Providence — Rhode Island will have to scrap how it currently provides children and family services, a chief strategist said Monday as work continues on a plan to overhaul the system, crippled by leadership and budget deficits.

Jamia McDonald, chief strategy officer of the Executive Office of Health and Human Services, told The Associated Press the Department of Children, Youth and Families will be completely restructured and the new arrangement may not include the two networks the state currently uses to provide services.

"I think there's been an acknowledgment about this model of implementation, that this system of care wasn't successful," McDonald said.

DCYF has had a deficit in five of the past six years and was about $16 million over budget when Gov. Gina Raimondo took office in January. Raimondo ordered an audit and tapped McDonald to lead improvements to the agency following the resignation of former director Janice DeFrances. The audit last month revealed lapses in management and financial controls, and Raimondo announced plans for an overhaul.

McDonald said there was so much "chaos" that her team wasn't able to determine exactly why the networks were overspending or whether the money was being spent wisely.

"We weren't able to get to that level of granularity," McDonald said. "We set a new bar and just operated against that."

McDonald and her team have been assessing the types of services needed by families and children and the most effective way to provide them. To begin with, she said, the agency wasn't doing a good job of tracking expenses, so it's hard to know what to buy.

She said the agency hopes to have a plan in the next couple of months and, at the least, will include changes in how the department works with its two lead networks: Ocean State Network for Children and Families and Rhode Island Care Management Network. The networks' contracts with DCYF were extended in July for six months.

DCYF contracted the two networks in 2012 to take over the procurement of services as a way to cut agency costs.

Within a matter of months, the networks got started while also working amid drastic budget cuts in the department in 2011 and 2012, said Ocean State Network's chief executive Margaret Holland McDuff. Each network was given an annual budget of about $36 million and each was responsible for any cost overruns.

"We were given a set amount of dollars and there was an estimate of the number of children we would have to serve, but the volume increased dramatically," Holland McDuff said.

As their caseloads increased, their budgets did not. The networks went to the legislature each year to procure more money, and the funding shortages created tension between the leaders of both networks, who were unsure how to proceed.