Georgia officials decided last year that a rules violation by a private foster care agency was so egregious it warranted one of the toughest possible penalties.

The agency, state records show, had inappropriately placed two children in the same foster home. One was a 17-year-old who had engaged in incest and other sexual activity. The other was 8, autistic and mute, with a history of being abused and an IQ of 16. The boys at first shared a bedroom; ultimately, they shared a bed.

The foster agency’s punishment: a $300 fine.

What happened at the Trek Program, a foster agency based in Fort Oglethorpe, and how the state responded illustrate the scope of problems in Georgia’s growing system of publicly funded but privately operated foster care, according to an investigation by The Atlanta Journal-Constitution.

The newspaper reviewed more than 1,500 reports of state inspections and investigations, which provide an astonishing narrative of stark conditions and inadequate oversight in small foster homes and large group facilities alike.

Fights. Sexual assaults. Consensual sex between young teens. Abuse by foster parents and group home employees. Escapes. Suicide attempts. All occur with regularity at many of Georgia’s 336 private foster care agencies, the Journal-Constitution’s examination found.

One agency, for example, repeatedly used anti-psychotic drugs to subdue misbehaving children. Another tried to rid residents of “demons” through forced exorcism.

Yet the state office that oversees foster care consistently excuses serious, repeated rules violations that jeopardize children’s health and safety.

Since 2008, officials have issued 1,107 citations to 300 of the 336 private agencies. Most cases involved multiple violations of foster care rules. But the state imposed fines or other penalties — what it calls “adverse actions” — in just 83, or 7 percent, of those citations. The median fine: $500.

Of the 336 private foster care agencies, 100 receive direct state funding; last year’s total exceeded $55 million. Even among those agencies, violations are common. In the past two years, the state has cited 91 of the 100 agencies — while continuing to pay them for housing foster children.

Like many other states, Georgia increasingly relies on private agencies — not-for-profit organizations, for the most part — to place children in foster homes or group homes and to oversee much of their care. Many of the children have been diagnosed with mental illnesses, behavioral disorders, or both. Some enter foster care through the state’s social services system to protect them from abusive or neglectful parents. Others come through juvenile courts after getting in trouble with the law.

About 4,000 children, roughly half those in state care, reside in privately owned facilities. A decade ago, private agencies cared for no more than 10 percent of Georgia’s foster children.

State oversight, however, has not kept pace with the growth in private care.

In Fulton and DeKalb counties, Georgia’s most populous, half the children in foster care did not receive the required two visits a month from state workers in 2009, court-appointed monitors said in a recent report. In addition, the monitors said, state officials inspected the operations of one-third as many private foster agencies last year as in 2008.

And while half the foster children in the two counties live in private facilities, the monitors told a judge, they account for three-fourths of substantiated maltreatment cases in foster homes. (The state recently countered that 37 percent of the maltreatment occurred outside foster homes.)

“These are just the cases that actually get identified, investigated and substantiated as abuse,” said Ira Lustbader, associate director of Children’s Rights Inc., a New York-based advocacy group involved in the federal lawsuit that led to the monitors’ appointment.

“If the state is going to utilize the private sector, they have to have mechanisms in place” to ensure children’s safety, Lustbader said. “In the end, it’s all about the quality of the state’s oversight.”

State officials, however, say regulating foster care agencies is a complicated undertaking, one that involves using both persuasion and the specter of serious penalties to combat substandard treatment.

“It is not the goal to put people out of business,” said Keith Bostick, director of the state Office of Residential Child Care. “We want to do as much as we can to try to keep kids safe. But it is a balancing act.”

Dena Smith, spokeswoman for the Department of Human Services, which oversees the regulatory office, added: “Many times there are agencies or providers that, with a soft nudge, they can get back into compliance.”

But many foster care providers complain that enforcement is too aggressive, too focused on administrative requirements that don’t directly affect how children are treated.

“The regulations are good regulations,” said Normer Adams, executive director of the Georgia Association of Homes and Services for Children, an industry lobbying group. “But sometimes the citations are really tedious. Most of the violations don’t threaten the health or safety of a child.”

Regardless, in most instances, the state merely tells private agencies to correct deficiencies. Sometimes it also threatens an “adverse action.” But many agencies continue to violate the rules, with little or no consequence.

Drugs and demons

One day last April, an employee of the Mercy’s Door group home near Dalton approached a resident with a plan for his redemption: exorcism.

The employee took the boy to an office, where four other staff members were waiting, the boy later told a state inspector. They sat the boy in a chair and encircled him, hands joined, saying they would “exorcise the demons out” of him, he told the inspector.

“In Jesus’ name,” the boy quoted a staff member as saying, “remove the demons.”

Employees at Mercy’s Door required residents to attend daily “devotionals,” where they claimed to “rebuke demons of depression” and spoke in tongues, according to a second boy, who witnessed part of the exorcism rite. When another resident, an atheist, left his room, the boy said, staff members prayed over his bed. The staff, according to one resident, believed that “everyone has demons inside of them.”

The boy targeted by the exorcism said two staff members rubbed olive oil on his forehead and spoke about “four angels and rings of fire” — an apparent reference to Revelation’s prophesy that 144,000 people will be “sealed” and spared in Earth’s inevitable destruction. The boy said he was told he had been “bought for a price and adopted by Jesus.”

At one point, two of the facility’s employees later said, the boy became distraught. “Why,” he asked, jumping out of his chair, “can’t you be Baptist?”

In a brief telephone interview, the facility’s director, Veronica Alcerro, declined to comment.

A state investigation confirmed the boy’s story about the exorcism — and found that an employee of the group home, which received $62,416 in state money last year, had lied to an inspector.

But while the state cited Mercy’s Door for rules violations, it assessed no penalty.

In May 2008, the state cited Morningstar Treatment Services, which operates the Youth Estate group home outside Brunswick, for repeatedly using anti-psychotic drugs to control residents who would “act up.” A similar citation had been issued the previous October.

Regulators described the shots as an improper form of chemical restraint, used “as a means of convenience” for the facility’s staff.

One resident, for instance, was drugged for “non-compliance,” according to an incident report prepared by Morningstar. The resident had argued over serving an in-school suspension, so a nurse gave the child Ativan, an anti-psychotic, and Benadryl, an over-the-counter antihistamine also used as a sedative. After “lying on the bench for a little while,” the incident report said, the child completed the suspension “without fighting it.”

The state ordered Morningstar to revise its medication policy, and the agency said it would.

Ten months later, however, state inspectors learned that Morningstar was still using medication to discipline or control residents.

A nurse sedated one child for “being out of area.” Another resident was given a blend of Benadryl, Ativan and Haldol, another anti-psychotic, for “agitation, destruction and self-abuse.” Yet another received Valium for “agitation and aggression”; when the child still didn’t calm down, a nurse gave him the powerful anti-psychotic drug Thorazine.

In those instances, as in others, inspectors noted, “there was no valid prescription for the medications given.”

Staff members told inspectors that without the shots, “they would not be able to handle some of the residents,” according to a state report.

The four dozen or so residents at Morningstar typically have IQs between 40 and 70 and emotional and behavioral disorders, said Barry Kerr, the agency’s chief executive.

Morningstar has been “very aggressive” in reducing the use of drugs to manage residents’ behavior, Kerr said. The medicines, he said, have been used only “when we did not have another alternative.”

After Morningstar’s second citation, the state gave the agency a stern warning: “Based on repeat rule violations and failure to comply with an accepted plan of correction, adverse action may be initiated.”

About a week later, the state did act against Morningstar.

It imposed a $450 fine.

‘Eyes on the situation’

At least once a year, Rachel Neal shows up unannounced at each of the 80 or so foster care facilities that comprise her portfolio as a state inspector.

She carries a lengthy list of rules that each must follow: a minimum number of training hours for employees, up-to-date inspections for vehicles that transport foster children, and on and on.

Most violations get a written citation and are corrected within weeks. But when she discovers dangerous situations, such as toxic materials left within the reach of children, Neal expects instant remedies.

“Usually, they’ll be like, ‘OK, Ms. Neal, that will be dealt with immediately,’ ” she said during a tour of The Bridge, a group home in northwest Atlanta. “We make sure before I leave that that hazard will be fixed.”

Even during standard inspections, Neal said, “a lot of times you may come across something else” that endangers children or otherwise violates state rules. She said she may deviate from the routine “if I hear something, or see something, or read something in a file.”

But Neal and other inspectors spend relatively little time at each foster care facility. State case workers — assigned to a different division of the Department of Human Services — are supposed to visit each child they oversee twice a month. But they may not always look for problems affecting children supervised by other case workers, said Melissa Carter, the state’s child advocate.

“They are our eyes on the situation,” Carter said. “If I’m a case manager and I’m responsible for little Susie, I just go in and take a look at little Susie. It could be that other children were seen and other problems could have been detected.”

‘Minimal information’

In early 2007, the state took custody of an autistic child who had been neglected and abused in his home. The boy was “greatly at risk” of more maltreatment, case workers wrote, and would have to be “safeguarded from abuse.”

The state then delegated the boy’s protection to a private agency: Trek, a nonprofit program operated by the Lookout Mountain Community Services Board in North Georgia. Trek, in turn, placed the child in a foster home with which it contracted.

In March 2009, the state asked Trek to handle another child with profound troubles: a 17-year-old with a long, repulsive sexual history. The agency chose the same home where it had put the autistic child.

No one, however, told the foster parents about the 17-year-old’s experiences with incest and pornography. Or about his “sexual inappropriateness” with a stepparent. Or about what a therapist described as his “distorted sexual beliefs”: that children aren’t hurt if adults molest them, for example, and it’s OK for an older child to initiate sex with a younger one.

Trek provided “very minimal information,” the foster parents would later tell a state inspector. When they asked to see the 17-year-old’s psychological evaluations, the foster parents said, a Trek case worker demurred, saying only that the child had “never sexually acted out in previous placements.”

The foster parents moved the 17-year-old into a bedroom with the 8-year-old autistic boy. About a month later, the night of April 7, a cry transmitted by a baby monitor awoke one of the foster parents. He went to the boys’ bedroom, where he found the 17-year-old in bed with the younger child. The older boy was masturbating and had one hand in the 8-year-old’s pants.

The state cited Trek for failing to “prepare the foster family for the placement ... by anticipating adjustments and problems that may arise.” The previous month, the agency had received two similar citations. And a month later, the state assessed the $300 fine.

John Brewer, Trek’s program director, declined to comment on the case. But he said Trek tries to comply with state rules.

“They’ve always looked for specific things and make sure we follow through,” Brewer said. “We do get cited occasionally, and we try to correct those things.”

No one told

The state has cited numerous agencies that withheld critical information from foster parents.

For instance, state officials found that Benchmark Family Services of Jonesboro knew a child it placed in a foster home was supposed to receive therapy for sexual misbehavior. But no one, records show, told the foster family.

Soon, the child “inappropriately touched” another student at school, according to state reports. At the foster home, he groped another child.

The state cited the agency, but imposed no penalty.

A child placed in 2008 by another agency, Choices for Life of Georgia, based in Valdosta, had entered foster care after having sex with a cousin. He was not supposed to sleep, bathe, undress or be alone with younger children.

Again, no one told the foster family. Within weeks, the boy had molested at least one of the younger children in the home.

The state cited the agency, but imposed no penalty.

Foster parents need information about children in their care, said Beth Locker, policy director for Voices for Georgia’s Children, an Atlanta-based advocacy group.

“When that doesn’t happen,” Locker said, “it’s hard to know whether it’s a breakdown in communication, or a genuine concern about the privacy of a child’s family, or a concern about the cost of providing needed services.”

Sometimes, however, foster parents exacerbate harm already done to the children they supervise.

Choices for Life is one of several agencies cited for not preventing foster parents from using corporal punishment or other prohibited disciplinary methods. Last year, regulators said, the agency “failed to take appropriate corrective action” after learning a child had been spanked, and injured, by her foster parent. The child reported the spanking in December 2008, but Choices for Life left her in the foster home for 42 days.

The state imposed no penalty. It rarely does unless it finds a series of serious violations.

Inspectors documented numerous deficiencies in oversight by Bethany Christian Services of Atlanta, for instance. One of the agency’s foster parents left a child who uses a wheelchair home alone several times. Once, a social worker came by and found the wheelchair upstairs and the child on the basement floor, unable to get up and lying in his own waste.

Two other foster parents with Bethany forced a child to swallow a Benadryl tablet. The foster parents, the child said, called it a “sleep vitamin.”

From 20 investigations and four other inspections since May 2008, the state has cited Bethany Christian eight times for a total of 27 rules violations.

Just once, however, did the state impose a penalty: a $500 fine this January.

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Differing solutions 

More regulation or less? Experts and children’s advocates are divided in their suggestions for improving Georgia’s foster care system.

Those who support tougher enforcement of foster care rules suggest that:

● More state case workers are needed so each child in foster care can be visited at least twice each month, as required by a settlement agreement in a lawsuit over conditions in foster care.

● The state should be more diligent in searching for relatives to care for children taken into protective custody.

● State officials could more closely monitor private agencies that operate group homes or place children in foster homes; inspections of those agencies dropped dramatically in 2009.

● The state could increase funding to replace case workers and other regulators, whose numbers have declined through attrition, retirement and other factors.

Those who say less-stringent oversight would help privately operated foster care agencies propose that:

● The state could eliminate what one report called “disparities in degrees of regulation and disparate treatment” of state-supervised foster homes and those overseen by private agencies. Problems in state-operated homes, the report said, may be addressed by case workers “who personally know and have worked with the foster parents.”

● Privately operated foster homes could be regulated by social workers, rather than inspectors with more of an enforcement mentality.

● A single, independent body — not affiliated with the Department of Human Services, which funds foster care — could oversee all foster care providers.

Sources: Court-appointed monitors’ report to U.S. District Court, Georgia Office of the Child Advocate’s 2008 annual report, AJC research

How we got the story

For this series of articles exploring Georgia’s increasing reliance on private agencies to operate the state’s child welfare system, The Atlanta Journal-Constitution examined more than 1,500 state reports and other public documents and interviewed foster care providers, state officials and children’s advocates.

Today: Substandard conditions in privately operated foster care settings seldom incur penalties.

Monday: A riot at a North Georgia group home for foster children was the culmination of a long slide into chaos — and of the state's failure to intervene.

Next Sunday: Breakdowns in multistate adoptions arranged by a private agency from Georgia largely escape the attention of state regulators.

April 26: Private adoption and foster care agencies are supposed to be not-for-profit organizations. That doesn’t stop some agency officials from turning child welfare into a lucrative enterprise.

RELATED: Children in foster care suffer high rate of abuse and neglect