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Alvarez & Marsal pocket $3 million at end of contract after proposing big changes to overhaul dysfunctional program.

PMG FILE PHOTO - Consultants have recommended changes to the state's foster care system as part of their eight-month, $3.5 million contract.Consultants hired to lift Oregon's foster care system out of dysfunction closed up shop Dec. 20, and are expected to walk away with $3.5 million after eight months of work.

While about 60 foster children sent to facilities in other states have returned to Oregon as a result of the work of Alvarez & Marsal, a global consulting firm, the impact on the thousands of kids in Oregon's foster care system has yet to be widely felt.

State records show that in late October, the state and Alvarez & Marsal agreed to increase the company's compensation to $3.5 million. The company was originally to be paid up to $280,000 under its May 2 contract, state records show. That figure steadily multiplied in the following months.

Initially, the contract was due to end Oct. 26. Contract extensions in May, August and October were reviewed by a state procurement official and the Oregon Department of Justice, according to Gov. Kate Brown's office. Brown's April 18 executive order intervening at DHS allowed the state to suspend or change its policies on hiring and contracting to expedite those processes.

PMG/EO MEDIA/SR"The extensions were granted after (Alvarez & Marsal) demonstrated they were making progress in meeting the objectives of the (executive order)," a spokesman for Brown, Charles Boyle, wrote in an email. "Progress was monitored in daily check-in calls with staff, weekly reports to the governor, monthly meetings of the Child Welfare Oversight Board and in legislative briefings."

Improved staff training

Alvarez & Marsal are known for restructuring and business services, contracting with private companies and governments across the country to fix problems and find efficiencies. Brown brought on the consultants to overhaul the state Department of Human Services' child welfare system after a highly publicized controversy over officials' practice of sending foster kids to residential facilities in other states with little oversight.

In mid-December, Oregon Public Broadcasting published an investigation into the practice, finding that the state entrusted vulnerable kids to a private company, Sequel, that operates residential facilities. Children in those facilities have been hurt and abused, OPB reported.

Brown said the consultants would focus on internal operations of Oregon DHS to improve internal practices and procedures that would provide better treatment of Oregon foster kids. In a Dec. 17 briefing, consultants told state officials that hurdles remain. That briefing, which laid out areas where DHS still had trouble and steps to fix those problems, was provided to the Oregon Capital Bureau by the governor's office.

Consultants said that Oregon's foster care program struggles with prioritizing and carrying out projects, and that it should set up clear "roles, responsibilities and measurable goals." DHS must work better with the state's health agency to meet kids' needs, they said.

They recommended that the team reviewing deaths of children report directly to the director of the state child welfare program. Information from those reviews should be used to better train workers, consultants said.

They said the agency should establish a training unit because supervisors and caseworkers now lack training opportunities. The field offices of DHS "inconsistently enforce training and workforce development requirements" for their workers, consultants said, and the administration doesn't hold the districts or people working there accountable when they don't comply.

Making progress

Brown's office said that under Alvarez & Marsal, DHS has been developing its workforce, increasing access to services and places for foster children to live, and done better keeping kids safe. Consultants said they worked to streamline licensing of foster care providers, increased transparency in reviews of child deaths and improved the new statewide hotline for reporting abuse.

Twenty-three Oregon kids were still in out-of-state facilities as of Dec. 19, according to the governor's office. That figure is down from a high of 87, according to governor's office records. On any given day, about 7,000 Oregon kids are in foster care.

Mary Moller, Brown's director of executive appointments, said that dip reflects the "ripple effect" of fixing seemingly bureaucratic operations in a large organization like DHS. "I think that there was definitely progress made," Moller said. "We're really pleased with that progress. But are we done yet? No. We have to continue to push hard for kids and families every day."

Brown's office also touts an effort to hire caseworkers quickly. Consultants said in their presentation this week that it made 345 "conditional hires" of new workers. According to DHS, that means that the job offers are conditional on completed background checks.

Oregon DHS had known for years that understaffing put kids at risk, thanks to multiple outside audits. But in response to questions from the Oregon Capital Bureau, Brown's office said in a Dec. 19 statement that progress on the effort, including hiring the hundreds of workers this summer and reducing children sent out of state "would not have been possible without the implementation leadership and data tracking efforts of the crisis management team."

Moller said DHS is pushing to improve training for caseworkers. She said she doesn't think there is a risk that hiring hundreds of workers quickly may result in unqualified employees working with vulnerable kids.

"People were clamoring to work in this organization to help the state," Moller said. "I actually think that we have actually really qualified people. It's getting them trained is the challenging part, getting enough training to accommodate all the people that we're bringing on."

At any given time, about a dozen people were working on the DHS overhaul in recent months, ranging from wonky subjects like how the state agency handles reams of data on kids in the system to researching government funding for kids' medical care.

After the consultants' contract ends, a new management office at DHS will continue driving reforms.

In a statement, Boyle, Brown's spokesman, said the governor had brought on Alvarez & Marsal "because she wanted to see immediate and measurable progress to improve outcomes for Oregon's most vulnerable children and families."

In a mid-December interview, Rebecca Jones Gaston, Oregon's new head of Child Welfare, said an outside look is "always a creative way of being able to see things that you wouldn't necessarily recognize, or even identify gaps or processes that need to be changed, shifted, built, if you're in it on a day to day basis."

"I think what (Alvarez & Marsal) did was bring that lens around business processes and things like that," Jones Gaston said. "And were able to really quickly home in on some places where maybe existing processes were slowing down our ability to be responsive, or impacting our ability to kind of turn a ship in a nimble way."

Reporter Claire Withycombe: This email address is being protected from spambots. You need JavaScript enabled to view it. or 971-304-4148.


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