A state audit, published Oct. 15, of California’s program to place sexually violent predators in homes after they are released from prison or state hospitals found the state lacked effective oversight of its contractor.
In general, State Auditor Grant Parks found that people who participated in the program—which places restrictions and conditions on released prisoners—were convicted of new offenses less often than those who didn’t.
The Department of State Hospitals (DSH) oversees the predator placement program and currently pays Liberty Healthcare around $9.4 million annually to run the program. The auditor found the contractor was able to operate effectively in many aspects, but the state department does not have an effective oversight process to track and monitor it.
“DSH has allowed several known deficiencies to persist since at least 2019 without holding Liberty Healthcare accountable for implementing timely resolutions,” Parks wrote in the report sent to the governor and other state leaders on Tuesday.
Liberty Healthcare has held an exclusive state contract to operate the program since it started in 2003.
The total cost to run the program has also grown significantly—from $6.6 million in 2018 to $11.5 million in 2022.
Sexually violent predators are people who have been convicted of a sexually violent offense against two or more victims and diagnosed with a mental disorder that causes them to be a danger to others and have a high likelihood to reoffend.
When sexually violent predators are released from prison, a superior court may commit them to a state hospital for mental health treatment under the care of DSH, which is responsible for coordinating where they will live once they qualify for outpatient treatment.
In response to the audit, the Department of State Hospitals said it maintains rigorous oversight of Liberty Healthcare and the program.
“The audit report, while mentioning DSH’s daily interactions and specifically noting the quarterly reviews and full program reviews that DSH conducts of the program, does not fully capture DSH’s diligent oversight through its daily interaction and weekly meetings that DSH has with Liberty regarding the administration of this program,” Director Stephanie Clendenin wrote Sept. 25.
“DSH is actively involved in proposed placements into the community, conducts three levels of review of all proposed housing placements, and regularly engages with Liberty on the treatment and monitoring of individuals who have been placed into the community.”
Audit Request
State Sen. Minority Leader Brian Jones (R-San Diego) called for an audit of Liberty Healthcare’s long-running contract last year, highlighting his concerns about “much-needed transparency” for the program.“The history of Liberty Healthcare’s attempted SVP placements has shown a severe lack of concern for public safety in our local communities,” Jones wrote in a letter to the California Joint Legislative Audit Committee in May 2023.
In the letter, Jones said he was familiar with the program’s attempts to place several sexually violent predators in San Diego County in the last few years.
As of 2024, the program placed five sexually violent predators in San Diego County, which was the highest number of placements in any county, according to the recent audit, which tabulated publicly reported placements only. Four more predators were also waiting to be placed in San Diego County, the audit found.
Liberty Healthcare placed well-known child sexual predator Douglas Badger, 82, in San Diego County after the San Diego Superior Court ordered Badger’s conditional release on July 5, 2022. (San Diego County Sheriff's Department)
Four predators were placed in Sacramento County, two in Los Angeles County, two in Tehama County, and one each in Monterey, San Mateo, Sonoma, and Yuba counties.
In the letter, Jones said the healthcare company’s practices were not in line with public oversight and failed to focus on safety.
The process makes it “almost impossible to stand up against inappropriate placements,” he added, by signing leases and paying for them using tax dollars, then slowly releasing details to the community.
Jones responded to the audit Tuesday, saying the long-term contract has allowed the program to slip.
“Over the last 20 years of a no-bid contract, DSH has paid Liberty Healthcare nearly $93 million to manage just 56 individuals—averaging $1.66 million per [sexually violent predator]. With this price tag, Californians deserve real safety assurances, but the audit reveals critical lapses in safety oversight and even reoffenses among released SVPs,” Jones said.
“SVPs should be housed on state property under constant supervision, as past governors have mandated. The auditor’s suggestion of transitional housing—even on state-monitored grounds—is a step DSH has stubbornly resisted but deserves serious consideration.”
Audit Details
According to the audit, the contract with Liberty Healthcare is not subject to the state’s standard contract oversight, but DSH is allowed to conduct quality assurance reviews to ensure that the company is meeting the department’s standards.
Kern Valley State Prison in Delano, Calif., in February 2021. A state program to place sexually violent predators in communities has found homes for 56 participants since it started in 2003.<br/>(Google Maps/Screenshot via California Insider)
“In general, we found that the terms of the contract are consistent with the legal requirements for placing, treating, and supervising program participants,” the audit found.
The audit reviewed 19 current program participants and found that Liberty Healthcare had up-to-date annual treatment plans for 17 of them. The other two participants signed treatment plans a day after the auditor asked for them.
However, the department does not have an effective oversight process to track and monitor the company’s implementation of recommendations that are made after the company is reviewed, the audit found.
For instance, the audit revealed some of the company’s policies and procedures were outdated and incomplete, and Liberty Healthcare did not establish policies and procedures for how to safely manage program participants during an emergency.
“Nearly half of the recommendations DSH made as a result of its May 2019 program review pertained to Liberty Healthcare’s policies and procedures, and the eight quarterly reviews we evaluated consistently repeated these concerns,” according to the audit.
The company is required to provide individual and group treatment—including various assessments—substance use screening, home visits, and GPS data review for each participant. When 10 out of 19 participants were reviewed by the auditor, Liberty Healthcare already performed the required quantity of services. Only one program participant did not complete required screening because the person was “very ill,” the auditor found.
The California State Auditor recommended making several changes to the program, such as reducing the time needed to place predators in housing and analyzing the benefits and feasibility of establishing transitional housing facilities for program participants.
Since the program started, it has placed 56 predators in California communities. Of those, two were convicted of more criminal acts after they were released. One was for possessing child pornography and the other was related to a reporting violation for sex offenders, the audit found.
Meanwhile, of the 125 sexually violent predators who did not participate in the program but were released into communities unconditionally since 2006, 24 were convicted of more criminal acts.
The new convictions included 42 felonies, including two for sexually violent offenses and five for other sexual offenses.
Six of the predators that weren’t in the program were convicted of multiple felonies.
State law requires DSH to place sexually violent predators into housing within 30 days after a court orders the convict to participate in the program.
However, the department faced numerous hurdles when they tried to find suitable housing, including complex program requirements intended for public safety, according to the audit. They also ran into few property owners who were willing to rent housing for the program, as well as public opposition to the placement of predators in local communities, the audit found.
“Consequently, placing program participants has typically taken the State an average of 17 months, significantly longer than state law generally allows,” the audit found.
DHS conducts limited reviews of Liberty Healthcare’s operations four times a year to evaluate its compliance with program requirements, but it has been more than five years since the 2019 program was given a comprehensive review by the department, which has not scheduled any future such reviews, according to the audit.
As for the rising costs, the auditor found rising housing and security costs, contractor rate increases from cost of living, and salary increases were affecting the cost of the contract with Liberty Healthcare.
Clendenin, director of the state hospitals department, also pushed back against the auditor about increased costs. While the audit mentioned some increased costs, Clendenin said it did not include increased costs due to DSH requesting its contractor to adjust staffing numbers or court-ordered security items such as fencing and cameras.
Liberty Healthcare did not immediately respond to a request for comment from The Epoch Times.
