Manitoba·CBC Investigates

Province is paying B & L foster care agency millions even though contract expired more than a decade ago

The province paid a for-profit foster care company more than $50 million in the last five years despite the fact its contract expired more than a decade ago, CBC News has learned.

Close to 4 per cent of all children in care live in B & L foster homes

B & L Resources for Children, Youth and Families' contract expired in 2006. The province says the current review is their top priority. (Jose Luis Pelaez/Getty Images)

The province paid a for-profit foster care company more than $50 million in the last five years despite the fact its contract expired more than a decade ago, CBC News has learned.

"There is no service purchase agreement (SPA) in place for B & L Resources for Children, Youth and Families, nor is there an extension provision," wrote Families department deputy minister and access and privacy officer Jay Rodgers in a response letter to a freedom of information request.

Initially, a provincial spokesperson said B & L continued to provide services based on a previous agreement. It was not until further questioning that it was revealed the previous agreement was in effect from December 2004 to September 2006. 

Todd MacKay from the Canadian Taxpayers Federation was stunned to hear the paperwork was not in place.

"When you don't have that, you're not taking care of taxpayers' money. You're not showing due diligence for your tax dollars," said MacKay.

"The money is important, but much more importantly we need to make sure that we've got the accountability systems in place to make sure that children are taken care of."

B & L is currently under a provincial review following a CBC News investigation in November that revealed children were left in the same home as a minor who was sexually abusing them.

In November, 407 children were living in B & L managed homes, which represents close to four per cent of Manitoba's children in care based on the province's latest figure of 10,776.

The province would not explain what specific legal recourse it would have with B & L, given the agreement expired 12 years ago. 

"SPAs do not deal with the quality of care provided to children in care, as those are governed by separate standards, regulations and legislation that also provide avenues for related oversight and recourse," said a spokesperson for the Families department.

The province has been negotiating with the company over the last 18 months but now the review of B & L will take priority, the spokesperson said. 

Political scientist Paul Thomas says having a service purchase agreement in place is just the first step a government needs to make to ensure accountability. (CBC)

Service purchase agreements for other foster care providers obtained through freedom of information are highly detailed contracts which stipulate everything from insurance coverage to financial reporting requirements and treatment plans. 

B & L is the only outside agency out of eight Families department service providers that does not have a service purchase agreement in place, although several are into their extension periods. 

Those agreements are being reviewed and updated, according to Rodgers.

B & L did not respond to a request for comment.

Hydra House scandal 

Questions about B & L's service agreement first surfaced following the Hydra House scandal in the early 2000s, which resulted in a series of recommendations concerning how the province deals with external agencies.

The now-defunct Hydra House was a for-profit external agency that cared for people with severe mental and physical disabilities. In 2004, the provincial auditor found it had spent millions on bonuses for executives, trips, expensive cars and other items.

The auditor also found there was no service agreement with Hydra House and recommended it "implement Service Purchase Agreements with all funded for-profit and not-for-profit external service providers to reduce undue risk and ensure that public monies are utilized for the purposes intended."

A 2004 press release by the Manitoba government announced it accepted all recommendations and had notified all external agencies that "as a condition of funding" an SPA will now be required.

Veteran Liberal MLA Jon Gerrard spent days during question period in 2005 hammering the former NDP government on this issue, repeatedly asking if a purchase agreement had been signed with B & L. He says he is shocked that it has expired.

"Wow, that is pretty hard to believe," he said, adding he is disappointed by news that there is not a valid agreement in place.

"Agencies like this who are looking after kids have some of the most responsible, most precious roles."

The province paid $10.6 million last year to B & L. Close to half of that sum, $4.9 million, was for costs related to administration, services and programs and costs associated with caring for children with complex needs. The rest was for direct child care costs for children who are the wards of Winnipeg CFS and Rural and Northern CFS.

More than a dozen agencies sent children in care to B & L foster homes in 2016 including Winnipeg CFS, Dakota Ojibway CFS and Metis CFS, according to information obtained by CBC News. 

Metis CFS Authority CEO Billie Schibler estimated the agencies she oversees paid $5 million to the company last year. 

Paul Thomas, professor emeritus of political studies at the University of Manitoba, says signing an SPA is just the first step a government has to do to ensure proper checks and balances are in place when it chooses to contract out social services.

"You've got to have a shared understanding going into these relationships about what you're trying to accomplish in a broad sense," he said.

"When it comes to the purchase of human service delivery, say to senior care homes or to children in care, (when) writing terms and conditions in a contract or administrative agreement of some kind, it is hard to specify things like compassion or respect for the rights of children."

Thomas questions how much bargaining power the government has when purchasing services when few providers exist.

"If you pull the plug on a particular provider, what happens to the kids? I mean their interests have to come first," said Thomas.

"Often you get a kind of a slap on the wrist and they say, 'We're going to renew your contract but we're going to monitor you more closely now.'"

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