaced the first contract and erased the initial cost difference of 40%.
Nebraska officials signed the emergency contract after then-acting Saint Francis CEO William Clark declared that the association could not continue operating without increased reimbursement.
He said the agency expected to lose about $27 million in its first full year on the Nebraska contract. He also said the entity used $10 million in contracts with the state of Kansas to cover gaps in the Nebraska contract.
He blamed the recently dismissed executives for underbidding the Nebraska contract, which led to a financial crisis at the nonprofit organization.
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