Cherokee County Courthouse in Murphy, N.C. Frank Taylor / Carolina Public Press

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Of more than $247,000 in federal money that the Cherokee County Department of Social Services mistakenly claimed over four years in foster care payments, the county had to pay back about $69,000, with the state paying the remainder after detecting the problem in a 2018 audit.

Last month, Cherokee County Finance Director Candy Anderson told Carolina Public Press that the amount the county repaid was only $20,215.48. This same number was apparently also given to the local news media in Cherokee County.

However, the N.C. Department of Health and Human Services has since told CPP that the lower amount only reflects the smaller of two installments that Cherokee County ended up repaying.

When asked for comment about the discrepancy, officials in Cherokee County did not respond.

Unique audit of DSS

The payback occurred over two months in late 2018 after the state DHHS completed a first-of-its-kind audit of all open foster care cases in a single county.

A typical state audit examines only a handful of open foster care cases. It can be months or even years between state reviews to see whether a county is adhering to federal requirements.

Cherokee County became home to the first complete audit by a unique circumstance: In late 2017, state officials learned social workers had been unlawfully taking children from parents without judicial authority.

The agreements these Cherokee County parents signed, called “Custody and Visitation Agreements,” were invalidated by District Court Judge Tessa Sellers in March 2018 as “the product of actual and constructive fraud on behalf of the Cherokee County Department of Social Services, its agents and employees, and attorney Scott Lindsay and Director Cindy Palmer.”

Shortly after Sellers signed the order, DHHS officials took over Cherokee County’s child welfare duties for several months – the first time DHHS had done so for any child welfare office. 

During this audit of open foster care cases, which spanned from 2014 through mid-2018, DHHS discovered workers had made errors when deciding whether cases qualified for federal funding. The cost of those errors amounted to $247,286, and both the county and state shared in paying that amount back.

The review involved 60 cases, of which federal funds were repaid for 11 of them, said DHHS spokeswoman Kelly Haight Connor.

County, state and federal funds pay for foster care services. Depending on the circumstances for each child, a different mix of money from the three can come into play, Connor said recently.

“However, where a foster child was found not eligible for IV-E revenues, he then is eligible for the State Foster Home Funds,she said.

The state and county paid back the money over two months in late summer 2018. Cherokee County’s share was $49,431.70 in August, and another $20,215.48 in September, for a total of $69,647.18 in funds repaid to the U.S. Department of Health and Human Services.

This means the state repaid $177,638.82 because that portion of the foster care services in question due to the audit should have been paid for with state money to begin with, even though an error by Cherokee County DSS staff prevented this from happening.

Audit occurred under cloud of SBI probe

The 2018 audit was also conducted under the cloud of a State Bureau of Investigation criminal probe into the office and former director Palmer.

Palmer was put on paid leave for a few weeks, then resigned as director and took a different position overseeing finances at Cherokee County DSS, where she remains today.

After Palmer resigned, the department was led by a series of interim directors.

In fall 2018, the county hired Amanda Tanner-McGee, formerly of Rutherford County, for the top post.

Around that time, DHHS also focused extra training on the financial side of foster care for workers in Cherokee County’s child welfare office.

Via email in January, Tanner-McGee said she is “truly inspired about where we are going and the progress the agency has made.”

She has not otherwise responded to a request for comment about what her agency repaid and why the financial mistake occurred under her predecessors.


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Kate Martin

Kate Martin is lead investigative reporter for Carolina Public Press. Email her at kmartin@carolinapublicpress.org.

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