Review of Title IV-E Foster Care Costs Claimed on Behalf of Delinquent Children in Los Angeles County, California

We estimated that for fiscal years 2005 and 2006, the California Department of Social Services (the State agency) claimed unallowable Title IV-E costs totaling $5.7 million (Federal share) on behalf of delinquent Los Angeles County children, consisting of $2.2 million in maintenance payments and $3.5 million in associated administrative costs. Title IV-E of the Social Security Act authorizes Federal funds for States to provide foster care for children under an approved State plan. For children who meet foster care eligibility requirements, Federal funds are available to States for maintenance payments, administrative costs, and training costs.

Of the 100 monthly maintenance payments in our sample, 80 payments were allowable, 18 payments were unallowable, and 2 payments could not be evaluated because the case files had been sealed under a court order. The 18 unallowable payments consisted of 13 payments and associated administrative costs for children who were not eligible for services and 5 payments for eligible children that included costs for unallowable services or for services that were not provided.

We recommended that the State agency (1) refund to the Federal Government $5.7 million for unallowable costs, consisting of $2.2 million in maintenance payments and $3.5 million in associated administrative costs, and (2) ensure compliance with Federal requirements by periodically selecting a sample of foster care case files for delinquent children to determine whether the Los Angeles County Department of Children and Family Services made correct eligibility determinations and maintained sufficient documentation to support eligibility determinations and claimed payments only for eligible children, allowable services, and services provided. The State agency did not concur with our first recommendation or the amount of the recommended refund. The State agency concurred with our second recommendation and provided information on actions that it had taken or planned to take to address the recommendation. After reviewing documentation that the State agency provided, we revised our first recommendation accordingly.