If DHS fails to improve enough over the next 18 months - failing four consecutive reviews - the state could withhold funding or take it over entirely.
At least twice since the mid-1980s, the department was given provisional licenses three times in a row but managed to improve enough on a fourth evaluation to avoid a takeover. Departments in three other counties - Wyoming, Mifflin and Jefferson - are currently operating under provisional licenses.
The findings in the 57-page report that accompanied yesterday's licensing decision echo weaknesses pointed out in several independent evaluations.
"This has to be seen as a black eye on the city," said Frank Cervone, a child advocate and a member of an expert panel whose findings were released in June. "It would be even more upsetting if, in six months, this happened again," said Cervone, who pointed out that the city has already started corrective action.
The report that explained why the state granted only a provisional license, technically known as a Certificate of Compliance, requires DHS - at a minimum - to adopt all recommendations of the blue-ribbon panel in order to gain a full license.
"DHS is making important and long lasting changes that are improving the safety and well being of children in its care," acting DHS commissioner Arthur C. Evans Jr. said yesterday in a statement in response to the licensing decision.
He did not indicate whether he intended to appeal the decision. But Evans, who was appointed in October to overhaul the agency, has already embraced, and in some cases enacted, many of the reforms.
In the review released yesterday, the state noted 629 violations in 495 randomly selected case files. The number and scope of the regulatory violations precluded granting DHS a full license, the report said.
In a letter officially relaying the decision to the city, state Public Welfare Secretary Estelle Richman wrote that the findings resulted from "long-standing systemic issues within DHS."
The agency, she added, must go beyond previous efforts and make deep and lasting changes to protect children from abuse and neglect.
Just last year, the state gave the city a passing grade despite what many acknowledge were long-standing deficiencies.
Richman, while conceding that her department bore some responsibility for weak oversight in the past, said the city had performed better in the 2006 review.
"It was not as devastating," she said in an interview yesterday.
An Inquirer investigation last fall detailed the deaths of children whose families were known to the agency. More than 50 have died since 2001, half of them from abuse or neglect.
Immediately following the articles, Richman said, officials from the regional office of the federal Administration for Children and Families expressed concern and began meeting weekly with the city and state to make sure that reforms were under way.
"They wanted to know what we were doing to fix the situation and what clout we needed to get Philadelphia to respond," she said.
Richman said she invoked the federal agency when she hit roadblocks in dealings with the city.
"I said, 'If you don't listen to me, the next voice you hear may be from the federal government,' " she said.
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Contact staff writer John Sullivan at 215-854-2473 or email@example.com.