Who guards the guardians? State auditor says agency fails to oversee firms

State Auditor Tim Keller’s office on Thursday issued an “emergency risk” advisory for the state Office of Guardianship based on an initial review that showed the agency has failed to properly oversee more than 20 private companies that are paid by the state to provide guardian services for vulnerable, indigent New Mexicans.

The Guardianship Office, which has about 900 clients, is responsible for monitoring and enforcing state contracts with private firms appointed by the courts to make the legal and other decisions for people deemed incapacitated through disability.

Keller’s office launched an audit of contract guardianship firms at the request of state District Judge Shannon Bacon of Albuquerque after one of the Office of Guardianship’s contractors, Ayudando Guardians, and two company executives were indicted in July on federal charges related to the alleged embezzlement of up to $4 million in client funds.

“The OSA’s (Office of State Auditor) initial fact-finding revealed a widespread failure of the Office of Guardianship to oversee contract guardians,” Keller said in a letter Thursday to officials with the state Developmental Disabilities Planning Council, which oversees the Guardianship Office.

“In short, although the courts and our citizens rely on the Office of Guardianship to protect against fraud and abuse by contract guardians, the Office has few systems in place or resources to discharge that duty,” the letter said.

For example, the office monitored only two of 21 guardianship contracts last fiscal year, the letter said. The office didn’t address complaints about contract guardians and didn’t have formal approved policies for contract guardians for the last fiscal year.

Required periodic reporting by contract guardians was irregular, and the office failed to follow up with those companies that hadn’t reported.

“Without these basic systems in place, the Office could not have been monitoring the accuracy of billing or identifying early signs of the types of fraud and abuse that led to the Ayudando indictments,” the letter said.

Since the indictment, the U.S. Marshals Service has closed the Albuquerque-based Ayudando Guardians. Ayudando was paid more than $650,000 a year under its state contract but also had private-pay clients and disbursed federal veterans’ and Social Security benefits to other clients.

The letter said that the Developmental Disabilities Planning Council “suggests that a severe lack of resources and capabilities are contributing to the problems at the Office of Guardianship. Monitoring efforts have been hampered by a lack of adequate staffing, expertise and travel budget.”

John Block III, executive director of the disabilities council, didn’t return a Journal request for an interview Thursday.

But in August, Block told the Journal the Office of Guardianship had two compliance officers to monitor the cases of about 900 clients. To be eligible, clients cannot earn more than 200 percent of the federal poverty level.

An estimated 100 people were on a waiting list for guardianship services, Block said.

With a $6.4 million annual budget, Block told the Journal, “We do the best we can to stretch the funding as much as we can.”

Aside from the Guardianship Office, the only other oversight of the 900 state guardianship clients is through the courts, which require a confidential annual report from each guardian.

The state’s guardian and conservator system has been under study by a state Supreme Court commission that is set to unveil its initial recommendations for reform at a meeting today.

During a May commission meeting, then-Ayudando Chief Financial Officer Sharon Moore testified that her agency is subject to regular audits by the Office of Guardianship.

But Block later told the Journal the audits aren’t financial, but are technical reviews to ensure proper documentation of client information.

Moore and Ayudando President Susan Harris are accused of siphoning client funds to finance a lavish lifestyle for themselves and their families. They have pleaded not guilty.

Keller’s letter to Block, which was forwarded to the state Attorney General, legislative leaders and the state Department of Finance and Administration, was obtained by the Journal.

The letter recommended that the Guardianship Office “immediately be subject to more thorough oversight and management. This may necessitate bringing in staff on loan from other agencies or a contracted firm to assist with the Office of Guardianship’s day-to-day work and to address the backlog of unresolved complaints and irregular reporting.”

It may also require additional funding on an emergency basis or through a budget transfer, Keller wrote.

He also recommended that, in advance of the legislative session that starts in January, the Legislature and Gov. Susana Martinez consider “possible enhancement, revision or restructuring” of the office and its responsibilities, including evaluating whether the planning council is the appropriate agency to oversee the Guardianship Office. Up until 2003, the Guardianship Office was overseen by the Attorney General’s Office.

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Who guards the guardians? State auditor says agency fails to oversee firms