Genesis oversight lacking, Fresno Co. says

Published online on Saturday, Jun. 27, 2009

Until recently, Fresno County's relationship with Genesis Family Center was defined by contradiction.

On one hand, the District Attorney's Office spent years prosecuting Genesis executives for embezzling hundreds of thousands of dollars. On the other, county departments continued to award millions of dollars in contracts to the nonprofit social-service agency.

County officials once explained the discrepancy by saying Genesis provided good service. Today, some county officials offered another explanation: The county failed in its oversight of Genesis.

The investigation of Genesis started more than seven years ago and resulted in convictions last year of agency co-founder Elaine Bernard and her sister, Carol Dela Torre, another agency co-founder.

The Board of Supervisors ended the contracts this month following a series of revelations about questionable practices at Genesis -- use of expensive office space, a big salary raise and a BMW lease for Bernard, and the hiring of her boyfriend, among other things.

Susan Anderson, chairwoman of the Board of Supervisors, has asked the county's top administrator to investigate the county's handling of the Genesis contracts.

"I don't think the county has a good system for monitoring contracts," she said. "I don't think we have a way to make sure we get the most bang for our buck."

The Genesis controversy exposed flaws in the county's contract oversight, county administrator John Navarrette agreed. He said the county is taking steps to better manage its contracts.

"We probably should have been more diligent in monitoring this particular vendor," he said. "We have to take some degree of responsibility."

The Board of Supervisors voted this month to cancel the county's four contracts with Genesis. The multiyear contracts to provide mental-health counseling and substance-abuse treatment were worth almost $5 million annually and scheduled to renew Tuesday.

Earlier this year, the county's director of Children and Family Services stopped referring children to Genesis group homes and foster homes. Taken together, the decisions eventually could deprive Genesis of Fresno County funds, its top revenue source.

It's unclear how many other contracts the nonprofit agency has. Genesis officials have said they have a $13 million budget.

The embezzlement convictions of Bernard and Dela Torre played a role in the county's decision to sever ties, supervisors said. So did Bernard's probation violation for attending social events, which landed her in jail until next month.

Revelations about questionable spending by Genesis also persuaded supervisors to end the contracts, they said.

Despite Bernard and Dela Torre's legal troubles, Genesis gave them each raises of about $25,000 last year. The agency hired Bernard's boyfriend, Ken Steitz, at $55,000 a year.

Genesis moved its transition-age youth program from Shaw Avenue to office space on Palm Avenue in north Fresno -- at more than twice the cost. Genesis left the furniture and equipment bought by the county for that program, and used it for another program.

Giang Nguyen, the county's Behavioral Health director, acknowledged in an interview this week that her department did not discover most of the problems, even though it is responsible for the Genesis contracts.

Her department focuses on whether a contractor delivers services, not on financial impropriety, she said.

"We want to be able to trust our contractors," Nguyen said. "We're not looking for fraud."