Looking for a lesson in how government outsourcing is working in Florida?
Try this: Organizations that win business with the little-known state Division of Blind Services can bill taxpayers $58 an hour for travel time to meet with a blind person. The same organizations can charge taxpayers $2,000 or more to place one phone call.
If the deal sounds good for the groups that win the no-bid state contracts, it’s because it is.
Why? Because the private third-party vendors largely dictate the terms and receive little oversight, former Division of Blind Services employees say.
The state agency with a $52 million budget has largely privatized its support programs as a way to save money and better serve a group of 11,000 Floridians in need, state officials say.
But the results are mixed, at best.
Employee complaints about the Division of Blind Services have spawned at least three government investigations and four whistleblower lawsuits, all alleging waste on some scale.
Blind Services Director Joyce Hildreth, who worked at a group that received state contracts before joining the state in 2008, defends the state division. Under her leadership, she says, the division has repaired fragmented relationships with vendors while implementing stricter penalties for non-performing providers. Hildreth, 65, earns $119,000.
“My expectation of both (the vendors) and the division staff is that they will work together to the benefit of the client,” she said.
The record, however, isn’t so clear cut.
An annual summer meeting between the state and 16 Division of Blind Services providers offers a window into the uneven influence the groups have over an agency that is supposed to oversee them.
Their joint mission is to line up ways to help blind Floridians manage their disability from infancy to old age. The division and its outsourced vendors train blind people for everyday tasks from using a cane to pouring water without spilling. The division also operates a program to help blind people find jobs.
At the meeting, state workers and the vendors appear to be business partners, according to several current and former employees who have attended. But the vendors decide the performance criteria and penalties.
“I tried to get (the vendors) to suggest how we could get a mechanism in place so we don’t feed their coffers and have poor service,” said Jerry Edwards, a former contract manager who was fired in 2010 after he criticized the “lack of meat” in the contracts. “The attitude, from Joyce and from (the vendors) of not wanting to go there, was a real problem.”
Signs of waste are everywhere, former employees Edwards, Julius Kimmie, Robert Irons and Mary Ellen Ottman said in separate interviews.
Although the law requires state workers to monitor all 16 providers through yearly unscheduled visits, the state only visited one vendor last year, documents show. Hildreth said the agency monitors the vendors by phone.
Loosely written contracts also allow vendors to make big money by taking advantage of loopholes, the former employees say.
Providers, for example, are paid from about $2,000 to $9,000 for each person it plans to serve. The state pays the money no matter how — or how many times — a provider helps a client.
So whether a provider makes 10 in-house visits, or just one phone call, the money comes in the all the same.
During the 2012 legislative session the division asked for and received more than $540,000 in additional money to provide care for 201 blind babies on a state waiting list. But the vendors already received funding from nonprofit groups to cover the expenses associated with 172 of the same babies, documents show.
What’s more, the state pays vendors based on their plans for service, documenting only time spent and making no attempt to measure results.
“The (vendors) call all the shots,” said Ottman, a former employee who tried to raise red flags about the contracts to state officials. She quit in September.
Hildreth says the state actually underpays vendors, which have to raise money from outside sources to cover their costs.
The biggest vendors, all nonprofits, include LightHouse of Central Florida, Tampa LightHouse for the Blind, LightHouse of Pinellas and Miami LightHouse for the Blind. Top employees make upwards of $200,000 per year, according to Internal Revenue Service documents.
Representatives for the vendors say they’re interested in helping blind people, not making money.
“Everyone has to remember this is about providing services to people who need it,” said Colleen Castille, a lobbyist for the vendor trade group, the Florida Association of Agencies Serving the Blind.
Gov. Rick Scott, who has sought to privatize government services at an accelerated pace since taking office, has talked about strengthening contract transparency and uniformity.
But state officials have done little to address contracting complaints.
The state’s chief financial officer, Jeff Atwater, has audited three of the Division of Blind Services’ contracts and found them deficient, said spokeswoman Anna Alexopoulos, citing “significant issues in the management.”
Yet Atwater, whose agency signs the contract checks, only has the authority to question the prices after the contracts are implemented. He can’t void contracts, even if they are bad.
“If state agencies opt not to make critical changes to contracts post-audit, taxpayers will be on the losing end,” Alexopoulos said.
A May report for the agency’s inspector general, which does independent government investigations, criticized Hildreth for inappropriately managing contracts and punishing workers. Hildreth says those criticisms are unsubstantiated, both in interviews and with her staff.
In the state’s complicated management structure, the division is overseen by the Department of Education.
Former Education Commissioner Gerard Robinson, who resigned in August, said he spoke with Hildreth about complaints from employees, but not about the division’s contracting procedures. State officials know they need to address contracts, he said. The question is how.
State contracts are “a problem across the board, this isn’t just Blind Services” Robinson said.
Pam Stewart, the interim education commissioner who replaced Robinson, largely agreed.
“We do take seriously the need to look at all of our contracts and make sure we’re getting the best return on our investment,” she said. “We are already moving in that direction.”
Former state employees see it differently.
“I contacted lawyers, my senator, the NAACP, FOX News and the FBI,” Kimmie said. “But what I found out is ... nobody is listening.”
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