A bipartisan group of U.S. lawmakers wants to tighten rules for groups taking federal money to house migrant children, years after a North Carolina company cost taxpayers millions for a shelter that never opened.
Under legislation introduced in the U.S. House and U.S. Senate Thursday, companies and nonprofits planning to open shelters for migrant children would need to be licensed by state regulators before applying for funding from the federal Office of Refugee Resettlement. That agency cares for migrant children separated from their families or detained at the border alone.
Grant applicants would also have to disclose any previous violations or pending investigations — disciplinary actions related to the abuse or neglect of children, for example — for the last five years.
“I do believe this will help ensure that only the legitimate, licensed facilities with a good track record will be entrusted with this responsibility,” said Rep. David Price, D-North Carolina, who sponsored the House bill along with Rep. Mariannette Miller-Meeks, R-Iowa.
Federal agency missed issues with NC company
Such requirements were not in place in early 2019, when the federal agency awarded a grant worth up to $8 million to a Raeford, N.C.-based company called New Horizon Group Home for a proposed facility in Scotland County.
Although the company held other types of licenses to run small group homes in the past, New Horizon did not have a state license to operate a residential childcare facility in North Carolina. It didn’t apply for that license, in fact, until after the federal grant was awarded.
And New Horizon didn’t tell federal officials that North Carolina regulators abruptly shut down one of the company’s group homes almost a year before, after discovering conditions that “present an imminent danger to the health, safety and welfare” to the young boys in their care.
The issues prompted state health officials to revoke the facility’s group home license, an enforcement action that under state law prevented New Horizon from obtaining new licenses for five years. In effect, state regulators concluded, that meant the company couldn’t open a new facility in North Carolina until at least 2023.
Yet none of those issues stopped the company from drawing down almost $4 million in federal funds through the grant in early 2019 . Or from signing a $1.2 million lease for a vacant Laurinburg, N.C., nursing home and paying out hundreds of thousands of dollars for personnel and “fringe benefits.”
Lax oversight sparks Senate inquiry
In a bipartisan Senate investigation released in late 2020, federal officials said they didn’t find out about New Horizon’s past until Price and his congressional colleagues started asking questions — sparked by reporting from WRAL News in July 2019.
The company’s proposed facility never housed a single migrant child. And about a year after those initial reports by WRAL News, the federal Administration for Children and Families demanded that New Horizon pay back about $3.1 million in grant money the agency said was misspent, unapproved or improperly documented.
Price’s office said it’s unlikely the federal government will get all of that money back.
New Horizon CEO Barbara Brockington, who last summer filed an appeal over the effort to claw back the funding, did not return a phone call or email this week seeking comment.
Although New Horizon wasn’t the only company at issue, Price said it was “a very egregious case.”
It was one of two companies named in the 2020 Senate report, which blamed lax oversight for the waste of $32 million in taxpayer money for shelters that never opened. An earlier report from the U.S. Government Accountability Office found similar problems with oversight at the Office of Refugee Resettlement, concluding the agency awarded grants to 14 unlicensed facilities that were unable to shelter children for a year or more.
Although the GAO report didn’t mention New Horizon by name, it referenced the company’s case as an example of a grant applicant that wasn’t even eligible for a state license — a fact that was not disclosed in the company’s application.
Bill would make changes permanent
ORR and its parent division, the Administration for Children and Families, have changed policies since discovering issues with New Horizon and other companies. As of late 2019, applicants for migrant shelter grants must disclose past enforcement actions. And some of the agency’s grants require licensing at the time a company or nonprofit applies.
Legislative proposals introduced last week would make those policies uniform and permanent, Price said in an interview with The News & Observer.
“We want to nail it down with a federal statutory requirement so that this isn’t open to the vagaries of future administrators or future administrations,” Price said. “This needs to be a standardized set of procedures.”
Under the bill, federal agencies would have to collaborate with state regulators to look for evidence of past enforcement actions.
Price said he expects it will help that the bill has cosponsors on both sides of the aisle in the House and the Senate.
Ohio Republican Sen. Rob Portman, who sponsored his chamber’s version with Sen. Tom Carper, D-Delaware, urged colleagues to support the measure when he announced its introduction last week.
If it does become law, Price said it will result in more than just better oversight of taxpayer money — children will be better protected.
“There’ll be a degree of assurance that they will be responsibly cared for. I mean, that’s the bottom line,” Price said. “That’s what these sets of these contracts are all about.”
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