The Department of Health and Human Services announced more changes Friday for child welfare reform, which has struggled both financially and operationally.

The reform began in November 2009. On Friday, Chief Executive Officer Kerry Winterer said more money is being pumped into the effort both for the current year that ends June 30 and the next fiscal year.

KVC, one of two remaining lead contractors, will continue its contract with the state in the southeast and eastern service areas, but will get $5.5 million more in the current fiscal year, and $7 million will be added to its $44 million base contract next year. 

At the same time, KVC has laid off 75 workers in the two service areas in an effort to reduce costs, said spokeswoman Tami Soper.

Layoffs include directors, administrative assistants and direct service workers, including family permanency and program support workers. There also will be some consolidation of program managers.

Soper said KVC will maintain a 1-to-16 caseload ratio.

Before the staff reductions, KVC employed about 500 in both service areas. It serves nearly 4,500 children in the two areas, which is 46 percent of the total statewide.

Nebraska Families Collaborative, which serves about 1,230 children, or 13 percent in the system, will receive $14.2 million next fiscal year, up from $13.8 million.

The increases will come from within the budget, Winterer said.

HHS also has moved Vicki Maca from her interim job as southeast service area child welfare reform administrator to oversee reform in both the southeast and eastern service areas.

Maca, 48, will make $101,173 annually in her new position.

Her team will focus on service delivery, community partnerships, contract oversight and quality improvement.

Winterer said Friday HHS has had serious conversations with KVC recently about where to go from here and how the contractor could better reduce costs to operate with the money that is available.

Those conversations included whether KVC would continue to be a lead agency, although Winterer would not elaborate.

"Let's just put it this way, we looked at all the options that we could come up with in terms of continuing to do the reform in different ways, how we could utilize KVC in a different fashion ... we looked at different iterations of services they could provide to us," he said.

Winterer said the lead contractors are committed to seeing this through, and they bring a lot to the table in terms of experience and systems. The objective is to try to find the best ways to take advantage of that.

"For us to do (it alone), we'd have to reinvent the wheel to a large extent," he said.

Child welfare and foster care works in partnership with the courts, which have some influence over what services -- including more expensive services -- are given to children and families.

"We've got to lead this effort," Winterer said. "We can't control it all, but we can certainly lead it in a positive, good direction. That begins with recasting our relationship with these lead contractors."

HHS must manage the contracts in a way that makes KVC and Nebraska Families Collaborative accountable for delivering the services necessary for the children, he said.

That includes working with the contractors to lessen the number of kids coming into the system, he said.

KVC Nebraska President Sandra Gasca-Gonzalez said in an email the company is "fully vested and committed to the children and families we serve in Nebraska through the Families Matter initiative."

Maca and her team will oversee the reform in the Lincoln and southeast service area and Omaha's eastern area, including managing lead contractors.

The other three service areas will continue to be administered by area supervisors.

Maca said the three- to five-year process of reform is more than a financial proposition.

"At the end of the day, this is about what's best for kids, and what's best for families," she said. "We are going to organize and do everything we can to give this every opportunity to be successful."

Advocates for children and families in the foster care system continue to have concerns about the stability of reform.

Foster Care Review Board officials said they remain concerned about quality and timeliness of services.

In a February report to the Legislature's Appropriations Committee, officials said there has been a deterioration of infrastructure with loss of foster homes and other services statewide, along with many changes in direct service staff who work with families, loss of case information and documentation, and foster parent payment issues. 

Sarah Helvey with Nebraska Appleseed said that until pending fiscal and performance audits by the Legislature and state auditor's office are completed, there will continue to be questions about where the money to support private providers is coming from, whether reform is adequately funded and how the money is being spent.

Reform started out with five lead contractors. Cedars pulled out of its contract in April 2010, Visinet declared bankruptcy soon after, and Boys and Girls Home pulled out of its contract in October.

Each of the lead contractors has reported losses of millions of dollars.

Reach JoAnne Young at 402-473-7228 or jyoung@journalstar.com. You can follow JoAnne's tweets at twitter.com/ljslegislature.