LINCOLN – A former head of the Illinois child welfare agency — who resigned after an audit found his friend was awarded millions in taxpayer dollars with little to show for it — is now helping Nebraska negotiate how much it will pay a private company to provide child welfare services.

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Erwin McEwen left his job as director of the Illinois Department of Children and Family Services in September 2011 after that state’s executive inspector general found that a man McEwen described as his “personal friend and mentor” – Dr. George Smith — perpetrated a “large scale fraud” upon the state.

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Four years ago, Gov. Dave Heineman turned the state's child welfare system over to private companies who demanded more money, broke their contracts and eventually pulled out in all areas but Lincoln and Omaha, and still charged the state millions of dollars.

Costs soared, payments to foster families and subcontractors were delayed and record keeping was lax, but the program continued because of assurances of a key official, Todd Reckling, who resigned after state auditors uncovered the financial problems.

A year ago, the Legislature enacted reforms, appointing an inspector general to oversee the program.

Bulletin Editor George Lauby contributed to this report.