Tennessee high court declares child-care company's records public

By The Associated Press

09.06.02

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MEMPHIS, Tenn. — A private company that was Tennessee's largest contractor for child-care services must open its records to the public, the state Supreme Court said yesterday.

Cherokee Children & Family Services Inc., which is under federal investigation for its handling of public money, must also let state auditors go over its books.

Public access to such records is particularly important when states are turning to private contractors to take over jobs traditionally handled by government, the court said in an unanimous ruling written by Justice Adolpho A. Birch Jr.

The opinion stems from lawsuits filed by The Commercial Appeal newspaper of Memphis and the state comptroller.

Cherokee drew millions of dollars from the state to oversee publicly subsidized child-care operations in Shelby County.

The state took over Cherokee's operations last year, and a federal grand jury has been looking into the company's business activities since 1999.

Cherokee opposed public scrutiny of its financial records, claiming it was a private contractor, not a state agency.

The high court said, however, that a private company which becomes, in effect, a "functional equivalent of a government agency" must abide by Tennessee's Public Records Act.

"The public's fundamental right to scrutinize the performance of public services and the expenditure of public funds should not be subverted by government or by private entity simply because public duties have been delegated to an independent contractor," Birch wrote.

The ruling overturned a decision by the state Court of Appeals that said Cherokee's records were private and not subject to state audit.