Inspector General Says California Should Pay Back $45 Million for Unqualified Foster Homes

Cheryl Clark, for HealthLeaders Media , October 19, 2009

A federal agency Friday said California should be made to pay back $45.5 million for foster care because children were living with their relatives in homes that didn't meet health and safety requirements.

The U.S. Health and Human Services Agency will make a final determination on whether California, which is trying to emerge from a $60 billion deficit over the last two years, will have to return the money, as the Office of Inspector General, Daniel R. Levinson, recommended.

"For the period October 1, 2000 through November 30, 2001, the State agency improperly claimed Federal reimbursement for county agency payments to relative homes that had not been approved based on State licensing standards," says the report.

Homes of caregivers who are relatives of the children must meet the same licensing requirements under a federal law established in January 2000, he wrote. Before that law was passed, standards for homes of relatives of foster child caregivers were not as strict.

The licensing standards include requirements for inspections, the physical environment of the homes, criminal background checks and clearances for all adults in the homes. They also include requirements for bedrooms and sleeping arrangements for children and adults, and safety standards for fixtures, furniture, equipment and supplies and safety release devices for security windows.

The agency's review was based just on a survey of homes in Los Angeles County during that period, because that county had the most relative home placements of any in California, and accounted for 40% of the statewide total.

State officials vehemently disagreed in written correspondence with Levinson's agency saying they did not believe the payments were in error and that any concerns about process had been corrected. However, Levinson indicated that the state had not provided information that would change the OIG's position.

"These deficiencies occurred because the State agency disagreed that the licensing standards used for nonrelative homes were required to be used for relative homes and had not instructed the county agency to discontinue claiming payments as of Sept. 28, 2000 for approved relative homes to which those standards had not been applied," the OIG stated.

"For the 100 sampled relative homes, the State agency improperly claimed $1.268 million ($650,324 Federal share) in Title IV-E foster care maintenance payments."

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