Back to the beginning Rosemary Carr Page

Here's a photocopy of the below 8 page document.
Below is the text of the August 21, 1990, 8 page revised audit findings, conclusions and orders, from the DSHS Chief of the Office of Vendor Services, Rosemary Carr. The audit finding was that the OKBR owed Washington State $79,952.92. The OKBR never repaid that money.

DEPARTMENT OF SOCIAL AND HEALTH SERVICES - OFFICE OF VENDOR SERVICES
IN RE: CAUSE NO. 89-13
FINDINGS, CONCLUSIONS AND ORDER(S) OK BOYS RANCH
INTRODUCTION

On June 19, 1989 a contract dispute hearing was requested by OK Boys Ranch Director, Tom VanWoerden, to resolve issues raised in performance audit report GFC-031-89 for the audit period of July 1987 through October 1988. This audit was issued in June of 1989. On October 30, 1989 Jerome L. Buzzard of the law firm of Buzzard, Darkenwald and Allen, appeared on behalf of the (Olympia Kiwanis ) OK Boys Ranch, (hereinafter "contractor").
A dispute resolution conference was convened on November 22, 1989. Present at the conference were the Hearings Officer, Steven H. Borchardt; Audit Team Supervisor, Art Cantrall; Audit Team Members, Karen London, Ken Malmin and Lynn Muncaster. The contractor's representatives included their legal counsel, Jerome L. Buzzard, Esq.; Ranch Director, Tom VanWoerden; and employees, Laura Rambo, Collette Quelener and David Lassley.

STATEMENT OF THE CASE
The contractor is a Washington non-profit corporation doing business with the Department of Social and Health Services (DSHS), in this case, under the terms of Division of Children and Family Services (DCFS), contract(s) 1850-62514 (Group Care) and 1890-61620 (Child Placement). The Office of Operations Review (OR) originally audited this facility in March of 1981 and repeated the findings of the report issued in July of 1981 in the 1989 audit. It is the 1989 audit which the contractor appeals.
The audit findings in dispute here were initially presented at the November 22nd hearing as follows:

Finding VI.A.9 Overpayment of $5,763.99 due to lack of qualified staff as required by the contracts.
Finding VI.B.5 Overpayment of $8,207.23 because the contractor did not notify DCFS when youths were placed in Detention beyond 72 hours and did not document department authorization for absences beyond 72 hours.
Finding VI.B.6 Overpayment of $61,208.72 for all Exceptional Cost Payments (ECP) because it could not be determined that these services were in addition to those required under the underlying basic Level III service requirements.
Finding VI.B.7. overpayment of $200.00 because payment began one month before service commenced.
Findina VI.B.8 Overpayment of $394.34 for ECP reimbursements received after the youth's discharge.
Finding VI-B.9 Overpayment of $20.00 for one-time payment not authorized or justified.
Finding VI.B.12 Overpayment of $8,115.00 for payments beyond the date of discharge.
Finding VI.B.13 Overpayment of $9,379.16 for double payments in behalf of three clients.
Finding VI.C.6 Overpayment of $2,030.38 because the contractor placed two youths in unlicensed foster homes.
Finding VI.C.7 overpayment of $9,158.18 for claims above the basic rate without approvals and/or without documentation of services provided.
Finding-VI.C.8 Overpayment of $545.04 for reimbursement of exceptional cost maintenance and transportation costs not expended for authorized purposes.
Finding VI.C.12 Overpayment of $1,202.72 due to double payments.
Total Contested Overpayment Amount - $106,224.76 (prior to revisions contained in subsequent portions of this report)

Findings in the VI.B. series relate to the DCFS group care contract. Findings in the VI.C. series relate to the child placement contract.
The contractor's attorneys feel that the audit "is completely off base and the conclusions it draws unwarranted." (Letter, J. Buzzard, October 30, 1989, P.I.) Mr. Buzzard then undertakes a section-by-section denial of the audit and concludes that :
"This auditor approached this audit with a bias and in an effort to find as much fault as he could. Throughout, he failed to accept any of the evidence. It was summarily rejected. It was almost as if it was a challenge to see how many technical violations could be found."
Letter, J. Buzzard, October 30, 1989 of page 24.
A contract dispute hearing was ultimately convened on November 22, 1989, after both the contractor and the Department had presented pre-hearing Statements of Claims, examined each others documents and finalized presentations. The OR representatives agreed during the course of the hearing to accept new documentation presented by the contractor which relates to certain audit findings. The new documents were reviewed and on March 19, 1990, Mr. Cantrall presented a supplementary memorandum, which indicated that all new documentation related to finding VI.B.6 and to DSHS Exhibit E, Mr. Cantrall accepted all documentation in support of the provision of contracted counseling services where copies of the client's approved Exceptional Cost Plans (ECP) were supplied by the contractor. These various adjustments lowered the overpayments identified in Finding VI.B.6 from $61,208.72 to $54,038.32. The remainder of the VI.B.6 finding should stand, according to Mr. Cantrall, due either to the absence of approved ECPs or lack of documentation of services provided.

FINDINGS AND CONCLUSIONS

FINDING VI.A.9: $5,763.99 overpayment due to lack of qualified staff as required by the contract. (Citing Contract Statement of Work, DCFS -Manual Chapter 34, Notice T-24 and Notice T-26, by incorporation.)
The payments involved here are for additional Early/Enhanced Discharge and After Care (EEDACs) reimbursement. The appropriate rule for child care staff qualifications is WAC 388-73-606. Our review of the resumes, credentials and degrees presented by the contractor in the pre-hearing Statement of Claims convinces us that the facility was staffed properly under WAC 388-73-606 at sub-paragraph (2). FINDING VI.A.9 IS REVERSED IN FAVOR OF THE CONTRACTOR.

2. FINDING VI.B.5: Overpayment of $8,207.23 because the contractor did not notify DCFS when youths were placed in detention beyond 72 hours and did not document department authorization for absence beyond 72 hours.
At the conclusion of the hearing process, we are not in possession of any documentation which proves that DCFS was notified of nor approved payment during extended absences. We agree that under WAC 388-70-054 more is required than notification in subsequent quarterly progress reports or by the presentation of various telephone call slips. Contract 1850-62514 requires formal notice and approval to be documented and retained in the contractor's individual client records. Payments for unauthorized absences from the facility which exceed 72 hours were not properly documented and are subject to recoupment. FINDING VI.B.5 IS UPHELD IN FAVOR OF THE DEPARTMENT IN THE SUM OF $8,207.23.

3.- FINDING VI.B.6: Overpayment of $61,208.72 for all Exceptional Cost Payments (ECP) because it could not be determined that these services were in addition to those required under the underlying basic Level III service requirements.
The audit team left the November 22, 1989 conference with additional documentation they had agreed to review. Upon doing so, the Finding was adjusted from $61,208.72 to $54,038.32.
We have reviewed the same materials the audit team has and we have carefully cross-checked the contract requirements. Whether the individual youths involved incurred costs to the state for counseling or 1:1 staffing, service plans remain unauthorized in violation of contract special terms and services remain poorly documented. Washington law obligates the department to act as a fiduciary in the expenditure of public funds. We feel that the contract, and its incorporation, are sufficient to pass the accounting responsibility along to the contractor in conjunction with the provision of services purchased under the Statement of Work. We note that finding VI.B.6 on inadequate documentation is a repeat finding from the September 1981 audit giving the contractor adequate notice of these record-keeping deficiencies. The contractor testified that the therapy bills were presented to the auditors. The record-keeping and service verification provisions in these contracts require more:
Proper verification of Exceptional Cost Plans and related services requires that the Plans be signed by the contractor and the appropriate DCFS Regional Administrator, indicating prior written approval by the department for services over and above the standard Level III Group Care rate agreed to in the contract. We recognize Mr. Buzzard's sworn statement (Exhibit 24) from a State of Washington Department of Personnel section manager, and, frankly, it tends to convince us that a Master's Degree in Human Relations may be equivalent to a Master's Degree in Social Work. However, the contractor indicated that this person was a "live in" and we, too, were presented with no proof of established work hours to determine the number of child care hours performed. Accordingly, we do not feel it proper to adjust this finding other than to adopt adjustments presented after the audit team accepted additional records from the contractor during the hearing.
Finally, this is not the forum for equitable arguments concerning quantum meruit and unjust enrichment, no matter how expertly articulated. We are constrained here to interpretation of the contract requirements and application of those requirements to proof of facts. ORIGINAL FINDING REDUCED BY $7,170.40. FINDING VI.B.6 IS UPHELD IN FAVOR OF THE DEPARTMENT AT THE ADJUSTED LEVEL OF $54,038.32.

4. FINDING VI.7: Overpayment of $200.00 because payment began one month before service commenced.
The testimony provided by Mr. Van Woerden, regarding an agreed procedure with the Division of Children and Family Services that the contractor would continue services after the expiration of a time-limited Exceptional Cost Plan to cover payments made in advance of the provision of the service, is a classic demonstration of department program employees making representations to the contractor which are in contradiction of the terms of the underlying contract. A contractor thereafter relies an what, in effect, are waivers to contract terms by apparent agents authorized to speak for the department. Not surprisingly, equity arguments on detrimental reliance follow as a shield from allegations of breach of contract terms.
However, as previously stated, we are obligated to remain within the four corners of the contract, and, having given the relevant terms their ordinary, common meaning, we hold for the department. The contractor's documents show that payment for services began before the client began therapy, in violation of the contract. FINDING VI.B.7 IS UPHELD IN FAVOR OF THE DEPARTMENT IN THE SUM OF $200.00.

5. FINDING VI.B.8: Overpayment of $394.34 for ECP reimbursements received after a youth's discharge.
This Finding involves payments to the OK Boys Ranch for two youths for seven and eighteen service days, respectively, after the date of discharge. Both clients are included in Finding VI.B.13 for overpayments under the regular rate as well. The contractor maintains that the audit was and is in error, relying on Social Service Payment System documentation to disprove the alleged dates in the audit. Mr. Cantrall offered at the hearing to review department remittance advice records and provide verification in support of this Finding.
We heard nothing more from the audit team and Mr. Cantrall on this issue. We find the records and testimony of the OK Boys Ranch staff sufficient. FINDING VI.B.8 IS REVERSED IN FAVOR OF THE CONTRACTOR IN THE SUM OF $394.34.

6. FINDING VI-B-9: Overpayment of $20.00 for one-time payment not authorized or justified.
This Finding involves a single payment for one youth without proper authorization. The contractor presented a payment receipt from the courtordered drug education class from a Community Youth Services facility. Mr. Cantrall accepted the documentation at the hearing and dismissed the Finding. FINDING VI.B.9 IS REVERSED IN FAVOR OF THE CONTRACTOR IN THE SUM OF $20.00.

7. FINDING VI.B.12: Overpayment of $8,115.00 for payments beyond the date of discharge.
The Finding involves seven youths and payments allegedly made after the date of discharge. The auditor's comments were to the effect that the contractor did not clearly identify the dates when clients leave group care and go into foster care. The auditors maintain that unless there was written approval to hold a group care bed, that the contractor should be reimbursed according to the foster care rate.
The contractor, on the other hand, initially answered the audit as follows:
"Our total overpayments were $3,759.69. Our total underpayment was $654.96. We acknowledge a total overpayment of $3,104.73..."
At the hearing, the contractor presented additional information obtained from DCFS caseworkers and DCFS supervisors and made the following acknowledgements of overpayments:
"We have documentation that proves no overpayment(s) except for one payment of $908.44 and one overpayment of $1,506.89."
No further documentation was presented by the contractor after the hearing, pending a decision as to whether supplemental information would be allowed. A decision as to admitting new information at the hearing was deferred. However, the contractor did receive a second audit review of materials presented at the hearing, with adjustments made to Finding VI.B.6, as previously mentioned. On March 23, 1990 we did offer a second hearing opportunity to review documentation referenced here and no second review request was made by OK Boys Ranch.
We are left with audit work papers that show a total overpayment of $8,115.00 and the testimony of the contractor that the proper overpayment should be $2,411.33. This is a figure derived from subtracting foster care money that the contractor allegedly should have received (and did not) from group care money that the contractor did receive (and should not have).
The contractor had an opportunity to reconvene, with or without the presence of the auditors, to present documentation to refute this Finding and elected not to do so. Based upon the documentation in our possession, we hold for the department. FINDING VI.B.12 IS UPHELD IN FAVOR OF THE DEPARTMENT IN THE SUM OF $8,115.00.

8. FINDING VI.B.13: Overpayment of $9,379.16 for double payments on behalf of three clients.
This finding involves duplicate payments to three DCFS clients beginning in September of 1987 through February of 1988. The contractor successfully challenged $3,168.16 of the overpayment allegations using remittance advice documents. The remainder of the finding, $6,211.00, has been successfully verified by Mr. Cantrall, through audit summary reports and payment remittance documentation which are available for inspection upon request by the contractor or through counsel. ORIGINAL FINDING REDUCED BY $3,168.16. FINDING VI.B.13 IS UPHELD IN FAVOR OF THE DEPARTMENT IN THE SUM OF $6,211.00.

9. FINDING VI-C-6: Overpayment of $2,030.38 because the contractor placed two youths in unlicensed homes.
The youths involved here were placed in unlicensed foster care homes by the contractor on a "visit" basis until the homes could be licensed. The contractor again presented new documentation at the hearing which resulted in an adjusted finding of $1,912.65. It was agreed at the hearing that the contractor would present copies of foster home licenses and related documents for review and approval of the audit team. This, to our knowledge, was not accomplished nor did the contractor elect to present the documents in a second conference. ORIGINAL FINDING REDUCED BY $117.73. FINDING VI-C.6 IS UPHELD IN FAVOR OF THE DEPARTMENT IN THE SUM OF $1,912.65.

10. FINDING VI.C.7: Overpayment of $9,158.18 for claims above the basic rate without approval and/or without documentation of services provided. The contractor stated at the hearing that they were in possession of additional payment request forms, change of service authorization forms, exceptional cost foster care plans, routing slips, social service notices that the auditors had not reviewed prior to the hearing. These documents were presented at the hearing to the audit team to attempt to disprove the Finding. When Mr. Cantrall provided his March 19, 1990 supplemental memorandum which made adjustments to Finding VI.B.6, no mention was made of these documents. His memorandum stated "All the information relates to VI.B.6 and our Exhibit E (of the department's pre-hearing Statement of Claims).
The contractor presented these documents months after the issues surrounding the seven youths arose. The department auditors elected to review the documents and inform the hearing officer as to their veracity. We have heard nothing from the department auditors and, therefore, conclude that 'the documentation was satisfactory. FINDING VI.C.7 IS REVERSED IN FAVOR OF THE CONTRACTOR IN THE SUM OF $9,158.18.

FINDING VI.C.8: Overpayment of $545.04 for reimbursement of exceptional cost maintenance and transportation costs not expended for authorized purposes.
The basis of this overpayment was that OK Boys Ranch received payments and expended those funds for unauthorized purposes. The funds involved were Exceptional Cost Maintenance money in the amount of $478.84 and Foster Care Transportation money in the amount of $66.00 so a youth could visit with parents who could not otherwise afford the travel.
The transportation money was given to the parents of the youth in foster care upon their arrival. The parents negotiated the check and the contractor offered to present the canceled check. To our knowledge no negotiated check was presented for consideration by the auditors. With respect to the ECP Maintenance, the contractor presented a change of service authorization that was signed by department representative Helen Cooms and a billing showing payment to the foster care parent involved.
We have heard nothing further from the audit team as to the veracity of this documentation and, again, conclude that it was acceptable to the department. In addition, no canceled check was presented to our knowledge. FINDING VI.C.8 IS UPHELD IN FAVOR OF THE DEPARTMENT IN THE SUM OF $66.00 AND REVERSED IN FAVOR OF THE CONTRACTOR IN THE SUM OF $479.04.

12. FINDING VI.C.12: Overpayment of $1,202.72 due to double payments.
This finding involves duplicate payments for basic foster care and for the agency placement fee for the months of May, June, July and August 1988.
Mr. Buzzard suggested a continuance was in order after some discussion off the record on documents that may be acceptable by the audit team that possibly would be the basis of an adjustment. We must decide this last Finding on the materials presented before the hearing since no second hearing was desired by the auditors after reviewing material presented during the hearing, nor did counsel for OK Boys Ranch elect to pursue the second hearing. The contractor admitted to $708.29 of the disputed sum in their pre-hearing Statement of Claims response (excerpt from the audit). We adopt that admission and, having no proof to the contrary, hold that the balance of S494.43 is due the department as well. FINDING VI.C.12 IS UPHELD IN FAVOR OF THE DEPARTMENT IN THE SUM OF $1,202.72.

ORDER
The original contested overpayment, as revised during the resolution process, is disposed of as follows:
FINDING NO. and DISPOSITION
1. VI.A.9 Reversed in favor of Contractor in sum of $5,763.99
2. VI.B.5 Upheld in favor of Department in sum of 8,207.23
3. VI.B.6 Upheld in favor of Department in sum of 54,038.32
4. VI.B.7 Upheld in favor of Department in sum of 200.00
5. VI.B.8 Reversed in favor of Contractor in sum of 394.34
6. VI-B-9 Reversed in favor of Contractor in sum of 20.00
7. VI.B.12 Upheld in favor of Department in sum of 8,115.00
8. VI.B.13 Upheld in favor of Department in sum of 6,211.00
9. VI.C.6 Upheld in favor of Department in sum of 1,912.65
10. VI.C.7 Reversed in favor of Contractor in sum of 9,158.18
11. VI.C.8 Split decision. Contractor 479.04, Department 66.00
12. VI.C.12 Upheld in favor of Department in sum of 1,202.72
Total revised overpayment in dispute . . . . . . . . . . $95,768.47

IT IS HEREBY ORDERED: The original, unrevised overpayment at the outset of the dispute ($106,224-76) is reduced by the sum of $26,271.84. The OK Boys Ranch shall reimburse the Department of Social and Health Services the reduced sum of S79,952.92 in full satisfaction of all claims derivative of this dispute.

Dated this 21, day of 1990
Rosemary Carr (signature)
Chief, Office of Vensor Services
Based on recommendations prepared by Steven H. Borchardt, Deputy Contracting Officer.
The decision of the Contracting Officer constitutes the sole administrative remedy under this contract.
cc: Yvonne Chase, Assistant Secretary, DSHS Children, Youth & Families
Leslie F. James, DSHS Administrative Services
Pat Quesnel, Office of Financial Recovery
Mark Redal, Region 6, DCFS
Bill Griffith, Operations Review

Below is an e-mail I received from a former Olympia, Washington resident.

From: ~~~~~~~~@aol.com
To: Louis Bloom manaco@whidbey.net
Sent: Wednesday, July 28, 1999 11:34 AM
Subject: OKBR
Just came across your pages and felt the urge to respond... In the early 80's (81-83) I was at the OKBR frequently as a young kid walking to/from school, I became friends with some of the boys. At one point a small boy confided to me that he was being raped by another boy in the home. The abusing boy talked about it openly!
Days later I walked the victim to OPD where we both gave statements. Later that evening I began to receive these incredibly threatening phone calls from a woman employee of the ranch who's name I believe was Paulette at my home. She kept calling over and over screaming at me calling me names. It was horrible. I thought I was helping someone. Nothing came of it. Then all these years later, it all comes out ... one of the boys that I had known there left as a young adult and still couldn't get it together, he eventually killed himself. As an adult now I don't often think back to those times but it still saddens me. All those boys that needed a safe nurturing place to be, and how many of them were better off for having been taken there? It's not about money. It cost these boys their lives, their souls, their trust. Those people who knew, who didn't care, they should feel such shame. Just my opinion.

From: louis a bloom manaco@whidbey.net
To: ~~~~~~~@aol.com
Sent: Wednesday, July 28, 1999 7:30 PM
Subject: Re: OKBR
thanks for your e-mail. from what i've read, dshs, the olympia police department, and other "authorities" didn't consider child on child rape to be against the law. it was considered "normal experimentation". The "paulette" you mention, may have been Collette Queener who was an assistant director at the OKBR. Collette, OKBR Director Tom Van Woerdan, and OKBR counselor Laura Rambo Russell were ineptly charged by Wa. St. with "criminal mistreatment for failing to stop abuse". The charges were dismissed by Thurston County Judge Daniel Berschauer on technicalities. The lawyer who represented Collette Queener said, (Nov. 14, 1996 Olympian), that it was a "witch hunt", and that " a more innocent person (than Queener) you could not have for a client. She's an ex-nun ..... I don't see how you could view her in an evil or negative light."
I congratulate you for doing the right thing, when all those adults looked the other way. I repeat on most pages that the " OKBR has cost the Washington State taxpayers over $35 million dollars (so far)", because I think most people don't care about the kids involved, but they may care that it has cost them (taxpayers) money.
louis bloom

manaco@whidbey.net