City, Police Department Investigate Accusations of Fraud by Contractor
Just two months after the Seattle School District dealt with a scandal revolving around contractor fraud, allegations of financial foul play have hit another city department.
This time the focus is on the city's Human Services office, where both department officials and the SPD have opened investigations over allegations of fraud in the Kinship Caregiver Support Program, which supports grandparents and other relatives who take care of children by providing them with financial support.
The subject of investigation has been identified by the Human Services Department (HSD) as a program manager for Senior Services, a social services agency that holds 17 contracts with the city valued at over $4.2 million. According to preliminary reports, the program manager issued checks totalling $89,000 to A & F Quality Services - a hypothetical sub-contractor that was paid for home repairs and moving services for families enrolled in the Caregiver Support Program. Those services never materialized, however.
In response to the allegations, the HSD has cracked down hard on Social Services, suspending payments to the Caregiver Support Program and select other contracts while a full review of their accounting takes place. The department has also placed the director of the HSD's Human & Aging Services department on administrative leave in order to avoid conflict of interests with their research, and is bringing in an independent investigator to supplement and review their own findings.
Social Services has responded to the suspension of contracts with some frustration, asserting that the fraud was the act of one individual rather than an institutional problem within the organization. Denise Klein, CEO for the company, stated in a Seattle Times article yesterday that as soon as the company realized something was wrong in March, they alerted SHSD and began their own investigation, later firing the employee in April.
While the investigation is far from complete, the information gathered so far depicts a timeline where both city and Senior Services officials failed to respond to initial suggestions of wrongdoing. An anonymous complaint filed in November of last year claimed misuse of funds within the program, but both city and agency officials found no evidence of financial misconduct. It was only after a second complaint was filed this past March that both parties conducted a more thorough investigation, revealing the fraud.
At this point, no criminal charges have been filed. However, as the police, Senior Services and the city continue to investigate and review the financial transaction records, that may change. The city's investigation is expected to be completed by the end of June.
