Review of California's Title IV-E Claims for Payments Made by Los Angeles County to Foster Homes of Relative Caregivers

In this ACF-requested review, which covered the period October 1, 2000, through November 30, 2001, we found that California improperly claimed Federal Title IV-E reimbursement for Los Angeles County payments to foster homes of relative caregivers (relative homes). Contrary to ACF rules, 87 of the 100 relative homes in our sample had not been approved based on State foster family home licensing standards. There was no assurance that the 13 remaining homes had been approved based on State licensing standards because the case file documentation was either missing or substantially incomplete. Based on our sample results, we estimated that the State improperly claimed a total of $88.8 million ($45.5 million Federal share) for county payments to relative homes.

These deficiencies occurred because the State disagreed that the licensing standards used for nonrelative homes were required to be used for relative homes and had not instructed the county to discontinue claiming payments for approved relative homes to which those standards had not been applied. The standards applied to relative homes were less restrictive than those applied to nonrelative homes in such areas as criminal background checks of caregivers and sleeping arrangements for children and adults.

We recommended that the State refund to the Federal Government $45.5 million in unallowable foster care payments to relative homes. The State said that it did not believe that any payments were made in error and that any process concerns that resulted in a lack of documentation had been corrected. However, the State did not provide any information that would cause us to change our finding or recommendation.