— In early 2018, state regulators came calling at a nondescript group home in Lumber Bridge, situated just off the highway southwest of the Robeson County town’s solitary stop light.

The seven children housed there were all boys between the ages of 9 and 17 and suffered from a range of mental health issues like depression, schizophrenia and PTSD – all serious enough to keep them on the premises around the clock.

Inside the facility, state officials reported, the boys sat for most of the day watching Netflix and playing video games. There were allegations of abuse and of confinement in a “time-out room.”

There was supposed to be a teacher here. Activities. Individual treatment. Counseling.

The children got none of that, according to an audit the state conducted over multiple days in early April 2018.

Within 45 days of the facility opening its doors, state officials gave its operator, New Horizon Group Home LLC, hours to shut them again, saying conditions presented “an imminent danger to the health, safety and welfare” of the boys housed there.

Yet barely one year later, the federal government awarded New Horizon a $3.9 million grant to house up to 72 children – migrant kids navigating the Trump administration's border policy alone.

The federal Administration for Children and Families, which oversees the Office of Refugee Resettlement, awarded the grant to New Horizon despite the fact that the company has gone months without a required state license to house any children. And if the state’s prior action against the facility holds up to an ongoing legal challenge, the group home operator will have gotten at least some of that federal grant money despite being prevented from housing any children for the next four years.

How we reported this story Reporters from WRAL News first began asking questions July 3 about a solitary North Carolina grant award for services under the federal Unaccompanied Alien Children program after seeing the basic details in a database published by Sludge, a nonprofit investigative journalism site. After discovering the company receiving the grant - New Horizon - was unlicensed to house children, those questions intensified. WRAL partnered with Reveal from The Center for Investigative Reporting to provide a broader context of the grant program - and its impacts nationally - based on their extensive reporting on the ground along the U.S. border and inside the facilities that house migrant children. Six journalists from WRAL and Reveal reviewed hundreds of pages of public documents, contacted dozens of sources and traveled more than 500 miles of North Carolina highways to reveal more about New Horizon's past and exactly how it fits into the national picture of a rapidly expanding federal program to house the 10,000 unaccompanied children picked up at the border.

New Horizon is not currently housing any children through the federal program, according to the Administration for Children and Families. But the company received the grant in April through a cooperative agreement with the agency for three years of "residential childcare support services."

A spokesperson with the ACF declined to provide the full value of the grant award, and the agency has not answered repeated questions about exactly how much of the $3.9 million grant has been paid out.

New Horizon is currently challenging the state’s revocation of its license at the Lumber Bridge facility – and North Carolina regulators’ allegations against it – in state administrative court.

Knicole Emanuel, a lawyer representing New Horizon and its CEO, Barbara Brockington, said the state acted prematurely and incorrectly to close the Lumber Bridge facility and end the company’s license after 14 years of operation in other locations.

“[Brockington] has a very good company that does very good services for people who need it,” Emanuel said.

She casts the resulting Department of Health and Human Services report on problems in Lumber Bridge as largely false.

Issued in April 2018, days after the facility was shuttered, that report details more than 100 pages of issues at the Lumber Bridge home, including the failure to hire trained workers, keep the facility adequately staffed and investigate and report allegations of mistreatment. The 28 individual violations, the audit notes, amount to serious neglect, abuse and harm.

Child care advocates and former employees of New Horizon say the state’s findings raise serious concerns about the company’s ability to operate a shelter for migrant children – a type of facility it has never run before.

“If everything in this report is accurate then it does give, rightfully so, reason to pause and say this is something that needs to get looked at really carefully,” said Karen McLeod, president and CEO of Benchmarks, a Raleigh-based association that lobbies on behalf of group homes.

Immigrant children who arrive at the border without a parent are placed in the custody of the Office of Refugee Resettlement, which funds a network of 168 shelters and other programs across 23 states. Since 2008, ORR has awarded contracts totaling $6.3 billion under its Unaccompanied Alien Children Program.

The shelters are supposed to be a temporary placement for the children, and ORR is tasked with locating family members within the U.S. who can care for the children while they have a pending immigration case.

But the Trump administration has come under scrutiny for its treatment of immigrant children in ORR custody. Reveal from The Center for Investigative Reporting recently reported that children in a Texas temporary shelter were not getting access to legal services, as required under federal law. Last year, Reveal also broke the story about a residential treatment facility that medicated children with psychiatric drugs without parental consent.

WRAL News partnered with Reveal to report this story.

New Horizon’s grant is the only one received through the Unaccompanied Alien Children Program in North Carolina for the last 10 years.

To shelter refugee children, state Department of Health and Human Services spokesperson SarahLewis Peel told WRAL News the facility would have to be licensed by the agency as a residential child care facility – a separate certification from the one the company previously held to treat children with mental health issues.

But New Horizon doesn't currently hold a residential child care facility license. And Peel said the company never has, according to DHHS records.

On July 11, a spokesperson with the federal Administration for Children and Families said "the organization is undergoing this [licensing] process now." Nearly a week later, on July 17, an agency spokesperson said the company told them there is a "backlog" on the state level.

That same day – two weeks after WRAL News began asking questions about the company – state records show New Horizon submitted its application to the Division of Social Services for the first time. State officials say they do not have a backlog.

"NCDHHS will now process the application to determine whether New Horizon Group LLC meets the requirements to become licensed as a residential child care facility," Peel said in an email.

A spokesperson with the ACF said New Horizon expects to have its license – the result of a multi-step evaluation by state regulators – in early August.

Why the federal agency awarded the grant to the unlicensed North Carolina facility is hard to say. The Administration for Children and Families declined a request for an interview and would only provide limited answers to questions by email.

"ORR has specific requirements for the provision of services," a spokesperson with the agency, who did not provide their name, said in an email. "Award recipients must have the infrastructure, licensing, experience and appropriate level of trained staff to meet those requirements."

As of July 22, about 10,000 immigrant children were in ORR custody, according to the agency. The facilities are operated by a myriad of organizations ranging from local nonprofits to large private contractors. The shelters also range in size. Many house dozens of children while others have room for hundreds or even thousands, such as a South Florida shelter with a maximum capacity of 2,700.

Of the dozen organizations nationally that received grants from ORR to care for migrant children for the first time in 2019, New Horizon is one of two without residential child care licenses. The other is the Baptiste Group, a Georgia-based firm planning shelters in New Mexico and Tennessee.

The government requires care providers to be licensed within 75 days of an award. For both of the firms, that deadline has already passed.

Another company, Comprehensive Health Services, lacks licenses for at least two new shelters it’s planning in Texas, but does hold licenses for shelters it already runs for ORR in that state.

Multiple calls and emails to Barbara Brockington, New Horizon’s CEO, have gone unreturned, as have calls to other senior employees associated with the company in state records.

Within 20 minutes of WRAL News' first call to the North Carolina number listed in New Horizon's corporation filing with the state, reporters received a call from a Maryland number.

A man who would not give his name and refused to answer basic questions about the grant said not to call again and threatened to involve an attorney.

"We're not allowed to talk about our company or our constituents ... based on our confidentiality agreements we have in place," the man, who identified himself as the New Horizon’s operational manager, said.

The outgoing voicemail message for that number, as well as other public records, indicate it belongs to Lewis Smith, the head of Maryland-based Telesis Systems Inc. The company specializes in "emerging technologies and information technology support services," according to its website. The company earned about $6 million in federal contracts from the Department of Defense and the Department of Energy through 2015, according to U.S. government spending data.

Federal records list Smith as the New Horizon grant’s “principal investigator.”

Emanuel, Brockington’s attorney, said she didn’t have details on the federal grant to New Horizon and couldn’t comment further on the company’s plans at the new facility, which according to its application would house up to 72 boys ages 7 to 17 at a former assisted living facility in Laurinburg.

Thomas McMillian, listed as the proposed facility’s executive director in the state license application, did not return phone calls or emails seeking comment for this story.

His resume, attached to the license application submitted to the state, lists him as the recipient of a doctor of arts degree in “Education/Social Welfare” from Rochville University. That institution now appears to be shuttered.

But in 2009, a consumer watchdog group labeled it an online diploma mill after paying $499 to receive an MBA for the organization’s dog, Chester. Further reporting by The New York Times tied the university to a Karachi-based tech company called Axact, which operated several other unaccredited institutions.

Rochville isn’t listed in the U.S. Department of Education’s Database of Accredited Postsecondary Institutions and Programs.

A doctorate there, the defunct institution’s website says, cost students less than $15,000.

The Triangle is home to several organizations that work with migrants and refugees with federal funding through the Office of Refugee Resettlement’s various programs. Officials with those agencies said they were surprised to hear a shelter was even coming to North Carolina, let alone that an unlicensed company they’d never heard of was standing it up.

"I'm not going to go jaw dropping ... but it's definitely abnormal and definitely problematic," said Scott Phillips, the state field director for the U.S. Committee for Refugees and Immigrants in Raleigh. "It feeds into – there are really good shelters out there that do their utmost ... and then there's places that don't."

Phillips said the influx of migrants at the U.S.-Mexico border means there's "definitely a high need for shelters right now," but he hoped the federal government "wouldn't put that pressure ahead of quality of service."

"The license requirements are there for a reason," he said. "They're a hurdle – and sometimes they're a pain – but they're definitely there to help people provide the best, safest service available."

Ellen Andrews, the Durham director for Church World Service, said North Carolina has a strong network of groups that work with refugees, making it odd that an unlicensed group so many people hadn't heard of got such a large contract.

"It just seems like, if anywhere you had resources, it was here," she said.

It’s still unclear whether New Horizon will be eligible to house children at all, based on previous issues that shut down its residential mental health facility in 2018.

The company has challenged the revocation of its license in the state Office of Administrative Hearings, where a judge must rule whether the state made the right call.

“If the judge upholds the revocation of their license, New Horizon Group Home, LLC and its owner, principal or affiliate would not be issued a new license until 5 years after the date of revocation,” Peel, with state DHHS, said in an email.

That would mean that, by North Carolina law, New Horizon wouldn’t be eligible for a new license until 2023, more than a year after the company’s federal grant period for housing migrant children expires.

Emanuel disputes that interpretation.

She also maintains that DHHS regulators made significant errors when they used an emergency suspension to close the home based on inaccurate information gathered during an audit of the facility in April 2018. Before revoking the facility’s license altogether, state officials also fined the company $9,000 for three of the most serious allegations.

“Our stance is the state is incorrect,” Emanuel said. “We had a five- to six-day hearing showing our evidence and putting on witnesses to rebut those allegations, and it's our stance those allegations are incorrect."

But she said she can’t provide much more detail than that.

Hours after WRAL asked the Office of Administrative Hearings for the files in the company’s case this week, Administrative Law Judge Don Overby sealed them from public view. Emanuel said that order, which she called “really weird,” forbids her from discussing what went on during the hearing.

"It's unfortunate that we cannot defend against allegations because of the seal,” Emanuel said. “It puts us in a bad spot too."

She maintained that Brockington’s company provided quality care for the children housed at the Lumber Bridge facility and another located in Raeford, which housed children with less severe mental health issues.

The company’s four-bed Raeford facility, a so-called “level three,” was one of the best in the state, according to Shirley Liles, a consultant and trainer for mental health services who did periodic work for New Horizon over the last few years.

“She provided very good care for those level-three kids,” Liles said.

From 2013 through 2018, the Raeford facility was cited a dozen times for violating state laws and policies governing residential group homes. Those deficiencies included the lack of regular fire drills, failure to maintain minimum staffing to supervise the children and problems managing medication. In one of its most recent violations, New Horizon failed to implement strategies to keep one of the kids from running away.

Those violations – much less serious than those alleged at the Lumber Bridge facility – were resolved after Brockington submitted plans to fix the problems.

Other employees said they saw significant problems at New Horizon, particularly at the level-four facility in Lumber Bridge open for just over a month.

Love Hicks, a former New Horizon employee, filed an Industrial Commission case against the company over its lack of workers’ compensation insurance. Reached by phone, she said the details of her case showed Brockington “does have faulty business practices and a lot of her paperwork doesn't match up."

Hicks declined to comment further, citing pending litigation.

Another former employee, Melba Conley, worked for New Horizon for months, including a stint at the Lumber Bridge facility before it was shut down. She said the auditor from the state asked reasonable questions, and the health agency was right to shut the facility down.

“Barbara hadn't met those requirements – and she knew it,” Conley said.

Brockington, she said, hired unqualified workers who left the children inside all day and routinely failed to pay workers – including Conley.

Told about the federal grant to shelter so many more children than Brockington was housing before, Conley said she had concerns that some of the patterns from the Lumber Bridge facility would repeat themselves.

"She doesn't have the background to handle something like that,” Conley said. “I don't feel like she's going to do it justice."

McLeod, the head of the advocacy organization for group homes, shares those concerns.

After reviewing the DHHS report on New Horizon’s Lumber Bridge facility at the request of WRAL News, she said this case stands out.

“It's bad,” McLeod said. “It's really bad.”

Particularly problematic, she said, is the breadth of the issues in the report, which says staff weren’t qualified, cursed at the children and put them in “therapeutic holds” to control their behavior without the proper training. The audit showed a 9-year-old cut himself with a razor he found and was placed in an unapproved “timeout room” alone several times. Other children – in some cases corroborated by staff in the report – alleged abuse at the hands of staff.

“I absolutely understand why [DHHS] did what they did,” McLeod said.

She said she’s seen the state overreach in their actions against group homes in the past – and her organization has pushed back in those cases. But it was nothing like this, she said.

“The state doesn't have an incentive to just go in and put facilities out of business,” McLeod said.

A decision from the administrative law judge on the company’s revoked mental health treatment license is expected any day now.

If the ruling comes out in their favor, Emanuel said, Brockington will continue to operate her facilities as she did for 14 years. The Raleigh-area attorney said she’s confident she’ll win the case based on testimony that contradicted the DHHS report – although she added “you never know what the judge is going to say.”

"You can't always take things at face value. There's always another side to the story,” Emanuel said. “[Brockington] is, sadly, not able to tell her side because of the sealed order. But we told it to the judge."

In the meantime, the state’s DHHS says it’s reviewing New Horizon’s July 17 application to house migrant children, a decision that’s still pending.

All indications are that the company expects a finding in its favor.

On a recent afternoon at the Laurinburg facility, crews were at work cutting grass and washing the windows of the 37-bedroom building. An armed security guard met reporters at the border of the property before calling a company official via video chat.

The man on the phone declined to give his name and said the company would announce its future plans soon.

“The public will know as soon as it's released,” he said.

The award to New Horizon, an unnamed spokesperson from the federal ACF said by email, is part of an expansion to meet its responsibilities "so that the U.S. Border Patrol can continue its vital national security mission to prevent illegal migration, trafficking, and protect the borders of the United States."

But if the company can’t secure its licensing status, the agency said it’s likely it “would ask the grantee to relinquish the grant.”

“If a grantee does not do so willingly, ORR would move forward in terminating the grant award for failure to meet the terms of the award,” an ACF spokesperson said.

Conley, who has cut ties with New Horizon’s leadership since working there in 2018, wasn’t sure how Brockington secured that kind of money from the federal program in the first place. But if New Horizon does open a facility to house migrant children, Conley said she hopes the company and its owner “do the right thing” with the funding.

"Whoever gave Barbara this money," Conley said, “I hope they know what they're doing.”

Reveal’s Patrick Michels, Laura Morel and Aura Bogado contributed reporting.