Carper, Portman Release New Report on Federal Government’s Failure to Conduct Adequate Oversight of Companies Seeking to Operate Shelters for Unaccompanied Children

Latest in a series of bipartisan reports shows that gaps in HHS’s grant process failed to sufficiently protect unaccompanied children and wasted taxpayer dollars

WASHINGTON, D.C. – Today, U.S. Senators Tom Carper (D-Del.) and Rob Portman (R-Ohio), the Ranking Member and Chairman of the Permanent Subcommittee on Investigations (PSI), respectively, released a bipartisan staff report identifying failures in the Department of Health and Human Services’ (HHS) shelter grant processes to ensure the safety of unaccompanied alien children (UACs) and safeguard over $32 million in taxpayers funds.

The report confirms that HHS awarded Office of Refugee Resettlement (ORR) shelter grants to two companies with a documented history of failing to provide adequate care of children —VisionQuest National, Ltd. and New Horizon Group Home, LLC. As a result of their previous failures in caring for children and other regulatory issues, VisionQuest and New Horizon struggled to acquire zoning and licensing approval to open shelters across the country, meaning that taxpayers paid for facilities that will never open.

A review of several prior funding opportunity announcements and interviews with HHS officials demonstrated that, prior to fall 2019, HHS did not require grant applicants to disclose prior adverse actions their respective state and local governments had taken against them. The Department conducted no independent research into the disciplinary history of either VisionQuest or New Horizon. These oversight failures could have endangered unaccompanied children trusted to the care of these companies. Additionally, until November 2019, HHS also had no policy to restrict funding for grantees that did not have a license to operate. HHS’s policy of awarding grants to applicants, including VisionQuest and New Horizon, prior to the applicants securing zoning and licensing approval led to issues that could cost tens of millions of taxpayer dollars. Currently, HHS is attempting to recoup funds disbursed for facilities that failed to open.

“Our latest report makes clear that, while HHS has taken moderate steps to protect the safety of migrant children while in U.S. government custody, significant gaps in our broken immigration system continue to fail an already vulnerable population of children. Lack of proper oversight of for-profit ORR shelter applicants has put the safety of migrant children at risk. Additionally, these failures have potentially wasted millions of taxpayer dollars on shelters that will never actually open,” said Senator Tom Carper. “While our findings show a serious need for improvement, I’m hopeful that our recommendations lay out concrete steps that the next administration can take to prioritize the care and safety of minors who are already fleeing unspeakable conditions in their home countries. I look forward to working with the incoming Biden-Harris Administration to ensure that our nation upholds our moral responsibility to these children, including by reducing the number of children who require time in shelters in the first place.”

“Our work on this Subcommittee has long focused on ensuring that the federal government and its grant recipients do a better job of caring for unaccompanied children,” said Senator Rob Portman. “Our bipartisan report found that the Office of Refugee Resettlement failed to exercise appropriate oversight and wasted millions of taxpayer dollars on organizations that could not acquire state licenses to open the planned shelter facilities.  We can and must do better, and I’m pleased that ORR has adopted many of the recommendations outlined in this report.  I look forward to working with them to continue to improve their operations and meet their responsibilities under the law.”

Since 2015, PSI has conducted extensive oversight of federal government programs designed to protect and care for unaccompanied children. The Subcommittee has issued two prior bipartisan reports in 2018 and 2016 and held three hearings on August 16, 2018, April 26, 2018 and January 28, 2016.

The report’s key findings include:

(1)  HHS disbursed $32,125,779 in grant funding for six facilities that failed to open, including five proposed facilities by VisionQuest and one proposed by New Horizon.

(2)  VisionQuest failed to obtain necessary zoning permits, which prevented the opening of five VisionQuest facilities.  HHS discontinued the grants.

(3)  The North Carolina Department of Health and Human Services revoked the operating license of a New Horizon facility for children in June 2018, but HHS awarded New Horizon a grant in March 2019 to house UAC in a new facility in North Carolina.

(4)  HHS learned of New Horizon’s ongoing licensing problems 14 months after HHS awarded New Horizon a grant for a shelter facility.

(5)  Prior to late 2019, HHS did not require grant applicants to disclose prior documented licensing allegations or concerns. HHS did not conduct independent research on previous adverse government actions against applicants related to the care of children. 

(6)  In 2018, the City of Philadelphia transferred all youth residents out of programs run by VisionQuest due to confirmed instances of child abuse.  HHS subsequently gave shelter grant awards to VisionQuest, including a grant to house UACs in one of the same facilities investigated by the City of Philadelphia.

(7)  HHS is attempting to recoup funds disbursed for facilities that failed to open.

(8)  During the course of the Subcommittee’s investigation, HHS began restricting disbursement of grant funds to grantees without an operating license. HHS previously disbursed grant funds before a facility obtained an operating license.  As a result, VisionQuest and New Horizon received over $32 million in funding from HHS even though the facilities never opened.

(9)  HHS has begun requiring disclosure of licensing issues and allegations of abuse.

As noted in the report, while HHS has started to require certain ORR grant applicants to report licensing issues and allegations of abuse, these changes may not be permanent. For example, HHS maintains full discretion to remove the licensing requirement in future announcements if it needs to expand its shelter capacity. The report includes the following key recommendations to ensure the safety of unaccompanied children and efficient use of taxpayer dollars:

(1)  HHS should permanently require ORR grant applicants to disclose any prior or current adverse governmental action taken against them regarding the care of children in their grant applications. 

(2)  HHS should permanently require ORR grant applicants to be licensed at the time of application. 

(3)  HHS reviewers should proactively check state databases for information on previous adverse governmental actions regarding the care of children taken against applicants for ORR funding.