Audit of California Department of Social Services Rate-Setting Methodology for Foster Family Agencies

This final report identified a need for the California Department of Social Services to (1) make a current study of its rate-setting methodology used for compensating foster family agencies for services provided to foster children in California, and (2) make revisions as necessary to ensure that only necessary and proper costs are claimed for Federal financial participation in the future. These agencies provide foster care and related services for a significant number of children in California. The audit disclosed that amounts included in the payment rates for administrative activities were too high, and that amounts provided for social services were understated. Information obtained in the audit indicated that the Federal government was charged for payments in excess of those necessary for the proper and efficient administration of the Federal title IV-E foster care program; however, it was not practicable to determine the overall financial impact on claims for Federal reimbursement.