Focus 2000 still short of answers

There's a telling line of audit-speak in the latest Ministry of Health report on the financial affairs of disability service provider Focus 2000: "The money retained by Focus for administration costs appears to be more than adequate for the administration services provided." That could be roughly translated as: "Focus is creaming it."

Focus, with 900 staff providing care to more than 3500 people, is one of the largest providers of physical disability services - made up of residential facilities and home-based support - in the Auckland region.

The company has been at the centre of controversy about its charging practices and standard of care. In February, following widespread media reports, the Government ordered three types of audits of Focus. Two have been completed and they were obtained by the Weekend Herald under the Official Information Act.

The financial audit is talking about a particular type of ministry funding known as Hosted Individual Funding (HIF) or Direct Service - "an arrangement where Focus received funding for a number of hours of care and then paid funds into the client's bank account".

Clients then organised their own disabled support services and paid their caregivers directly.

In the 18 months to February, Focus received a staggering 290,389 HIF hours, equating to about $4.9 million. Of that, Focus keeps from $3 to $5 an hour for doing little more than transferring money into disabled people's bank accounts.

'Exceeds $1 million'

The ministry and Focus would not say how much that totalled, but our calculations indicate it exceeds $1 million.

Focus is supposed to supervise each direct service contract on a quarterly basis, but it appears to have no monitoring processes. In one instance it was found to still be paying money in February to a client who had died in 2002 - an overpayment of $267,265 that the ministry has yet to get back.

Focus is no stranger to over-claiming ministry funds. In 2004 it was forced to repay the ministry $2.5 million for 267,254 hours of care it didn't provide. That revelation, along with a leaked 2002 ministry memo indicating widespread concern about the poor standard of care provided by Focus, and that there might be "abnormal profit taking", prompted the present round of audits. A Weekend Herald investigation in March found much to support those claims. It also uncovered a $9 million cash pile that has since grown to $10 million.

That Focus - a non-profit company with tax-exempt status, owned by the Cerebral Palsy Society - could have made such profits from ministry funding meant for the care of disabled people raises questions.

First, how on earth did it do it? Second, with continuing criticism about the low standard of care provided, why isn't Focus spending its surplus on improving its services?

"It is obscene to think that you have a service provider who has in excess of $10 million in reserves when we know from listening to people who have used Focus services that they have complained about a lack of support to do some really basic things like have a day out to do some sport, or going out for some kind of recreational activity," says national president of the Disabled Persons Assembly, Mike Gourley.

Focus has been making significant profits almost every year since it was formed in 1996. In 1999 for example with ministry funding of $5 million it made $1.1 million. In 2004, with health funding of $15 million, profit was $2.8 million. By investing profits - sometimes in unsecured, high risk property development ventures - Focus has also developed a significant investment income stream which has accumulated, with profits, over 10 years to create the surplus.

High profits

The audit highlights the efficiency of the Focus administration system and the high number of HIF hours incurring "minimal direct costs against the retentions made" as other reasons for the high profits.

But whether or not the profit-taking is abnormal, the audit says Focus is doing nothing wrong and is able to distribute surpluses generated from ministry contracts to its shareholder - the Cerebral Palsy Society - in accordance with its constitution.

When in March we spoke to deputy director-general Geraldine Woods, of the ministry's Disability Services Directorate, about the size of the surplus, she said: "It's a very high buffer - I don't know if they've misused my funds or not, which is really the point that we're having looked at in the financial review. I'm not sure why they want such a buffer."

Today she says: "The amount of cash reserves that Focus 2000 holds looks high. Therefore the Ministry has asked Focus why they have been accruing this level of funding. The Ministry has asked Focus to provide a report about this matter in the next week."

In March, Woods gave a commitment to investigate concerns about several deaths in 2002 involving choking that occurred when people were transferred to hospital from Focus-run group houses.

She now says the ministry has discussed the processes that were followed at the time and notes that no coroner was approached over any of the deaths. Those who raised the concerns are still asking why a coroner was not called and whether a lack of care by Focus was a contributing factor.

But if Focus's financial management gets an auditor's tick, its organisational structure and procedures do not.

The second ministry audit says Focus has a poor complaints process and it doesn't let "service users" and their families participate in how the support and care should be delivered.

Both are recurring themes in 22 audits going back to 1997 that the Weekend Herald obtained under the Official Information Act. The outcome of each audit is for an action plan to be put in place to rectify the problems. But year after year the same issues resurface.

"The audit report points out really basic and key areas for improvement," says deputy health and disability commissioner Tania Thomas.

"I suppose if I had one wish, it would be that Focus 2000 took the recommendations seriously."

The audit describes the type of care Focus provides in its residential houses in Auckland and Hamilton as following a medical or business model rather than a "normalisation model" which promotes self advocacy, choice, and acknowledgment that those using the service are adults.

Examples of that not happening are seen in strict bedtime routines, little flexibility for evening outings, "an extraordinary amount of unoccupied time", and some incompatible client placements.

The report said that while there was no evidence of abuse, concerns were raised about "service users feeling intimidated by staff in relation to powerlessness in decision-making and choices or being heard".

A common refrain from Focus users interviewed was there was "no point in complaining as it doesn't change anything".

Thomas says a key concern is the poor procedure Focus has for reporting of abuse and neglect. "It's not good enough to have only partially attained that competence. It must be fully attained and it must be audited and monitored to check that it stays that way."

Complaints process

She says she is pleased Focus has invited the commission to help with improving the complaints process. "I hope it's going to be a bit more than tick the box."

Thomas says many disabled people - particularly those who are unable to speak - often need help in making complaints. "Staff are there and they have the ability to speak up - so we have to make it easy for them to speak up as well."

But that may be easier said than done. The Weekend Herald has heard from Focus caregivers who say if they complain about how users are being treated by other caregivers or about Focus processes, they are labelled troublemakers and have their working hours cut.

"Focus has got to be the worst company I have ever worked for," said a caregiver of 13 years experience. "I actually think I'm going to give up caregiving because I can't stand seeing what happens. They don't care."

We were also contacted by a medical professional who has dealings with disability providers.

He describes several instances of uncaring Focus caregivers. On one occasion, a client was left inadequately dressed and unable to move in a wheelchair, outside in winter conditions, while the caregiver had a cigarette.

On another occasion the disabled person's speaking device was taken away so he couldn't communicate. "I definitely have a picture of an organisation that doesn't train its caregivers to look after its clients particularly well," the medical professional said. "It is neglect and often it's studied, conscious cruel neglect."

Focus came into being through the process of de-institutionalisation, when government-run hospitals such as the Sutherland Unit were closed and residents were moved into community houses. Similar processes occurred in the mental health sector.

"Part of [the] problem is they have gone from big institution to mini institutions," says Gourley.

"What was happening in institutions was people were getting fed, drugged and they were sheltered. But, boy, the quality of life in those places was abysmal and abusive.

"I think things have improved, but we are in danger of replicating the very same things in an eight-person home."

The chief executive of Focus is Anne Murphy, who began her career as a nurse and joined the Cerebral Palsy Society in August 1989 after being made redundant as assistant general manager of the Auckland Hospital Board.

She is said to rule her multimillion-dollar empire with an iron fist.

Her response to questions about the audit began: "We find the continuing insinuations from the media sensationalistic, particularly when the audit pertains to somewhat tedious everyday matters and is largely to do with improvements to existing procedures."

Fascination

She said the media's "ongoing investigation and fascination with our service" was extremely stressful to staff and detrimental to Focus clients - "some of whom have expressed annoyance at the continuing visits to their homes by auditors".

Murphy acknowledges there is always room for improvement and, as a consequence of the audit, aspects of the company's quality management are being reviewed "to ensure that our processes are robust and will maintain our culture of continual improvement".

Continued Improvement (CI) is the highest rating given by an audit.

It means an organisation has fully attained the criteria and has a review process that leads to an improvement in services.

Focus did not attain any CIs in the audit and 44 of the 75 areas audited received either a "partially attained" or "unattained" rating.

National Party disability issues spokesman Paul Hutchison says the report card shows substantial failings: "The audit shows that Focus is not listening to the service users and it's not providing an optimal quality of life that is as ordinary as possible."

Hutchison was concerned the Government had let the situation at Focus evolve over a long period of time. "Clearly the accountability mechanisms have not been up to scratch. Even more concerning is that where there is obvious need in terms of quality of care, that such a surplus should have accumulated."

Murphy says some of the $10 million is earmarked to enlarge the Focus head office at Coyle St and to provide additional space for the parents and children attending its Conductive Education programme. She says the Focus board will decide what to do with the rest of the money.

When we ask the president of the Cerebral Palsy Society, Karl Sangster, about the audits and the surplus, his first response is: "I am not authorised to act as a spokesperson for Focus 2000."

We suggest that as owner of the company and beneficiary of the surplus, that surely the buck-passing stops with the society which appoints the Focus board. After checking with Anne Murphy, Sangster tells us the society is addressing good governance practices and has recently completed a constitution review which would soon go to members for ratification. He says a decision would be be made through consultation with membership on the best use of funds to benefit the society.

What is extraordinary about the responses of Murphy and Sangster is that they seem oblivious to the fact that Focus exists as a result of taxpayer's money - $77.5 million from ministry and district health board funding to date. And that there might need to be some accountability on how that money is used.

Of greater concern is that Focus appears to be locked into an institutionalised mentality that sees its clients as sick people who should be grateful for the care they get, rather than consumers who have needs that should be provided for efficiently and courteously.

And despite 10 years of audits and action plans, the ministry seems impotent to effect such a change in accordance with the Government's disability strategy.

"We believe this is symptomatic of a problem that goes beyond Focus," Gourley says.

"The real question is who benefits from the way service provision is organised at the moment? I think we have to say service providers tend to get the benefits actually."