Maintenance Payments Retained by Child Placing Agencies in the Texas Foster Care Program

This report points out that over a 3-year period at least $2.7 million (Federal share $1.7 million) was improperly retained by 9 child placing agencies in Texas for unallowable services under the Title IV-E Foster Care program. The retained funds were used for such services as costs of operations, case management, therapy, counseling, respite care, psychiatrists, training, transportation, day care assistance, and administrative costs. These costs do not meet the definition of maintenance payments and therefore are not allowable charges to the Title IV-E Foster Care program. In addition to financial adjustments, we are recommending that the State agency institute controls to ensure that child placement agencies pay the full maintenance to the foster homes.