New Jersey's largest privately run residential treatment facility for troubled youths employed untrained temporary workers and kept children, sometimes for years, in treatment programs designed for much briefer periods, state officials said.

VisionQuest's Pathfinder program in Burlington County physically restrained some youths as many as eight times in a month and witnessed a "historic increase" in children walking away. During the first three months of this year, the program logged 187 "elopements" - up to 17 at one time.

The challenges at VisionQuest in New Lisbon "are so significant and persistent that the program must be planfully and significantly modified, or closed," wrote Kevin Ryan, commissioner of the state Department of Children and Families, in a June 29 letter obtained by The Inquirer.

VisionQuest president Pete Ranalli said the program is being revamped. This month, VisionQuest agreed with the state to have an on-site independent monitor oversee improvements.

It also has eliminated all part-time workers, reduced the number of children at the site to 60 - from a high of more than 90 - and has proposed a new treatment program to address state concerns.

What's more, Ranalli said he's seeking permits to build six new cottages to replace New Lisbon's residential buildings, called longhouses, which resemble barracks. Mold had been found in one of the houses a few months ago, according to the state, and has since been removed.

"The whole system needs to be revamped," said Ranalli from the VisionQuest corporate office in Downington, Chester County. "The kids were supposed to be in the program for a year - tops - and we're getting kids for two years, three years.

"We're under pressure to take kids and the state is under pressure to find places for kids."

VisionQuest is a national employee-owned youth-rehabilitation organization providing education, mental-health, child-welfare and juvenile-justice services. It operates 40 locations in seven states, including New Jersey, Pennsylvania and Delaware.

Programs for troubled children such as VisionQuest have come under increased scrutiny in recent years after reported cases of suffocation, sexual abuse and drowning.

In Philadelphia, a Family Court judge on Friday began pulling city youths out of a Tennessee facility after criticizing the staff there for being too aggressive with restraints. The move came a month after the death of Omega Leach, a 17-year-old Philadelphian who died after being restrained by a counselor.

It also came nearly two years after the city's Department of Human Services first received complaints that staff members at Chad were restraining children in a harsh and improper manner, The Inquirer reported on Sunday.

The allegations against VisionQuest surfaced after a former VisionQuest leader at the New Lisbon facility was charged in February with shipping millions of dollars of cocaine and methamphetamine to New Jersey. Anthony Zasa Jr. was working for VisionQuest in Tuscon, Ariz., at the same time he was working for a Mexican drug cartel, federal authorities said.

None of the drug allegations have been linked to VisionQuest. State officials said they were already examining the program before Zasa was arrested.

Ranalli acknowledged serious problems at VisionQuest in Burlington County. He said the program relied too heavily on part-time workers, kept youths for too long and lodged them in outdated housing.

"Do I agree we should not use temporary staff? Yes," he said. "Was I taken aback by the amount we were using? Absolutely. Should the state be concerned about that? Yes . . . I should have had more oversight. That got past me. "

Ranalli said the part-time workers were hired to avoid paying overtime. They never accounted for more than 8 to 10 percent of the staff, according to Mark Contento, executive vice president of VisionQuest at its Tuscon, Ariz. office.

The VisionQuest president said he is "not going to take another kid until everybody agrees with what the program looks like" and "unless the kids have a place to go once they leave the program. I want more family involvement."

Ryan's letter also questioned deep cuts in VisionQuest's payroll in 2005 and 2006, reflecting reduced staff and salary cuts.

"VisionQuest made the unfortunate decision in the months preceding a historic increase in AWOL behavior among children to decrease the salaries of staff across the board, which preciptated staff attrition," Ryan wrote.

At the same time, Ryan's letter said, VisionQuest's parent company collected what he called "a significant additional fee" of 28 percent of total revenue each month. That fee was $1.2 million in May, according to state officials.

Ranalli said salaries were cut 3 percent in January and some high-ranking members of the New Lisbon staff were transferred to other VisionQuest programs in Pennsylvania. He said the state's remaining financial concerns are "bogus."

The state halted new admissions in April after "elopements" soared. None have been reported in the last four months, officials said.

Ranalli said another allegation by the state - that medical, psychiatric and dental contracts have expired - is untrue. The facility has ongoing contracts for those services, he said.

Officials at the state Department of Children and Families, and at the Office of Child Advocate, said they will stand by the allegations in Ryan's letter unless they see evidence to the contrary.

"We'll let the letter stand for itself," said Kate Bernyk, a spokeswoman for the state Department of Children and Families.

E. Susan Hodgson, the Child Advocate, said in an interview that "this is an evaluative process still very much in the data-gathering stage.

"We need VisionQuest to rapidly come up with a detailed improvement plan on a lot of fronts, especially with respect to the treatment plan for children," she said.

Hodgson said the VisionQuest program was originally designed as temporary treatment for children with behavioral disorders - not as a solution for youths with major mental-health problems for an indefinite time.

"When a huge number of kids go AWOL, any VisionQuest staff would have to say to themselves, 'Some needs of those children are not being met,' " said Hodgson, adding that some children who were physically restrained had to receive hospital treatment.

"It was striking that they didn't have any therapist for substance abuse . . . I think there needs to be a significant culture change."

Ranalli said he will work to make that happen.

"This is an incredible opportunity to make the program right," he said.

From the archives: A VisionQuest employee was accused of also working for a Mexican drug cartel. http://go.philly.com/visionquest

Abuse at Tenn. center didn't deter Phila.'s DHS. http://go.philly.com/tennesseeEndText

Contact Staff Writer Edward Colimore at 856-779-3833 or ecolimore@phillynews.com. To comment, or to ask a question, go to http://go.philly.com/askcolimore.