Audit of Allegheny County Title IV-E Foster Care Claims From October 1997 Through September 2002

Based on the results of our sample of 100 maintenance claims, we estimated that Pennsylvania improperly claimed $17.3 million for Title IV-E maintenance (room and board) costs on behalf of Allegheny County children from October 1997 through September 2002. Including associated administrative costs of $11 million, we estimated that the State improperly claimed at least $28.3 million of the total $146.1 million (Federal share) claimed for Title IV-E reimbursement on behalf of Allegheny County children. Title IV-E of the Social Security Act, as amended, authorizes Federal funds for State foster care programs. For children who meet Title IV-E requirements, ACF provides the Federal share of States' costs, including maintenance costs and administrative and training costs.

We were unable to determine the allowability of 15 sampled claims because the county contractors' per diem rates did not distinguish between services that were eligible or ineligible for Title IV-E reimbursement and because the State did not provide a description of the sundry costs claimed. However, court records, case workers' progress notes, and other documentation indicated that the facilities provided some services, such as medical, educational, and rehabilitative services, that were not eligible for Title IV-E foster care maintenance payments. Based on these sample results, we set aside $27.9 million for resolution by ACF.

We recommended that the State (1) refund to the Federal Government $28.3 million, including $17.3 million in unallowable maintenance costs and $11 million in unallowable administrative costs; (2) work with ACF to determine the allowability of $27.9 million related to claims that included both allowable and unallowable services; (3) work with ACF to identify and resolve any unallowable claims for maintenance payments made after September 2002 and refund the appropriate amount; (4) discontinue claiming Title IV-E reimbursement for ineligible children and ineligible services; (5) direct Allegheny County to develop rate-setting procedures that separately identify maintenance and other costs; and (6) direct Allegheny County to describe the services provided when claiming sundry costs. The State disagreed with our findings and recommendations.