Nearly $1 billion in funds left unspent by centers for disabled Californians

Nearly $1 billion allocated for regional agencies that purchase supportive services for Californians with developmental disabilities went unspent in a recent year and was ultimately returned to the state, even as some disabled people and their families said they needed more help.

California provides assistance to people with autism and other developmental disabilities through a system of nonprofits called regional centers, which are contracted with the California Department of Developmental Services. Twenty-one of them exist across the state, each serving a distinct area. More than 400,000 California children and adults are served through the regional centers annually.

The system has been criticized for persistent gaps in spending on services for Californians of different races and in different regions . Families have complained it can be difficult to navigate.

Even after Californians get the green light from regional centers for services, that assistance may not ultimately be provided if staffing agencies or other service providers cannot find workers to do the job. In recent years, regional centers have spent roughly two-thirds of the amount they have authorized for supportive services, according to an analysis of state data provided by the Assn. of Regional Center Agencies.

If the money meant for purchasing supportive services goes unspent at the regional centers, the funds that were allocated are eventually "reverted" to the state. That sum increased more than ninefold in three years, soaring to more than $978 million in the budget year that ended in summer 2022, from $108 million in 2018-19.

In total, nearly $8.9 billion was allocated to regional centers to purchase services in 2021-22. So for every $10 allocated to regional centers for services, more than $1 was ultimately reverted in 2021-22, according to a Times analysis of figures provided by the state. The 11% reversion rate was more than three times the percentage that had been reverted in the previous year.

That same year, 30% of families of children receiving regional center services who responded to a survey said they were only "sometimes" or "seldom" satisfied with the support and services they received.

"It’s astonishing to see how much money is being sent back to the state when there are so many people with developmental disabilities who are not getting services at all," said Judy Mark, president of the advocacy group Disability Voices United.

Regional center leaders pointed to several issues, including companies that provide needed services struggling to find and retain staff. Larry Landauer, executive director of the Regional Center of Orange County, said that as wages have risen elsewhere, state rates for workers who assist people with disabilities haven't kept up.

"It was not us holding back the money," Landauer said. "It was the agencies not being able to get the staff."

Amy Westling, executive director of the Assn. of Regional Center Agencies, said that California "had record low unemployment , which always makes competition for staff challenging."

In addition, she said that when the state budgeted for regional centers for 2021-22, it was anticipating the possible effects of a COVID surge that could necessitate more spending on one-on-one services. Earlier in the pandemic, when schools were providing virtual instruction and group services were suspended, Westling said "the regional centers were paying for a lot of personal assistants" and other daily care.

Money was included in the budget in case that was needed again in 2021-22, but "in hindsight that isn't what happened," she said. Spending on services did go up that year — to $7.9 billion, from roughly $7.6 billion, among all the regional centers — but did not increase as much as budgeted.

Such explanations failed to satisfy Fernando Gomez, co-founder of Integrated Community Collaborative, which helps families of people with developmental disabilities navigate the system. Gomez said even the lower amounts returned in earlier years were galling.

"Can you imagine what that money could do? The amount of individuals whose lives would change?" he asked.

Advocates said there is no shortage of unmet need. A report released two years ago by Public Counsel, a public interest law firm, found that at some regional centers, more than 40% of children and teens were not getting any services purchased through the agencies.

Last year, an independent state commission issued a report calling it a "system in distress." Among its findings: The vast differences in how different centers assess people for services and decide what is offered "means the level of care can vary significantly for different individuals — even if they have similar needs."

Mark of Disability Voices United said "the bottom line is that people with developmental disabilities aren’t getting the services they are entitled to. We are tired of excuses."

At the South Central Los Angeles Regional Center, which serves areas including South L.A and Compton, the unused money — $122 million — amounted to more than one-fifth of what the center had been allocated by the state for purchasing services in 2021-22. That was the highest percentage among regional centers statewide.

Leaders at the South Central Los Angeles Regional Center said they had ramped up spending earlier in the pandemic as families scrambled to handle remote learning. A Public Counsel report credited the South L.A. center with more than doubling its spending on services for children and teens in 2020-21 — an increase that accounted for most of the statewide narrowing that year of spending gaps for Latino children, it found.

When budget allocations were planned for 2021-22, "the state was prepping to expect the worst" again, projecting off previous spending, said Cherylle Mallinson, director of community services.

Instead, as schools reopened, families no longer needed the same kind of assistance, center officials said. Jesse Rocha, its director of adult services, also emphasized that an unusually high percentage of its clients — more than two-thirds — are school-age youth, compared with the population at other regional centers.

"The same needs were no longer there. ... It's all based on the unique, individual needs that every family or individual presents," said Cesar Garcia, its director of clinical services. For example, officials pointed out that SCLARC spending on one category of services, respite care, fell from $109 million to $52 million.

A widely used survey showed that same year, 33% of families of children with disabilities who were surveyed at the South L.A. center said they needed additional services.

South L.A. regional center officials disputed that those findings were an accurate reflection of its performance, saying only a fraction of its clients had responded to the survey and that as its population has rapidly grown, some clients might be so new that services had not yet been initiated.

At the regional center serving Orange County, the amount of unspent money ballooned in two years — to nearly $65 million, from $3 million. That was roughly 12% of what it was allocated in 2021-22, slightly higher than the average rate at which funds were left unspent by regional centers.

Landauer said that even now, "we're still struggling with our day programs to get enough people hired." Such programs provide adults with disabilities a range of daily activities for skill building and community integration.

Pay increases have been slowly phased in by the state over time, with another boost expected in January. Landauer said he hoped that "finally the field will be a little bit leveled" with competing employers.

California has ramped up funding for its regional centers over time, increasing their budget allocation for purchasing services from roughly $6 billion to over $11 billion from 2018 to 2024. Spending has been driven by a growing caseload and more use of supportive services, according to the Legislative Analyst's Office .

This summer, the agencies ended the budget year with more than $1.4 billion unspent. That number is not final: State officials said claims for supportive services provided during that year can still be submitted before unspent money is eventually reverted to state coffers, up to two years after the end of the budget year.

Carla Castañeda, chief deputy director of operations at the Department of Developmental Services, said the state tries to do "frequent monitoring" of spending, but there can be lags in getting that information, and "unfortunately during the pandemic there were even longer lags." In addition, Castañeda said there can be restrictions on their ability to reroute funds, especially for newer services.

With time, Castañeda said, "we do think it will trend back to a much smaller" share of unspent funds. For instance, she said, recent increases in service coordinators at regional centers could better connect people with needed supports, and California has also restored other services such as summer camp.

Westling said there is no incentive to leave money for supportive services unspent, since the regional centers cannot transfer the unused funds to their day-to-day operations. Nor would regional centers be penalized if they overspent their budgets, she said, as long as the spending was consistent with the rules.

Disabled people are legally entitled to such services in California, so "if the system is running short of resources, then the obligation shifts to the administration to seek additional resources from the legislature," Westling said. "It really is designed to ensure that we have the resources necessary to meet people's needs."

But to attorney Valerie Vanaman, who represents people with disabilities and their families, leaving hundreds of millions of dollars unspent is a symptom of a system "that is falling apart."

Vanaman said the pandemic led to regional centers losing experienced professionals and that working remotely had harmed the kind of collaboration needed to make sure people get the services they need.

"What you're seeing is that where services should have been put together, where the money would have been spent, there was no internal structure to make it happen," Vanaman said.

Areva Martin, chief executive of the nonprofit Special Needs Network Inc., said she understood the unusual circumstances facing regional centers amid COVID. "Even taking into account those things," she said, "I think it speaks to a level of bureaucracy that makes regional centers very difficult to navigate."

"It is disheartening to meet families who don't have adequate services, who don't have adequate resources, and then to hear about a billion dollars being returned," Martin said.

This story originally appeared in Los Angeles Times .