Maitland, Florida — When Florida paid Embrace Families Community Based Care to oversee foster care in Central Florida, some of the money went to companies run by the same executives. Over two fiscal years, those related-party deals accounted for more than $13.4 million billed to the state contract. Forensic examiners found that Embrace had not competitively procured the deals, and Florida’s Department of Children and Families said it had granted no procurement waivers for them.
That finding left a basic question for the people who approved the invoices: what evidence did they have that Florida was getting a fair price? The forensic report and DCF’s August 22, 2023 notice document the procurement failure. They also identify a particular bill the state could challenge down to the dollar.
How payroll already covered by federal relief reached Florida’s bill
Embrace Families, Inc., the management affiliate, received a federal Paycheck Protection Program loan. The examiners found that payroll covered by the forgiven loan was also allocated to the lead agency’s DCF contract. Neither organization credited Florida for those payroll costs. The resulting overbilling was approximately $523,342, according to the examination by Carr, Riggs & Ingram.
DCF ordered repayment within 30 days. News coverage subsequently reported that Embrace leaders said they had paid the money back. FAN could verify the demand and the reported response. The materials reviewed for this story did not include the state’s receipt or ledger entry showing when and how much DCF credited. Publishing that entry would settle the repayment question on the state’s own books.
Who checked the price when both sides shared executives?
The examination covered July 2019 through June 2021. The lead agency bought services from affiliates that shared senior management and allocated expenses among themselves. The forensic team concluded that the arrangement made the underlying costs, including executive compensation, harder to trace. The five-year lead-agency contract had grown from $352.09 million to $423.30 million by April 2023.
Management had explained its thinking years earlier. In a 2016 response reproduced in the forensic report, management said it had shared its agreement with DCF, expected an outside arrangement to be less favorable, and intended the affiliated structure to reduce overhead. That explanation makes the state’s role more important: if DCF knew about the arrangement, who tested its price, and what did the department do when it discovered there were no waivers?
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The $13.4 million measures expenditures under deals that lacked required competition. The examiners said those costs could be disallowed. They did not conclude that every dollar was stolen, or that the services never reached families. What the missing competition deprived the public of was a contemporaneous comparison: another provider’s price for doing the same work.
A second question concerned who owned the financial upside
Examiners also questioned whether founder shares in Integrated Health, held by the management affiliate, arose from work performed under the publicly funded lead-agency contract. They recommended further investigation into ownership and distributions. They acknowledged that relevant agreements and events predated their review period. A final ownership determination would require those earlier contracts, board minutes and share records.
DCF told Embrace to document distributions received by the lead agency and include them in its annual spending plan. It also required the agency to solicit competing proposals within 60 days for related-party contracts that had bypassed competition. Those were checkable deadlines. A notice issued to a contractor is only the beginning of the paper trail.
What Florida should put on the public record
Embrace says its board decided in November 2023 against renewing the lead-agency contract for Orange, Osceola and Seminole counties. Ending a contract does not answer how prior charges were resolved. On its public contractor audit page, DCF lists dates when several other agencies remedied findings. The Embrace entry links to the audit without a comparable closure notice. That leaves the public unable to verify closure from that page alone.
DCF should publish the repayment reconciliation, the solicitations issued in response to its order, and its final determination of which related-party costs it allowed or disallowed. For the ownership issue, it should identify who reviewed the original records, what that review concluded, and how any distributions were treated. If the department accepted a contractor’s explanation, families deserve to see the evidence it relied on.
FAN’s report on six financial reviews Florida missed in FY 2024–25 concerns a separate audit and a later period. In the Embrace examination, Florida had already found the billing problem and set deadlines. The accountability question here is more exacting: can the department show what it recovered, what it allowed and who signed off?
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