By Annie Gowen
Washington Post Staff Writer
Monday, July 10, 2006; B01
Arlington and Fairfax counties could lose millions of federal dollars for human service programs after they and many other localities throughout the state misused foster care funds, triggering a federal investigation, officials said.
Arlington will be hit harder than Fairfax, officials said, losing as much as $15 million the county had hoped to spend on programs that provide supportive housing for the mentally disabled and on a new residential home for disabled seniors. About 30 county jobs are in jeopardy. Fairfax could lose about $2 million a year, officials said.
A federal audit showed that cities and counties throughout Virginia were improperly diverting federal funds intended for foster care to similar but broader programs such as counseling and parent education. State and federal officials dickered for months after the audit was released, and on May 31 the two sides reached a settlement under which Virginia will be docked $42 million in federal money.
The news of the funding cuts has spread quickly among advocates for the disabled in Northern Virginia, as Arlington prepares this month to trim $5.5 million out of its social services budget for the coming year to make up for the shortfall.
"It's going to get really gruesome really quickly. This is huge," said Nancy Mercer, the executive director of the Arc of Northern Virginia, an advocacy group for the disabled. "Families will suffer. People aren't getting the help they need now. . . . It's a nightmare. I can't believe it."
Arlington Deputy County Manager Marsha Allgeier said the probable loss of funds, about 5 percent of the county's $100 million social services budget, is serious but not dire.
"It's significant but not catastrophic," Allgeier said.
Unlike Arlington, Fairfax spent its money mostly on administrative costs instead of other aid programs, so officials said they will not have to cut jobs or services to make up their gap.
The Virginia localities' predicament dates to the late 1990s, when officials in the administration of then-Gov. James S. Gilmore III traveled the state encouraging jurisdictions to set up plans to push for more money from the federal government for social service programs in the form of reimbursements.
Arlington was by far the most aggressive county in pushing for reimbursements, officials said. Over the years, it billed or was slated to bill the federal government $38 million in administrative costs for food stamps and other programs. It then used the money it got back from the federal government on an array of services for needy residents.
Officials started a housing program that gave mentally disabled residents affordable apartments where they could live on their own with the help of counselor visits. The program, which has 29 residents and a lengthy waiting list, had hoped to add more than 400 spaces.
Officials also spent $2.5 million to buy a vacant senior home that they hoped to spruce up for the disabled elderly. And they unveiled -- with great fanfare -- an expanded day-care program for seniors this year.
All of those programs are in danger without the federal money, officials said.
Advocates for the disabled, who say they generally have to scrape and claw for money, felt as though they had received an unexpected gift when Arlington began tapping the new federal funding stream in 2002.
"This was like manna from heaven. It was a gimme," said Jo Anne McKey, a community activist whose 21-year-old son has cerebral palsy.
"It was a little like Christmas," said Patrick Hope, chairman of Arlington's Community Services Board, which oversees the county's human services programs. "We got to do things we ordinarily wouldn't have been able to do."
But that same year a social worker for Arlington schools contacted the federal Department of Health and Human Services, accusing the school system of improperly spending the foster care money, federal officials said.
Arlington was using money that was supposed to go strictly to children in foster care for such things as counseling, according to David Lett, regional administrator for HHS's Administration for Children and Families in Philadelphia, which overseas Virginia.
The federal investigation that ensued uncovered such misuse in localities across the state, officials said. As part of the May 31 agreement between state and federal officials, the Virginia Department of Social Services suspended reimbursement plans in Arlington and Fairfax. The inspector general's office of HHS is auditing the two counties, Lett said.
Allgeier said Arlington was simply the victim of a state and federal feud over foster care eligibility.
"From my point of view, we were doing everything the state told us to do," Allgeier said. "There was no malfeasance. We didn't do anything incompetent or wrong. It's the nature of reimbursements that there's going to be different interpretations."
Advocates are having trouble sorting out whom to blame but say one thing is clear: The diverted money was spent on worthy programs.
"When you look at the budget, you think, 'Why wasn't this funded in the first place?' " Hope said. "That's how vital they are."
Staff writers Lisa Rein and Michael D. Shear contributed to this report.
